• Explanation

The billing process is an activity in the revenue cycle The process that starts with customer orders and ends with customer payments. It impacts accounts including sales revenue, accounts receivable, allowance for credit losses, and cash.. The billing department creates a customer bill when an approved sales order and shipping documentation are received. The bill is sent to the customer and the sale is recorded.

Internal control (I/C)Procedures put in place to ensure the integrity of financial information and to prevent or detect and correct fraud or errors. procedures are intended to prevent or detect and correct misstatements on a timely basis. Billing process I/C focuses on activities leading to or verifying amounts billed (eg, quantities, dollars) and eventually recorded as sales revenue and accounts receivable.

The following I/C procedures can reduce the risk of billing errors:

• Shipping document control totals (eg, quantities) compared to total sales invoice quantities verify that all items shipped were billed to customers (Choice A).
• Computerized controls verifying the pricing and mathematical accuracy of bills ensure correct pricing and prevent errors in billed totals (Choice B).
• Shipping documents matched to approved sales orders verify that sales were properly approved and items are shipped before the customer is billed (Choice C).

This question asks for the procedure that would most likely not reduce billing errors. Reconciling sales invoice (eg, billing) control totals to the accounts receivable subsidiary ledger focuses on I/C procedures occurring after the billing process. Sales invoices reflect the billed amounts and would support recorded accounts receivable transactions.

Things to remember:
Internal control (I/C) procedures are intended to prevent or detect and correct misstatements on a timely basis. Billing I/C focuses on procedures that lead to or verify amounts on invoices (eg, customer bills), resulting in recorded sales revenue and accounts receivable.