Chapter 4

Question 1

Steps in Revenue Cycle

Answer 1

1. Sales Order
2. Credit/Customer Service
3. Shipping
4. Billing/Accounts Receivable
5. Cash Receipts/Collections

Question 2

Sales Order Processing begins with

Answer 2

customer placing an order

Question 3

When a customer place an order the sales department does what

Answer 3

captures the essential details on a sales order form

Question 4

What does the credit dept. do on sales order processing

Answer 4

The transaction is authorized by obtaining credit approval by the credit department.

Question 5

Sales information is released to:

Answer 5

1. Billing
2. Warehouse
3. Shipping

Question 6

In a manual sales order processing, when merchandise picked up from warehouse and sent to shipping, what is done next

Answer 6

Stock records are adjusted

Question 7

The merchandise, packing slip, and bill of lading are
prepared by

Answer 7

Shipping and sent to the customer

Question 8

Shipping reconciles the merchandise received from the
Warehouse with the

Answer 8

sales information on the packing slip

Question 9

Shipping information is sent to

Answer 9

Billing

Question 10

Billing compiles and reconciles the relevant facts and issues an invoice to the customer and updates the sales journal. Information is transferred to

Answer 10

Accounts Receivable
Inventory Control

Question 11

A/R records the information in the customer’s account in
the

Answer 11

accounts receivable subsidiary ledger

Question 12

Inventory Control adjusts the

Answer 12

inventory subsidiary ledger

Question 13

Billing, A/R, and Inventory Control submits summary
information to the ______________ which then
reconciles this data and posts to the control accounts in
the G/L

Answer 13

General Ledger dept.,

Question 14

First step in Manual Cash Receipts Process

Answer 14

Customer checks and remittance advices are received in the
Mail Room

Question 15

A mail room clerk prepares a

Answer 15

cash prelist and sends the
prelist and the checks to Cash Receipts

Question 16

The cash prelist is also sent to

Answer 16

A/R and the Controller

Question 17

• verifies the accuracy and completeness of the checks
• updates the cash receipts journal
• prepares a deposit slip
• prepares a journal voucher to send to G/L

Answer 17

Cash Receipts

Question 18

What are the control activities?

Answer 18

• Transaction authorization
• Segregation of Duties
• Supervision
• Accounting Records
• Access
• Independent Verification

Question 19

should occur so that only valid transactions get processed.

Answer 19

Proper authorization of controls

Question 20

Often used when unable to enact appropriate segregation of duties

Answer 20

Supervision

Question 21

serves as a deterrent to dishonest acts and is
particularly important in the mailroom

Answer 21

Supervision of employees

Question 22

With a properly maintained _______, it is possible to track transactions through the systems and to find where and when errors were made

Answer 22

Audit Trail

Question 23

This control activity should be limited

Answer 23

Access to assets and information

Question 24

Physical procedures as well as record-keeping should be
______________ at various points in the system to check for accuracy and completeness

Answer 24

independently reviewed

Question 25

CBAS technology can be viewed as a ________ with two extremes

Answer 25

continuum

Question 26

use technology to improve efficiency and effectiveness

Answer 26

Automation

Question 27

use technology to restructure business processes and firm organization

Answer 27

Reengineering

Question 28

are used extensively in retail establishments

Answer 28

Point of Sale Systems

Question 29

EDI helps to

Answer 29

expedite transactions