CIMAPRO19-P03-1 Exam - Topic 2 Question 45 Discussion

Actual exam question for CIMA's CIMAPRO19-P03-1 exam

Question #: 45
Topic #: 2

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?

AA credit check should be carried out on each new customer.

BCredit limits should be set for all customers. However, if the credit limit will cost a sale then sales staff can override this limit.

CTwo sales staff must authorise new customers and sign a form stating that they have done so.

DAn aged analysis of customer balances must be reviewed every month.

EAs soon as a customer payment is overdue they should not be allowed to purchase more until their balance has been reduced.

Show Suggested Answer

Suggested Answer: B, E, F

by Whitley at Feb 07, 2023, 10:54 AM

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Melodie

4 months ago

Not sure if stopping sales for overdue payments is fair.

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Jamal

4 months ago

Monthly reviews of aged balances seem like a good idea.

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Marg

4 months ago

Wow, 25% loss? That's huge!

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Launa

4 months ago

I disagree, sales should have some flexibility with limits.

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Sunny

4 months ago

A credit check on new customers is a must!

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Stefan

5 months ago

Reviewing aged analysis monthly, like in option D, seems crucial. I recall a practice question where this helped identify potential bad debts early.

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Michal

5 months ago

I think option C could help with accountability, but I wonder if two sales staff are really necessary for every new customer.

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Kate

5 months 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?

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Tamera

5 months 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.

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Alida

5 months 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?

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Jody

5 months 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.

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Sophia

9 months ago

Cutting off customers who are late on payments? That's a bold strategy, Cotton, let's see if it pays off.

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Beatriz

10 months ago

Aged analysis of customer balances? Sounds like a job for a forensic accountant, not the sales team.

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Fausto

8 months ago

E) As soon as a customer payment is overdue they should not be allowed to purchase more until their balance has been reduced.

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Gianna

8 months ago

D) An aged analysis of customer balances must be reviewed every month.

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Malinda

8 months ago

A) A credit check should be carried out on each new customer.

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Martina

10 months ago

Two sales staff authorizing new customers? That's like having a bouncer and a doorman at a sandwich shop.

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Elenora

10 months ago

Overriding credit limits? That's like giving a toddler a credit card and saying 'have at it!'

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Caitlin

8 months ago

D) An aged analysis of customer balances must be reviewed every month.

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Willow

9 months 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.

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Vivienne

9 months ago

A) A credit check should be carried out on each new customer.

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Desiree

10 months ago

A credit check on new customers is a must. It's like wearing a seatbelt - better safe than sorry!

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Deangelo

9 months ago

Absolutely, we need to implement stricter controls to prevent this from happening again.

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Inocencia

9 months ago

I agree, it's better to be safe than sorry. We need to make sure we're protected.

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Albina

10 months ago

Yes, a credit check is definitely necessary. We can't afford any more bad debts.

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Devorah

11 months ago

I think option D is also important to review customer balances regularly.

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Lachelle

11 months ago

I agree with Sabra, a credit check on new customers is essential.

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Sabra

11 months ago

I think option A is a good idea to prevent bad debts.

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