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Company M has lost 25% of its revenue in the last three months due to bad debts. One of thereceivables written offwasfroma long standing customer and the other three werefromnew customers. The management accountant has warned the sales team that the company cannot survive any more substantial bad debts.
Which of the following internal controls should be put in place to try and prevent further bad debts?
Suggested Answer: B, E, F
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28 comments · newest first
ME
Melodie
12 months ago
Not sure if stopping sales for overdue payments is fair.
JA
Jamal
12 months ago
Monthly reviews of aged balances seem like a good idea.
MA
Marg
1 year ago
Wow, 25% loss? That's huge!
LA
Launa
1 year ago
I disagree, sales should have some flexibility with limits.
SU
Sunny
1 year ago
A credit check on new customers is a must!
ST
Stefan
1 year ago
Reviewing aged analysis monthly, like in option D, seems crucial. I recall a practice question where this helped identify potential bad debts early.
MI
Michal
1 year ago
I think option C could help with accountability, but I wonder if two sales staff are really necessary for every new customer.
KA
Kate
1 year ago
I'm not sure about option B; allowing sales staff to override credit limits seems risky. It could lead to more bad debts, right?
TA
Tamera
1 year ago
I remember discussing the importance of credit checks in class, so I think option A makes a lot of sense to prevent bad debts.
AL
Alida
1 year ago
I think I know the answer to this one. Cookie persistence allows you to maintain a client's session even if they change IP addresses, right?
JO
Jody
1 year ago
Okay, I think I've got it. The class and method need to be `global` in order to be accessible from a Lightning Aura Component.
SO
Sophia
1 year ago
Cutting off customers who are late on payments? That's a bold strategy, Cotton, let's see if it pays off.
BE
Beatriz
1 year ago
Aged analysis of customer balances? Sounds like a job for a forensic accountant, not the sales team.
FA
Fausto
1 year ago
E) As soon as a customer payment is overdue they should not be allowed to purchase more until their balance has been reduced.
GI
Gianna
1 year ago
D) An aged analysis of customer balances must be reviewed every month.
MA
Malinda
1 year ago
A) A credit check should be carried out on each new customer.
MA
Martina
1 year ago
Two sales staff authorizing new customers? That's like having a bouncer and a doorman at a sandwich shop.
EL
Elenora
1 year ago
Overriding credit limits? That's like giving a toddler a credit card and saying 'have at it!'
CA
Caitlin
1 year ago
D) An aged analysis of customer balances must be reviewed every month.
WI
Willow
1 year ago
B) Credit limits should be set for all customers. However, if the credit limit will cost a sale then sales staff can override this limit.
VI
Vivienne
1 year ago
A) A credit check should be carried out on each new customer.
DE
Desiree
1 year ago
A credit check on new customers is a must. It's like wearing a seatbelt - better safe than sorry!
DE
Deangelo
1 year ago
Absolutely, we need to implement stricter controls to prevent this from happening again.
IN
Inocencia
1 year ago
I agree, it's better to be safe than sorry. We need to make sure we're protected.
AL
Albina
1 year ago
Yes, a credit check is definitely necessary. We can't afford any more bad debts.
DE
Devorah
2 years ago
I think option D is also important to review customer balances regularly.
LA
Lachelle
2 years ago
I agree with Sabra, a credit check on new customers is essential.
SA
Sabra
2 years ago
I think option A is a good idea to prevent bad debts.