This action might not be possible to undo. Are you sure you want to continue?
manager reports to the ________ and the treasurer reports to the ________. D) treasurer; vice president of finance 2) In the revenue cycle, before a shipping notice is prepared, the shipping department personnel should match the inventory received from the warehouse to details from D) picking ticket and sales order. 3) Which is the best control to prevent invoicing customers for the quantity ordered, which was more than the quantity shipped due to items on backorder? A) Use the information from the packing slip to prepare the sales invoice. 4) The cashier deposits checks in the bank for Very Large Corporation (VLC) and also prepares payments to vendors. Of the following, who is best to reconcile the bank statement to VLC's records on a regular basis? A) Internal audit department 5) Which of the following documents normally triggers the billing process in the revenue cycle? A) Packing slip received from the shipping department 6) Which of the following documents would normally trigger the process to record a customer payment? A) Remittance advice 7) Which document should always be included with a merchandise shipment to a customer? A) Packing slip 8) A monthly statement sent to customers serves a control purpose by A) providing an opportunity for customers to verify the balance owed and activity on the account. 9) Accounting recognizes a sale when A) inventory becomes the legal property of the customer. 10) Which of the following is not one of the controls for the mail room where customer payments are commingled with other mail? A) Requiring the controller to be personally present when mail is received and opened 11) What is the primary objective of the revenue cycle? C) to provide the right product in the right place at the right time at the right price 12) Which of the decisions below is not ordinarily found as part of the revenue cycle? B) How often should accounts receivable be subjected to audit? 13) Which of the following is not a basic activity of the revenue cycle? C) receiving 14) Retail stores could send their orders directly to the manufacturer's sales order system in a format that would eliminate the need for data entry, using B) Electronic Data Interchange. 15) Matching customer account numbers and inventory item numbers to the numbers in the customer and inventory master files is an example of a D) validity check. 16) During the sales order entry process, a ________ is performed to compare the quantity ordered with the standard amounts normally ordered. D) reasonableness test 17) During the sales order entry process, a ________ is performed to verify that each transaction record contains all appropriate data items. A) completeness test 18) When a customer places an order (on account) for a certain product, what should be done before the order is checked for inventory availability? A) The customer's available credit should be checked. 19) How is credit approval generally handled for established customers with a documented payment history? B) General authorization by a sales clerk 20) What is a typical procedure for processing sales orders from new customers or customers making a purchase that causes their credit limit to be exceeded?
These special software packages are called D) CRM systems. 21) A company should check inventory quantities before accepting a sales order for all the following reasons except to A) verify the accuracy of the perpetual inventory records. scans the remittance advices. Since customer service is so important. This describes the ________ method. customers pay according to the amount showing on their monthly statement and payments are applied against the total account balance. D) turnaround 33) A document typically encountered in the revenue cycle that is both an output document and a source document is the A) sales invoice.B) Specific authorization must be granted by the credit manager. C) balance forward 31) When a customer pays off the balance on an invoice. D) all of the above 36) The benefits of a lockbox arrangement with a bank are maximized when B) several banks around the country are used. What is a solution to this potential internal control problem? A) Have customers send a remittance advice with their payment. software programs have been created to help manage this function. the payment is credited to the ________ file. 37) An arrangement where a bank receives customer payments through the postal system. 34) A ________ system prepares and mails monthly statements to customers throughout the entire month. B) bill of lading 25) Two documents usually accompany goods shipped to a customer. 22) Responding to customer inquiries and general customer service is an important aspect in the revenue cycle. C) cycle billing 35) The accounts receivable department must know when customers pay their invoices. instead of just at the end of the month. and transmits payment data to the business electronically is known as B) an electronic lockbox. 30) In the ________ method of tracking accounts receivable. B) Have mailroom personnel prepare a remittance list which can be forwarded to accounts receivable. D) open-invoice 29) The document a customer returns with their payment and that identifies the source and the amount of the payment is called a A) remittance advice. A) customer master 32) A type of business document in which part of the original document is returned to the source for further processing is called a ________ document. yet segregation of duties controls dictate that the collection and recording functions be kept separate from each other. 23) The best solution for maintaining accurate automated perpetual inventory system is to use D) RFID tags. . C) Establish a lockbox arrangement with a bank. 24) This document is a legal contract that defines responsibility for goods that are in transit. What are the two documents? B) a packing slip and a bill of lading 26) What is the basic document created in the billing process? D) sales invoice 27) A company uses the method for tracking accounts receivable where customers pay according to individual sales invoices. in order to minimize the time payments spend in the mail. B) open-invoice 28) A method for tracking accounts receivable that matches specific invoices and payments from the customer is called a(n) ________ method.
