Question 1

Which of the following two terms both refer to the same document?

Accepted Answer

A) Price list & sales order 
B) Packaging slip & bill of lading 
C) Shipping log & packing slip 
D) Sales order & purchase order 
A) Price list & sales order 
B) Packaging slip & bill of lading 
C) Shipping log & packing slip 
D) Sales order & purchase order

Question 2

Which of the following is not a method of unethically inflating sales revenue?

Accepted Answer

A) Channel stuffing 
B) Holding sales open 
C) Premature recognition of contingent sales 
D) Promotional price discounts
TEST BANK - CHAPTER 8 - MULTIPLE CHOICE 
A) Channel stuffing 
B) Holding sales open 
C) Premature recognition of contingent sales 
D) Promotional price discounts
TEST BANK - CHAPTER 8 - MULTIPLE CHOICE

Question 3

An IT system that uses touch screens, bar coded products, and credit card authorization during the sale is called an):

Accepted Answer

A) Electronic data interchange system. 
B) E-commerce system. 
C) Point of sales system. 
D) E-payables system. 
A) Electronic data interchange system. 
B) E-commerce system. 
C) Point of sales system. 
D) E-payables system.

Question 4

Features that assist management and accountants, as the result of the point-of-sale systems, include all of the following, except:

Accepted Answer

A) Bar code scanning eliminates the need to manually enter product codes, quantities, or prices. 
B) Real-time update of cash, sales, and inventory records allows for immediate analysis of sales trends, inventory needs, and cash on hand. 
C) List prices can be changed by the check-out clerks to take advantage of any price changes. 
D) Credit card authorization during the sale save time and help prevent credit card fraud. 
A) Bar code scanning eliminates the need to manually enter product codes, quantities, or prices. 
B) Real-time update of cash, sales, and inventory records allows for immediate analysis of sales trends, inventory needs, and cash on hand. 
C) List prices can be changed by the check-out clerks to take advantage of any price changes. 
D) Credit card authorization during the sale save time and help prevent credit card fraud.

Question 5

The purpose of tracing sales invoices to shipping documents would be to provide evidence that:

Accepted Answer

A) Shipments to customers were properly invoiced. 
B) No duplicate shipments or billings occurred. 
C) Goods billed to customers were shipped. 
D) All prenumbered sales invoices were accounted for. 
A) Shipments to customers were properly invoiced. 
B) No duplicate shipments or billings occurred. 
C) Goods billed to customers were shipped. 
D) All prenumbered sales invoices were accounted for.

Question 6

Common means of presenting the revenue and cash collections processes pictorially include:

Accepted Answer

A) Data Flow Diagram 
B) Document Flowchart 
C) Business Process Map 
D) All of the above 
A) Data Flow Diagram 
B) Document Flowchart 
C) Business Process Map 
D) All of the above

Question 7

Which of the following is not one of the stated physical controls for inventory in a warehouse?

Accepted Answer

A) Surveillance Cameras 
B) Alarm Systems 
C) Backup Copies 
D) Security Guards 
A) Surveillance Cameras 
B) Alarm Systems 
C) Backup Copies 
D) Security Guards

Question 8

The custody responsibilities for cash receipts includes all of the following, except:

Accepted Answer

A) Updating accounts receivable records 
B) Opening mail 
C) Preparing a list of collections 
D) Handling receipts of currency and checks 
A) Updating accounts receivable records 
B) Opening mail 
C) Preparing a list of collections 
D) Handling receipts of currency and checks

Question 9

When a company sells items over the Internet, it is usually called e-commerce.There are many IT risks related to Internet sales.The risk of invalid data entered by a customer would be an):

Accepted Answer

A) Availability risk. 
B) Processing integrity risk. 
C) Security risk. 
D) Confidentiality risk. 
A) Availability risk. 
B) Processing integrity risk. 
C) Security risk. 
D) Confidentiality risk.

Question 10

Financial Stewardship can be ensured in the revenue process by establishing and maintaining which of the following?

