Tag: Topic 18

The external auditor at Alex Ltd has identified the following deficiency within that organisation’s sales system.

For the deficiency, select the MOST likely consequence which might arise as a result of that deficiency.

• Invoices are not in numerical sequence.

Select ONE answer:

1. Debts might be included on the receivables ledger that are not collectable
2. Credit notes might not be properly recorded
3. Invoiced sales might not be properly recorded
4. Invoices may be raised in error

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct => Where invoices are not in numerical sequence, invoiced sales might not be properly recorded. Maintaining a numerical sequence for invoices helps ensure that all sales are accounted for and reduces the risk of missing or unrecorded transactions, which is essential for accurate financial records.
4. Not correct

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The external auditor at Alex Ltd has identified the following deficiency within that organisation’s sales system.

For the deficiency, select the MOST likely consequence which might arise as a result of that deficiency.

• Overdue accounts are not followed up.

Select ONE answer:

1. Invoiced sales might not be properly recorded
2. Debts might be included on the receivables ledger that are not collectable
3. Credit notes might not be properly recorded
4. Invoices may be raised in error

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. If overdue accounts are not followed up, debts might be included in the receivables ledger that are not collectable. This is because failing to follow up on overdue accounts increases the risk that uncollectible or bad debts remain on the books, which can lead to inaccurate financial reporting and potential losses for the business.
3. Not correct
4. Not correct

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The external auditor at Alex Ltd has identified the following deficiency within that organisation’s sales system.

For the deficiency, select the MOST likely consequence which might arise as a result of that deficiency.

• Receivables statements are not sent to customers.

Select ONE answer:

1. Customers may not pay promptly
2. Customers may be dissatisfied
3. Orders may be accepted from customers who are unable to pay
4. Invoices may be raised in error

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct => If receivables statements are not sent to customers, customers may not pay promptly.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The internal auditor at Alex Ltd has identified the following deficiencies within that organisation’s sales system.

For each deficiency, select the most likely consequence which might arise as a result of that deficiency:

Invoices are matched to orders but not to warehouse records.

Select ONE answer:

1. Customers may be dissatisfied
2. Customers may not pay promptly
3. Orders may be accepted from customers who are unable to pay
4. Invoices may be raised in error

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct => If invoices are matched to orders but not warehouse records, invoices may be raised in error.

This work is licensed under a Creative Commons Attribution 4.0 International License.

Select whether each of the following statements has no impact, is true, is unimportant or is false.

In the sales system, the following duties should be segregated:

• Credit control and invoicing

Select ONE answer:

1. No impact
2. Unimportant
3. True
4. False

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct => The duties of authorisation, recording and custody of assets should be segregated
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.