UNIVERSITY OF THE EAST - CALOOCAN CAMPUS

College of Business Administration

SY 2021 - 2022
BSA 3103 - Accounting Information System

NAME Anne Liah D. Romero CLASS 20191158335

ID:

SECTION BSMA 1E DATE October 22, 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 following are the key decisions that management must make in order to achieve the
primary objective of the revenue cycle: Knowing how far the product can and must be
tailored to each customer's needs and desires, controlling a lot of inventory that must be
owned and the place for the inventory, using the right way to deliver merchandise to
customers, determining the amount of credit that should be given to each customer,
determining the credit terms that should be given to customers, and determining how
customers pay so that they can be processed to maximize cash flow.

2. How can the risk of the theft of cash and customer checks be stolen be minimized?

To reduce risk, businesses should develop and manage cash collecting procedures in the
same way that a lender would. This mentality minimizes the risk of theft by establishing
accountability and lessens the number of cash collection locations. Furthermore,
allocating a separate cash drawer to each employee who is in charge of collecting cash
makes it easier to track down a potential perpetrator.

The risks connected with theft and fraud includes not just financial risk, but also
reputational and operational risks that might be detrimental. Therefore, you must be
proactive and undertake a risk assessment to identify where your risks are, define them,
and ensure that controls meet the objectives of your company.

3. Identify the four basic activities in the revenue cycle and their sub processes.

The four basic activities in the revenue cycle, together with their sub-processes, are as
follows: First is, Sales Order, which consists of three steps: accepting the customer's
order, checking and authorizing the customer's credit, and confirming inventory
availability. The second basic activity is filling customer orders and shipping the desired
merchandise, which entails two steps: picking and packing the order, and shipping the
order. The third basic activity in the revenue cycle is billing and accounts receivable,
which involves: billing customers and updating accounts receivable. Lastly, cash
collections, which involves: handling customer remittances and depositing remittances in
the bank.