1) Which of the following would indicate poor internal control over accounts rec
ID: 2417259 • Letter: 1
Question
1) Which of the following would indicate poor internal control over accounts receivable?
2) Accumulated depletion is a(n)
3) Allied Industries reported net income of $52,000, depreciation expenses of $13,000, a gain on a land sale of $3,000, and a decrease in accounts receivable of $1,500. Under the indirect method, net cash flows from operations is
The same person handling cash receipts also records the accounts receivable transactions. The person handling cash receipts passes the receipts to someone who enters them into accounts receivable. The mailroom employees open the mail and give the cash receipts to another employee. The person who handles accounts receivable would not write off accounts as uncollectible.Explanation / Answer
1 The same person handling cash receipts also records the accounts receivable transactions. 2 Contra Asset Account 3 Net Income 52000 Add : Depreciation 13000 Less : Gain on sale of Land -3000 Add : Decrease in A/c receivable 1500 Net Cash Flow from Operation 63500
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