UNIVERSITY OF THE EAST - CALOOCAN CAMPUS

College of Business Administration

SY 2021 - 2022
BSA 3103 - Accounting Information System

NAME MARIANO, MIKHAELA LOUISSE B. CLASS ID: 20191178822

SECTION BSMA2E DATE October 19, 2021

Module No. : 4 Activity No.: 1

Topic : The Revenue Cycle: Sales to Cash Collections

Short Answer
Answer each question in a clear and organized paragraph. Each paragraph should include a
clear and precise thought that directly addresses the questions. This activity is worth 30 points
in total, based on the rubric for this assessment to score your response found at the bottom of
the assignment.

1 The revenue cycle's primary objective is to provide the right product in the right
. place at the right time for the right price. To accomplish that objective,
management must make what key decisions?
The management should know how the payment of customers can be processed to
utilize cash flow. They need to know also what and how much credit should be offered to
their customers. The optimal prices for each product and service must be considered as
well. The management of inventory must be put into mind such as the amount of
inventory should be carried, where should it be located, and how the merchandise should
be delivered to customers. Also, should the company do the shipping function itself or
outsource it to a third party that specializes logistics? Another key decision that the
management must make is to what extent should products be customized to meet the
needs of the customers.

2 How can the risk of the theft of cash and customer checks be stolen be minimized?
.
The management must set strong internal controls for oversight and protection of
assets. Some of the common practices implemented by state and local government
organizations include cash control, training, physical security, risk assessment and
governance, policies and procedures, and segregation of duties. With regards to cash
control, procedures on handling cash should be routinely audited to ensure they are being
followed consistently. When it comes to training, they must provide staff training for cash
handling. For physical security, any staff should be seen in an area with camera
coverage. They should be monitored by CCTVs. Implementing a whistle-blower policy is
one of the best practices for risk and assessment governance. Policies and procedures
should be strict to make sure cash items are received and deposited in a secure, timely
and effective manner. In segregation of duties, cash should be handled in a dual-
controlled facility that restricts individual access, and no one person should have control
over two or more steps in the process.
3 Identify the four basic activities in the revenue cycle and their sub processes.
.
1. Sales Order Entry
 Taking the customer’s order
 Checking and approving customer’s credit
 Checking inventory availability
2. Filling Customer Orders and Shipping
 Picking and packing the order
 Shipping the order
3. Billing and accounts receivable
 Billing customers
 Updating accounts receivable
4. Cash collections
 Handling customer remittances
 Depositing remittances in the bank