For example. treasurer 50) In a revenue cycle with proper controls. who reports to the ________. marketing 45) Consider the following revenue cycle scenario: The company has been exposed to customer dissatisfaction and the suggested control procedure to be implemented is to install and use bar-code scanners. the ________ who reports to the ________. 48) All of the following edit checks for online editing of accounts receivable transactions would probably be included except B) check digit verification on the amount of the sale. internal file labels can be used to D) reduce the possibility of erasing important files. the ________.38) Customers that send their payments electronically directly to the company's bank are using B) electronic funds transfer (EFT). A) inventory records 41) When an ERP is used. is not involved in any cash handling activities. enabling sales order entry staff to provide customers more accurate information about delivery dates. If this continues. A) cashier. but when he ordered 1000 one-size fits all pajama tops. He ordered 100 one-size fits all pajama bottoms. C) credit manager 44) It has been discovered that credit sales have been made to customers with a poor credit rating. 46) Which of the following would be the least effective control to minimize the loss of inventory? C) Periodically back up all perpetual inventory records. 47) Separating the shipping and billing functions is designed to reduce the threat of A) failure to bill customers. Separation of duties between ________ and ________ should help resolve the problem. B) accounts receivable clerk. it is assumed that there will be increases in efficiency and the effectiveness of the activities related to the revenue cycle. However. What is the threat? A) The company may be shipping the wrong merchandise. only the ________ has authority to issue credit memos. A) sales order entry process 43) To ensure proper segregation of duties. the following error message popped up: "Did you mean to enter a quantity of 1000 for your order?" This message is the result of a A) reasonableness test. 40) Key differences exist when an integrated Enterprise Resource Planning system (ERP) replaces an existing AIS or legacy system. 39) A way to incorporate the advantages of Electronic Data Interchange with the Electronic Funds Transfer is A) Financial Electronic Data Interchange. the company will face increasing uncollectible receivables and losses due to bad debts. ________ are more accurate and timely. . what must be in place and functioning well to fully realize these benefits? C) adequate controls 42) The activities involved in soliciting and processing customer orders within the revenue cycle are known as the ________. actually handles the cash and is not the same person who posts cash receipts to customer accounts. B) credit approval. 54) The manager of Callow Youth Clothing was entering an order online from Sad Clown Pajamas. controller 51) A serious exposure in the revenue cycle is loss of assets. What is the related threat and applicable control procedure that address this exposure? B) theft of cash. 49) When a proper segregation of duties exists in the area of handling cash receipts. segregation of duties and minimization of cash handling 52) Which of the following duties could be performed by the same individual and not violate segregation of duty controls? D) handling cash receipts and mailing vendor payments 53) To prevent the loss of valuable data in the revenue cycle.
59) The shipping department at Squishy Things Toy Company follows policies that determine which carrier will deliver orders according to the size. The family and friends usually give the clerk cash as a "thank you".000 households and then processes payments as they are received. . When Sad Clown Pajamas received the returned product. the least effective control to prevent fraudulent processing of a credit memo is to A) reconcile total of credit memos to total debits posted to customers' subsidiary ledgers. The most important of cash controls is C) segregation of duties. 62) Because it is the most fungible of all assets. Bob. Which of the following controls would best help to prevent this sort of fraud? A) Use of RFID tags 64) The accounts receivable management method typically used by credit card companies is A) balance forward. 63) A sales clerk at an electronics store scanned the bar code for a low cost set of headphones and then substituted a high cost set of headphones for his friend. a local co-op. The manager of Callow Youth Clothing received an order from Sad Clown and found that the wrong product had been shipped. The terms of the agreements are documented on B) bills of lading. He repackaged the order and sent it back for a refund. 67) For sales returns. 57) In Petaluma. Which procedure will not prevent or detect this fraud? A) Send monthly statements to all customers with balances owed.55) The manager of Callow Youth Clothing was entering an order online from Sad Clown Pajamas. The manager of Callow Youth Clothing was entering an order when the following error message popped up: "Your total order exceeds your available credit. D) credit memo 61) A customer service manager at Sad Clown Pajamas. which is a C) turnaround document. completed the checkout and payment process. 60) Sad Clown Pajamas is an Internet-based wholesaler. These instructions are the equivalent of a A) picking ticket." This message is likely the result of a C) completeness test. but the following error message popped up when he tried to exit the site: "Please enter your email address. Bob should D) document the phone conversation and forward it to the credit department manager. who informed Bob that Callow was entering bankruptcy liquidation and it was unlikely that they would be able to pay the outstanding balance on their account. they mailed a ______ to Callow Youth Clothing's manager. Each month PTTP mails bills to 70. The headphones give him computer-generated instructions so he knows the location of each item and quantity that should be included in the order. He is a product packer. and destination of the shipment. 58) Laz Chance wears roller blades and headphones when he is at work at the Squishy Things Toy Company. electric power is provided to consumers by the Power To The People Electrical Company. He entered all the items and quantities. 66) Which of the following poses an internal control problem? C) Sales representatives have authority to increase customers' credit limits in $1. who paid the lower price. Customers enter their orders online." This message is the result of a C) limit check. It maintains standing agreements with shippers that specify legal responsibility for the shipment while it is in transit. weight. A Credit Department representative will contact you within 24 hours. the management of cash has always been the most difficult of all control issues. The customers are provided with a remittance advice.000 increments. California. 65) The accounts receivable clerk destroys all invoices for sales made to family and friends and does not record the sales in the accounts receivable subsidiary ledgers. received a call from the manager at Callow Youth Clothing. 56) Sad Clown Pajamas is an Internet-based wholesaler.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.