Revenue and Receipts Cycle Flashcards
1
Q
What is the revenue cycle?
A
The exchange of goods or services for payment
2
Q
What are the 2 phases of the revenue cycle?
A
- Physical phase
- Financial phase
3
Q
How is the revenue process generated?
A
Either by selling a product or rendering a service.
4
Q
What is the most important inherent risk in revenue transactions?
A
The timing of revenue recognition
5
Q
What are the relevant assertions in the receipts cycle?
A
existence
completeness
accuracy
cut-off
presentation and disclosure
6
Q
What is kiting?
A
Transferring money from one account to another to cover up a shortage
7
Q
What is lapping?
A
concealing theft by stealing from somewhere else to make up the shortage
