Exam 9: Auditing the Revenue Cycle

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

The billing department is not responsible for

The purpose of the invoice is to bill the customer.

What specific internal control procedure would prevent a customer from being billed for all 50 items ordered although only 40 items were shipped?

The reconciliation that occurs in the shipping department is intended to ensure that

A remittance advice is a form of turn-around document.

What are the three rules that ensure that no single employee or department processes a transaction in its entirety.

The purpose of the sales invoice is to

What task can the accounts receivable department engage in to verify that all checks sent by the customers have been appropriately deposited and recorded?

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

With regard to segregation of duties,rule one is that transaction authorization and transaction processing should be separated.What does this require in the revenue cycle?

A bill of lading is a request for payment for shipping charges.

What specific internal control procedure would prevent an increase in sales returns since salesmen were placed on commission?

Which type of control is considered a compensating control?

An advantage of real-time processing of sales is

The revenue cycle consists of

What is the objective of re-engineering?

A cash prelist is

A weekly reconciliation of cash receipts would include comparing

Inventory control has physical custody of inventory.