Exam 8: Revenue and Cash Collection Processes

Internal controls over sales returns are similar to those for the revenue process where it is important to match receiving reports for returns with the related credit memos to ensure that the company issues credit for all returns for the correct amounts.

Company to company sales normally occur on account and involve a time span given for the customer to pay the vendor.The actual number of days will depend on the credit terms and the diligence of the customer concerning on-time payments.

Input controls of the IT system would include all of the following EXCEPT:

This type of highly integrated IT system incorporates electronic processing of sales-related activities and, generally, the sales processes are transacted over the internet.

Even though most companies collect order data from customers, the manner of receiving order data seldom varies.

The use of control totals and related acknowledgments can reduce the risk of denial of service attacks by hackers.

In order to ensure that all records are updated only for authorized transactions, appropriate individuals should be assigned all of the following duties, except:

This document is prepared on a regular basis to accumulated and summarize all the transactions that have taken place between the customer and the company within the period.

What a customer refers to as a purchase order is referred to as a sales order by the vendor.

The preparation of deposit slips on prenumbered forms will help to minimize the related risk of:

A ________ is prepared by warehouse personnel and lists all items included in a shipment.

Because different companies conduct business in different manners, there tends to be few similarities in the way the related business processes are carried out.

This item documents the quantities and descriptions of items ordered.Items from this document should be pulled from the warehouse shelves and packaged for the customer.

All of the following documents are necessary in the cash receipts process except:

Effective and efficient internal control often takes up valuable management time that could otherwise be spent on attention to revenue growth and cost controls.

In a large company, there are hundreds, possibly thousands, of sales transactions each day.The company needs to have in place, systems and processes to:

Availability risks of e-commerce, or e-business, include all of the following, except:

The documentation accompanying payment that identifies the customer account number and invoice to which the payment applies is referred to as an):

At a minimum, cash receipts should be deposited on a weekly basis.

Examples of characteristics that indicate a company may be more risky with respect to the revenue process include all of the following, except: