Question

1. Compare and contrast the following:

1A) employee internal controls: High Quality Employees, Separation of Duties, Required Absences and Bonded Employees.

1B)procedural internal controls: Authority and Responsibility, Procedures Manual and Performance Evaluations.

1C) tactical internal controls and limitations: Prenumbered Documents, Physical Control and Limitations.

1D) any two of the following terms: recover accounts receivable, percentage of sales estimate, aging of receivables estimate, sale on account, write-off accounts receivable and reinstate accounts receivable

1E) allowance method and the direct write-off method of accounting for uncollectible accounts.

1F) accounts receivable and notes receivable.

1G) accounts receivable turnover ratio with previous ratios (i.e., inventory turnover ratio, gross margin percent, return on sales, return on assets and return on equity).

I know it is a long question and thank you for answering! I will give a long review.

Answer 1

Answer to 1A:
Employee Internal Controls
Title	Description
High Quality Employees	This internal control suggests that employee should have a good quality of work while doing the work of the organization. The Organization should have highly qualified & knowledegable employees to work.
Seperation of Duties	There should be maker & checker concept in the organiztion like the employees who make the invoices should be checked by another employees, duties should be seperated so that work of one person can be reviewed bu another.
Required Absences & Bonded Employees	This internal control says that employees should be given leaves during the year so that we can check while his absentenism any fraud or error is conducted by employee in the organization. Also bonded employee is covered by fidelity bond, these bonds are made to protect against the risk that employee will intentionally steal from or damage the property of employer.
Answer to 1B:
Procedural Internal Controls
Title	Description
Authority & Responsibility	These internal controls suggests that the one who gives you the authority also be given the responsibility to complete the task or work in the organization.
Procedures Manual & Performance Evaluations	The Company should give procedures manuals to employees for doing the work systematically it will include how the work should started & end process . After doing the work, the employer should evaluate the work of all employees & best work should be rewarded this is type of Internal control through which employer had a watch on work.
Answer to 1C:
Tactical Internal Controls
Title	Description
Prenumbered Documents	Prenumbered documents will help that there should not any misplace of document or any false invoicing made by any person. This will avoid the fake sales made by the organization.
Physical Controls & Limitations	These type of controls are made to check physically the inventory, fixed assets & other items of the organization. Also some physical access controls are made that some persons are allowed to enter into passport protected IT systems or checking of some fixed assets.
Answer to 1D:
Aging of Receivable Estimate:
The aging of receivale estimate is the no of days from which the customer account is outstanding which is to be received it is prepared as a part of audit by the company to know each customer outsanding balance with number of days.
Sale on Account:
Sale on account means sales made on credit to the customers , the amount is payable by the customer after the specified period as fixed by the company to all the customers.