Accepted Answer

A) reliable revenue processes 
B) Internal controls 
C) ethical practices 
D) All of the above
TEST BANK - CHAPTER 8 - TRUE / FALSE 
A) reliable revenue processes 
B) Internal controls 
C) ethical practices 
D) All of the above
TEST BANK - CHAPTER 8 - TRUE / FALSE

Question 11

Common types of independent checks within the revenue process include all of the following, except:

Accepted Answer

A) Verification of information in the sales journal and on sales invoices. 
B) Verification of the bank statement and the cash account in the general journal. 
C) Reconciliation of accounts receivable detail with invoices and with the general ledger. 
D) Reconciliation of inventory records with actual counted) quantities on hand. 
A) Verification of information in the sales journal and on sales invoices. 
B) Verification of the bank statement and the cash account in the general journal. 
C) Reconciliation of accounts receivable detail with invoices and with the general ledger. 
D) Reconciliation of inventory records with actual counted) quantities on hand.

Question 12

If a sales order comes from a new customer, it is necessary to evaluate the creditworthiness of that customer before the sale is approved.

Accepted Answer

A) True 
 B)False

Question 13

The separation of the custody of inventory from the accounts receivable record keeping will help to minimize the related risk of:

Accepted Answer

A) Incorrect amounts 
B) Invalid returns 
C) Fictitious customers 
D) Timing issues 
A) Incorrect amounts 
B) Invalid returns 
C) Fictitious customers 
D) Timing issues

Question 14

Few deceptions and fraudulent acts in the business and accounting environment relate to revenue measurement and recognition.

Accepted Answer

A) True 
 B)False

Question 15

Billing to the customer should take place prior to shipment so that the customer receives the bill before the merchandise arrives.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following relationships does not violate the rules of segregation of duties?

Accepted Answer

A) Credit authorization and preparation of the sales order. 
B) Preparation of the sales order and sales invoice. 
C) Preparing goods for shipment and accounting for inventory. 
D) Entering sales in the sales journal and handling the inventory. 
A) Credit authorization and preparation of the sales order. 
B) Preparation of the sales order and sales invoice. 
C) Preparing goods for shipment and accounting for inventory. 
D) Entering sales in the sales journal and handling the inventory.

Question 17

The internal control activity related to the adequate records and documents, related to sales, includes which of the following?

Accepted Answer

A) Those responsible for recording sales should ensure that the supporting documentation is retained and organized. 
B) Information systems duties included in the revenue process includes the preparation of sales orders and shipping logs. 
C) All records are to be prepared by someone other than the person who has custody of the assets. 
D) The authorization process is to remain separate from the recording process. 
A) Those responsible for recording sales should ensure that the supporting documentation is retained and organized. 
B) Information systems duties included in the revenue process includes the preparation of sales orders and shipping logs. 
C) All records are to be prepared by someone other than the person who has custody of the assets. 
D) The authorization process is to remain separate from the recording process.

Question 18

The risks that may affect the revenue and cash collection processes include all of the following, except:

Accepted Answer

A) Transactions may have been recorded in the wrong customer account. 
B) Transactions may be recorded in the wrong amount. 
C) Invalid transactions may have been omitted from the records. 
D) Transactions may not have been accumulated or transferred to the accounting records correctly. 
A) Transactions may have been recorded in the wrong customer account. 
B) Transactions may be recorded in the wrong amount. 
C) Invalid transactions may have been omitted from the records. 
D) Transactions may not have been accumulated or transferred to the accounting records correctly.

Question 19

When a credit memorandum has a reference to the original sales invoice and approved price list it will assure that the correct customer receives credit for the return.

Accepted Answer

A) True 
 B)False

Question 20

Specific internal control procedures to be performed, specifically independent checks and reconciliations, should be performed by someone who as the responsibility for the recording of the transactions and the custody of the assets received.

Accepted Answer

A) True 
 B)False

Which of the following two terms both refer to the same document?

Which of the following is not a method of unethically inflating sales revenue?

