Exam 11: The Billingaccounts Receivablecash Receipts Barcrprocess

The B/AR/CR process completes the order to cash process by accomplishing the activities of billing customers,managing customer accounts,and securing payment for goods and services rendered.

In an open-item system,accounts receivable records consist of a customer's current balance due,past-due balance,and the finance charges and payments related to the account.

The ACH network electronically transfers funds by crediting the collector's bank account and debiting the payer's bank account for the amount of a payment.

In the billing function described in the text,the control plan that contributes to effective operations is:

Below is the narrative of the "Manage customer accounts" portion of the B/AR/CR process. Narrative Description Processes 2.1 through 2.3 relate to sales returns adjustments.This process begins when there is notification from the receiving department that goods have been returned by a customer.Subprocess 2.1 obtains data from the accounts receivable master data to validate the return.If the sales return is not valid,it will be rejected (see Reject stub)and processed through a separate exception routine.If the sales return is valid,it is sent to subprocess 2.2 where a credit memo is prepared and sent to the customer,and the accounts receivable master data is updated to reflect the credit.At the same time,the validated sales return is sent to subprocess 2.3 where a journal voucher is prepared,which is used to create a record in the AR adjustments event data store (i.e. ,the journal),and the general ledger is notified that a credit memo has been issued.This results in updates to sales returns and allowances and to AR. Process 2.4 is triggered by a periodic review of aging details obtained from the accounts receivable master data.The aging details would be used to identify and follow up on late-paying customer accounts.One of two types of adjustments might result from this review: Like process 2.4,bubble 2.5,"Prepare customer statements," also is triggered by a periodic event that recurs at specified intervals,often on a monthly basis in practice.Details of unpaid invoices are extracted from the accounts receivable master data and are summarized in a statement of account that is mailed (or sent electronically)to customers. Required: Using the DFD in TB Figure 11.5 and the narrative description above,identify the words that belong in items 1 to 15 of Diagram 2.0 (TB Figure 11.6).

The AR master file address is a postal address,maintained by the firm's bank,which is used solely for the purpose of collecting checks.

The ______________________________ data store contains the details of each payment as reflected on the remittance advice (RA)accompanying a payment.

With the consolidation/aggregation method of an electronic bill presentment and payment (EBPP)system,a company's bills are posted,along with bills from other companies,to a Web site hosted by a third party.Customers then go to that site to pay bills from a number of companies.

A billing system that can be used when there is little or no delay between the receipt of the customer order and the shipment of the goods is a:

An electronic bill presentment and payment (EBPP)system is a B2C system that uses a Web site to post customer bills and to receive electronic payments.

A customer is instructed to send his remittance advice and check to a bank's postal address.This method for collecting customer cash receipts is called:

Organizations should reconcile their ______________________________ on a regular basis to ensure that valid deposits are recorded correctly.

The accounts receivable master data is a repository of all unpaid invoices issued by an organization and awaiting final disposition.

Recording B/AR/CR event data is generally the responsibility of the treasury department,which typically reports to the controller function.

Recording B/AR/CR event data is generally the responsibility of the accounts receivable department,which for good internal control typically reports to the ______________________________ function.

The cash receipts process can be accelerated by using the ACH network because it is:

Which of the following pairs of functions would you expect might report directly to the vice president of finance?

The ______________________________ process supports the repetitive work routines of the credit department,the cashier,and the accounts receivable department.

Inputs to the B/AR/CR process normally could include all of the following except:

With the biller direct method of an electronic bill presentment and payment (EBPP)system,a company posts its bills/invoices to its own Web site (or to a Web site hosted by a third party)and sends an e-mail notification to its customers telling them that their bill has been posted.