[Anonymous]

Proper authorization procedures in the revenue cycle usually provide for the approval of bad debt write-offs by an employee in which of the following departments?

Treasurer.

Sales.

Billing.

Accounts receivable.

Answer: A, treasurer. This answer is correct because the department responsible for bad debt write-offs should be independent of the sales authorization and recordkeeping functions.

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Um, isn’t the treasurer in a custody role, and isn’t write-off an authorization role? So why is the treasurer the correct answer?

[Zuly]

@Determined…I had a similar question from the Wiley book and this is how it explained the answer. I hope this helps.

The department responsible for bad debt write-offs should be independent of the sales, credit, and the recordkeeping (accounts receivable/billing) for that function, and should have knowledge relating to the accounts. Treasurer is

is correct because, in addition to being independent of the various functions, the treasurer’s department is likely to have

knowledge to help make proper decisions of this nature. Accounts receivable/billing are incorrect because neither are independent of this function.

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[Anonymous]

Don't get too hung up on this question. I just passed AUD a month ago. This question is not good because it's too deep and makes you double question everything else you've learned.

[Author]

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