Unit 3 - Module 3

Question 1

Customer Order

Answer 1

Document indicating the type and quantity of merchandise being requested.

Question 2

Sales Order

Answer 2

Source document that captures such vital information as the name and address of the customer making the purchase; the customer’s account number; the name, number, and description of the product; the quantities and unit price of the items sold; and other financial information.

Question 3

Sales Order (Credit Copy)

Answer 3

Copy of sales order sent by the receive-order task to the check-credit task. It is used to check the credit-worthiness of a customer.

Question 4

Approved Sales Order

Answer 4

Contains sales order information for the sales manager to review once the sales order is approved.

Question 5

Stock Release

Answer 5

Document that identifies which items of inventory must be located and picked from the warehouse shelves.

Question 6

Verified Stock Release

Answer 6

After stock is picked, verification of the order for accuracy and release of the goods.

Question 7

Back-Order

Answer 7

Records that stay on file until the inventories arrive from the supplier. Back-ordered items are shipped before new sales are processed.

Question 8

Stock Records

Answer 8

Formal accounting records for controlling inventory assets.

Question 9

Packing Slip

Answer 9

Document that travels with the goods to the customer to describe the contents of the order.

Question 10

Shipping Notice

Answer 10

Document that informs the billing department that the customer’s order has been filled and shipped.

Question 11

Bill of Lading

Answer 11

Formal contract between the seller and the shipping company that transports the goods to the customer.

Question 12

Shipping Log

Answer 12

Specifies orders shipped during the period.

Question 13

Sales Order (Invoice Copy)

Answer 13

Copy of sales order to be reconciled with the shipping notice. It describes the products that were actually shipped to the customer.

Question 14

S.O. pending file

Answer 14

File used to store the sales order (invoice copy) from the receive-order task until receipt of the shipping notice.

Question 15

Sales journal

Answer 15

Special journal used for recording completed sales transactions

Question 16

Journal Voucher

Answer 16

Summarizes details of the sales journals

Question 17

Journal Voucher File

Answer 17

Compilation of all journal vouchers posted to the general ledger.

Question 18

Inventory Subsidiary Ledger

Answer 18

Ledger with inventory records updated from the stock release copy by the inventory control system

Question 19

Accounts Receivable (AR) Subsidiary Ledger

Answer 19

Account record that shows activity by detail for each account type, and contains, at minimum: customer name; customer address; current balance; available credit; transaction dates; invoice numbers; and credits for payments, returns, and allowances.

Question 20

Return Slip

Answer 20

Document recording the counting and inspection of items returned, prepared by the receiving department employee.

Question 21

Credit Memo

Answer 21

Document used to authorize the customer to receive credit for the merchandise returned.

Question 22

Approved Credit Memo

Answer 22

The credit manager evaluates the circumstances of the return and makes a judgment to grant (or disapprove) credit.

Question 23

Remittance Advices

Answer 23

Source document that contains key information required to service the customers account.

Question 24

Remittance List

Answer 24

Cash prelist, where all cash received is logged.

Question 25

Cash Receipts Journal

Answer 25

Records that include details of all cash receipts transactions, including cash sales, miscellaneous cash receipts, and cash received.

Question 26

Deposit Slip

Answer 26

Written notification accompanying a bank deposit that specifies and categorizes the funds (such as checks, bills, and coins) being deposited.

Question 27

Controller's

Answer 27

The cash receipts department typically reports to the treasurer, who has responsibility for financial assets. Accounting functions report to the controller. Normally these two general areas of responsibility are performed independently.

Question 28

Point-of-Sale (POS) systems

Answer 28

Revenue system in which no customer accounts receivable are maintained and inventory is kept on the store's shelves, not in a separate warehouse.

Question 29

The primary risks associated with revenue cycle transactions:

Answer 29

- Selling to un-creditworthy customers - Shipping customers the wrong items or incorrect quantities - Inaccurately recording sales and cash receipts transactions in journals and accounts - Misappropriation of cash receipts and inventory - Unauthorized access to accounting records and confidential reports

Question 30

Prenumbered documents

Answer 30

Documents (sales orders, shipping notices, remittance advices, etc) sequentially numbered by the printer that allow every transaction to be identified uniquely.

Question 31

Multilevel security

Answer 31

It employs programmed techniques that permit simultaneous access to a central system by many users with different access privileges but prevent them from obtaining information for which they lack authorization.

Question 32

Access Control List (ACL)

Answer 32

Lists containing information that defines the access privileges for all valid users of the resource. An access control list assigned to each resource controls access to system resources such as directories, files, programs, and printers.

Question 33

Role-based access control (RBAC)

Answer 33

Formal technique for grouping users according to the system resources they require to perform their assigned tasks.

Question 34

Role

Answer 34

Formal technique for grouping users according to the system resources they require to perform their assigned tasks.

Question 35

Which document triggers the revenue cycle? the customer purchase order the sales order the sales invoice the journal voucher

Answer 35

the customer purchase order The correct answer is "the customer purchase order." The customer purchase order triggers the revenue cycle. The receipt of the customer purchase order indicating the items and quantity required is the first step in the revenue cycle. Customer purchase orders can be received by phone, email, regular mail, or other means.

Question 36

Which department is least likely to be involved in the revenue cycle? billing credit shipping accounts payable

Answer 36

accounts payable The correct answer is "accounts payable." The accounts payable department is least likely to be involved in the revenue cycle. Accounts payable is charged with managing the segment of the expenditure cycle that involves payments to vendors and creditors.

Question 37

The purpose of the sales invoice is to bill the customer. select items from inventory for shipment. record reduction of inventory. transfer goods from seller to shipper.

Answer 37

bill the customer. The correct answer is "bill the customer." The purpose of the sales invoice is to bill the customer. The sales invoice will be sent to the customer for payment. At the same time the invoice will also update inventory, send a journal to the general ledger, and record the sales journal.

Question 38

Which type of control is considered a compensating control for customer payments? access control accounting records supervision segregation of duties

Answer 38

supervision The correct answer is "supervision." Supervision is a compensating control for customer payments. Compensating controls are put in place when more effective controls are deemed too difficult or costly to implement. Supervision is the simplest and most common form of compensating control.

Question 39

Commercial accounting systems have fully integrated modules. The word “integrated” means that batch processing is not an option. the transfer of information among modules occurs automatically. separate entries are made in the general ledger accounts and the subsidiary ledgers. the segregation of duties is not possible.

Answer 39

the transfer of information among modules occurs automatically. The correct answer is "the transfer of information among modules occurs automatically." The word “integrated” means that the transfer of information among modules occurs automatically. In a fully integrated system, the shipping advice will generate the request for invoice automatically. This eliminates the risk that the invoice request is not processed or is processed for a different amount.