A is corrent because the accounting department serves a recording function and billing is an example of a recording function. Therefore, the accounting department’s performance of the billing function would allow effective internal control.
B is incorrect because shipping is primarily a custodial function. The custodial function should be segregated from the recording function of billing to enhance effective internal control.
C is incorrect because the sales department will often authorize sales. Thus, recording and authorization would not be segregated if billing were also performed, which would prohibit effective internal control.
D is incorrect because credit and collections authorize credit and make collections. The recording function of billing should be segregated from the credit and collection department for effective internal control.
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