ACC200 Ch3 Set 1

Question 1

Revenue cycle

Answer 1

a recurring set of business activities & related information processing operations associated with providing goods & services to customers & collecting cash in payment for those sales

Question 2

Revenue cycle - primary external exchange of data is with?

Question 3

The context diagram of the revenue cycle

Answer 3

Fig7.2 pg107

Question 4

Revenue cycles primary objective

Answer 4

is to provide the right product in the right place at the right time for the right price

Question 5

To accomplish the revenue cycle’s primary objective, management must make the following key decisions

Answer 5

pg108

Question 6

Four basic revenue cycle activities

Answer 6

1) sales order entry
2) shipping
3) billing
4) cash collection or receipts

Question 7

Level 0 data flow diagram: revenue cycle

Answer 7

Fig7.3 pg108

Question 8

Overview of enterprise resource planning system design to support the revenue cycle

Answer 8

Fig 7.4 pg109

Question 9

Level 1 data flow diagram: sales order entry

Answer 9

Fig7.5 pg110

Question 10

Sales order entry

Answer 10

1. Taking customers orders
2. Credit approval
3. Checking inventory avaliability
4. Responding to customer enquiries

Question 11

Taking customer orders

Answer 11

customer order data are recorded on a sales order document

Question 12

Sales order document

Answer 12

usually an electronic form displayed on a computer monitor or screen (many ERP systems continue to refer to these data entry screens as documents)

Question 13

Electronic data interchange (EDI)

Answer 13

customers use this to submit an order electronically in a format compatible with a company’s sales order processing system

Question 14

Example of a sales order document (order entry screen)

Answer 14

Fig7.6 pg111

Question 15

Credit approval

Answer 15

most business-tobusiness sales are made on credit. Therefore, there is the possibility of making sales that later turn out to be uncollectible (customer does not pay but has possession of the goods). Reguiring proper authorisation for each credit sale diminishes this possibility or threat

Question 16

Credit limit

Answer 16

the maximum allowable balance that management wishes to allow for a customer based on that customer’s past, credit history & ability to pay

Question 17

Sample enquiry screen for checking customer credit

Answer 17

Fig7.7 pg113

Question 18

Checking inventory avaliability

Answer 18

salespeople eed to determine whether sufficient inventory is avaliable to fill an order, so that a customer can be informed of an expected delivery date

Question 19

Sample enquiry screen for checking inventory avaliability

Answer 19

Fig7.8 pg114

Question 20

Responding to customer enquiries

Answer 20

someties these enquiries precede an order, & often they occur after orders have been placed