An IT system that uses touch screens, bar coded products, and credit card authorization during the sale is called an):

Features that assist management and accountants, as the result of the point-of-sale systems, include all of the following, except:

The purpose of tracing sales invoices to shipping documents would be to provide evidence that:

Common means of presenting the revenue and cash collections processes pictorially include:

Which of the following is not one of the stated physical controls for inventory in a warehouse?

The custody responsibilities for cash receipts includes all of the following, except:

When a company sells items over the Internet, it is usually called e-commerce.There are many IT risks related to Internet sales.The risk of invalid data entered by a customer would be an):

Financial Stewardship can be ensured in the revenue process by establishing and maintaining which of the following?

Common types of independent checks within the revenue process include all of the following, except:

If a sales order comes from a new customer, it is necessary to evaluate the creditworthiness of that customer before the sale is approved.

The separation of the custody of inventory from the accounts receivable record keeping will help to minimize the related risk of:

Few deceptions and fraudulent acts in the business and accounting environment relate to revenue measurement and recognition.

Billing to the customer should take place prior to shipment so that the customer receives the bill before the merchandise arrives.

Which of the following relationships does not violate the rules of segregation of duties?

The internal control activity related to the adequate records and documents, related to sales, includes which of the following?

The risks that may affect the revenue and cash collection processes include all of the following, except:

When a credit memorandum has a reference to the original sales invoice and approved price list it will assure that the correct customer receives credit for the return.

Specific internal control procedures to be performed, specifically independent checks and reconciliations, should be performed by someone who as the responsibility for the recording of the transactions and the custody of the assets received.

Introduction to AIS

Foundational Concepts of the AIS

Fraud, Ethics, and Internal Control

Internal Controls and Risks in IT Systems

IT Governance

Erp Systems

Auditing Information Technology Bases Processes

Expenditures Processes and Controls - Purchases

Expenditures Processes and Controls Payroll and Fixed Assets

Conversion Processes and Controls

Administrative Processes and Controls

Data and Databases

Ecommerce and Ebusiness

Filters

Exam 8: Revenue and Cash Collection Processes

Which of the following two terms both refer to the same document?

Which of the following is not a method of unethically inflating sales revenue?

An IT system that uses touch screens, bar coded products, and credit card authorization during the sale is called an):

Features that assist management and accountants, as the result of the point-of-sale systems, include all of the following, except:

The purpose of tracing sales invoices to shipping documents would be to provide evidence that:

Common means of presenting the revenue and cash collections processes pictorially include:

Which of the following is not one of the stated physical controls for inventory in a warehouse?

The custody responsibilities for cash receipts includes all of the following, except:

When a company sells items over the Internet, it is usually called e-commerce.There are many IT risks related to Internet sales.The risk of invalid data entered by a customer would be an):

Financial Stewardship can be ensured in the revenue process by establishing and maintaining which of the following?

Common types of independent checks within the revenue process include all of the following, except:

If a sales order comes from a new customer, it is necessary to evaluate the creditworthiness of that customer before the sale is approved.

The separation of the custody of inventory from the accounts receivable record keeping will help to minimize the related risk of:

Few deceptions and fraudulent acts in the business and accounting environment relate to revenue measurement and recognition.

Billing to the customer should take place prior to shipment so that the customer receives the bill before the merchandise arrives.

Which of the following relationships does not violate the rules of segregation of duties?

The internal control activity related to the adequate records and documents, related to sales, includes which of the following?

The risks that may affect the revenue and cash collection processes include all of the following, except:

When a credit memorandum has a reference to the original sales invoice and approved price list it will assure that the correct customer receives credit for the return.

Specific internal control procedures to be performed, specifically independent checks and reconciliations, should be performed by someone who as the responsibility for the recording of the transactions and the custody of the assets received.

Introduction to AIS

Foundational Concepts of the AIS

Fraud, Ethics, and Internal Control

Internal Controls and Risks in IT Systems

IT Governance

Erp Systems

Auditing Information Technology Bases Processes

Expenditures Processes and Controls - Purchases

Expenditures Processes and Controls Payroll and Fixed Assets

Conversion Processes and Controls

Administrative Processes and Controls

Data and Databases

Ecommerce and Ebusiness

Filters