Smith Manufacturing Company's Accounts Receivable Clerk Has a Friend Who

Multiple Choice

Smith Manufacturing Company's accounts receivable clerk has a friend who is also Smith's customer. The accounts receivable clerk, on occasion, has issued fictitious credit memorandums to his friend for goods supposedly returned (these returns did not exist) . The most effective control for preventing this activity is to:

A) prenumber and account for all credit memorandums.
B) require receiving reports to support all credit memorandums before they are approved.
C) have the sales department independent of the accounts-receivable department.
D) mail monthly statements to the customer.