ACC 700 help A Guide to career/uophelp.com ACC 700 help A Guide to career/uophelp.com | Page 6

Newham Company is a publicly traded company operating in the
“personal product” industry. Newham manufactures cosmetic and body-
care products. These
products are sold to large department chain stores, such as Target and
Walmart, to be sold and distributed to the final consumer. Competitors
include Revlon,
Inc. (REV – NYSE) and Avon Products, Inc. (AVP - NYSE).
Newham Company has experienced steady growth over the past several
years. Recently, there has been a change in executive management,
including the CEO
and CFO. The change was sparked by questionable bonus payments that
were paid to the executive management team based on the company’s
performance. In
addition, a recent lawsuit has been filed based on claims that a new
product was not properly advertised, leading many customers to
experience allergic
reactions.
Sales and Accounts Receivable
A sample of weekly sales invoices shall be analyzed from the sales
report by product category. All sales are on account. Sales are classified
into four product
categories: cosmetics, skin care, fragrance, and personal care. Charges to
customer accounts should be dated with the date of shipment.
Sales invoices are prepared in batches on a daily basis using numbered
sales invoices. Sales invoice numbers are automatically generated by the
company’s
computer system. The accounts receivable clerk does not have
appropriate computer rights to override the computer-generated invoice
number. Upon
preparing sales invoices, the accounts receivable clerk verifies that the
first invoice number of the batch is consistent with the last invoice
number of the