Exam 4: The Revenue Cycle

The accounts receivable clerk destroys all invoices for sales made to members of her family and does not record the sale in the accounts receivable subsidiary ledger.Which procedure will not detect this fraud?

In a manual system,the billing department is responsible for recording the sale in the sales journal.

For each of the following documents,describe its purpose,the functional area preparing it,and the key data included: remittance advice,remittance list,deposit slip.

Which document is included with a shipment sent to a customer?

Goods are shipped to a customer,but the shipping department does not notify billing and the customer never receives an invoice.Describe a specific internal control procedure that would detect this error.

What is the role of the shipping notice?

Which of following functions should be segregated?

The stock release document is prepared by the shipping department to provide evidence that the goods have been released to the customer.

What features of a reengineered cash receipts system contribute to improved control and reduced costs? What complicates the process?

The billing department is not responsible for

In a computerized accounting system,segregation of functions refers to inventory control,accounts receivable,billing,and general ledger tasks.

The purpose of the sales invoice is to

What function does the receiving department serve in the revenue cycle?

A weekly reconciliation of cash receipts would include comparing

Customers should be billed for back-orders when

What is the purpose of the credit memo?

The principal source document in the sales order system is the sales order.

Which document is NOT prepared by the sales department?

When customer payments are received,the mailroom clerk sends the checks to the cash receipts clerk and the remittance advices to the AR clerk.

The credit department