Answer (B) is correct . Internal control over accounts receivable begins with a proper separation of duties. Hence, the cashier, who performs an asset custody function, should not be involved in recordkeeping. Accounts should be periodically confirmed by an auditor, and delinquent accounts should be reviewed by the head of accounts receivable and the credit manager. Customer statements should be mailed monthly by the accounts receivable department without allowing access to the statements by employees of the cashier’s department. The sales manager should not be the only person to review delinquent accounts because (s)he may have an interest in not declaring an account uncollectible.
Answer (A) is incorrect because It states an important internal control procedure in the area of accounts receivable.
Answer (C) is incorrect because It states an important internal control procedure in the area of accounts receivable.
Answer (D) is incorrect because It states an important internal control procedure in the area of accounts receivable.
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