Question

9.

If you place a control that the computer checks run-to-run total of beginning receivables, plus sales transactions with the sum of ending receivables, which of the following risks will you be addressing?

		A. Invoices not journalized or posted to customer accounts
		B. Sales invoices recorded in the incorrect accounting period
		C. Products shipped without shipping documents being generated
		D. Sale made without credit approval

Answer 1

ANSWER:

OPTION A: Invoice is not journalized or posted to customer accounts

EXPLANATION:

The sum of beginning receivables and sales transactions should always be equal to ending receivables. If they aren’t equal, there is risk of possibility of invoices not been journalized or posted to customer accounts. This risk is addressed by computer by making it reveal by checking run to run total.

Answer 2

Answer:

B. Sales invoices recorded in the incorrect accounting period

Explanation:

The described control verifies the run-to-run total of:

$$\text{Beginning Receivables}+\text{Sales Transactions}=\text{Ending Receivables}$$

This ensures temporal accuracy by detecting:

1. Cut-off Errors: Sales recorded in the wrong period (e.g., December sales posted to January).

2. Data Integrity: Mismatches reveal timing discrepancies in invoice postings.

3. 
   

Why Not Other Options?

• A: Requires checks at the transactional level (e.g., individual account postings).

• C/D: Relate to operational/credit controls, not arithmetic reconciliation.

Key Takeaway: This control targets period-end accuracy, making B the correct choice