Question 1

The activities involved in soliciting and processing customer orders within the revenue cycle are known as the ________.

Accepted Answer

A)  sales order entry process 
B)  shipping order process 
C)  revenue process 
D)  marketing process 
A)  sales order entry process 
B)  shipping order process 
C)  revenue process 
D)  marketing process A

Question 2

How can Electronic Data Interchange (EDI)facilitate the billing and accounts receivable process?

Accepted Answer

The basic document created in the billing process is the sales invoice.Many companies still print paper invoices and send them to customers in the mail.Batch processing of invoices may create cash flow problems because of the time it takes invoices to flow through the regular mail system.Companies that use EDI can create quicker turnaround for payment,and save costs by reducing paper handling and processing.Depending on the number of invoices processed per year,these savings can be significant.

Question 3

During the sales order entry process,a ________ is performed to compare the quantity ordered with the standard amounts normally ordered.

Accepted Answer

A)  completeness test 
B)  redundant data check 
C)  field check 
D)  reasonableness test 
A)  completeness test 
B)  redundant data check 
C)  field check 
D)  reasonableness test D

Question 4

Which of the following documents would normally trigger the process to record a customer payment?

Accepted Answer

A)  Remittance advice 
B)  Customer monthly statement 
C)  Deposit slip 
D)  Sales invoice 
A)  Remittance advice 
B)  Customer monthly statement 
C)  Deposit slip 
D)  Sales invoice

Question 5

In the ________ method of tracking accounts receivable,customers pay according to the amount showing on their monthly statement and payments are applied against the total account balance.

Accepted Answer

A)  specific identification 
B)  open-invoice 
C)  balance forward 
D)  remittance advice 
A)  specific identification 
B)  open-invoice 
C)  balance forward 
D)  remittance advice

Question 6

What is the basic document created in the billing process?

Accepted Answer

A)  bill of lading 
B)  sales order 
C)  packing list 
D)  sales invoice 
A)  bill of lading 
B)  sales order 
C)  packing list 
D)  sales invoice

Question 7

The manager of Callow Youth Clothing was entering an order online from Sad Clown Pajamas.He entered all the items and quantities,completed the checkout and payment process,but the following error message popped up when he tried to exit the site: "Please enter your email address." This message is likely the result of a

Accepted Answer

A)  customer relationship management software application. 
B)  validity check. 
C)  completeness test. 
D)  closed-loop verification. 
A)  customer relationship management software application. 
B)  validity check. 
C)  completeness test. 
D)  closed-loop verification.

Question 8

A monthly statement sent to customers serves a control purpose by

Accepted Answer

A)  providing an opportunity for customers to verify the balance owed and activity on the account. 
B)  triggering the process to record a customer payment. 
C)  summarizing invoices and amounts due for customers. 
D)  reminding customers of the balance due and due date. 
A)  providing an opportunity for customers to verify the balance owed and activity on the account. 
B)  triggering the process to record a customer payment. 
C)  summarizing invoices and amounts due for customers. 
D)  reminding customers of the balance due and due date.

Question 9

Consider the following revenue cycle scenario: The company has been exposed to customer dissatisfaction and the suggested control procedure to be implemented is to install and use bar-code scanners.What is the threat?

Accepted Answer

A)  The company may be shipping the wrong merchandise. 
B)  The company may be shipping the wrong quantities of merchandise. 
C)  The company may be shipping orders to the wrong address. 
D)  All of the above threats may apply to this scenario. 
A)  The company may be shipping the wrong merchandise. 
B)  The company may be shipping the wrong quantities of merchandise. 
C)  The company may be shipping orders to the wrong address. 
D)  All of the above threats may apply to this scenario.

Question 10

Explain how validity checks,completeness tests and reasonableness tests can be implemented to ensure accuracy of customer orders.

Accepted Answer

Validity checks can be used to compare t

Question 11

The cashier deposits checks in the bank for Very Large Corporation (VLC)and also prepares payments to vendors.Of the following,who is best to reconcile the bank statement to VLC's records on a regular basis?

Accepted Answer

A)  Internal audit department 
B)  Treasurer 
C)  External auditor 
D)  Cashier 
A)  Internal audit department 
B)  Treasurer 
C)  External auditor 
D)  Cashier

Question 12

Sad Clown Pajamas is an Internet-based wholesaler.Customers enter their orders online.The manager of Callow Youth Clothing was entering an order when the following error message popped up: "Your total order exceeds your available credit.A Credit Department representative will contact you within 24 hours." This message is the result of a

Accepted Answer

A)  validity check. 
B)  reasonableness test. 
C)  limit check. 
D)  sign check. 
A)  validity check. 
B)  reasonableness test. 
C)  limit check. 
D)  sign check.

Question 13

Because it is the most fungible of all assets,the management of cash has always been the most difficult of all control issues.The most important of cash controls is

Accepted Answer

A)  minimization of cash handling. 
B)  lockbox arrangements. 
C)  segregation of duties. 
D)  frequent reconciliation of records. 
A)  minimization of cash handling. 
B)  lockbox arrangements. 
C)  segregation of duties. 
D)  frequent reconciliation of records.

Question 14

When a customer pays off the balance on an invoice,the payment is credited to the ________ file.

Accepted Answer

A)  customer master 
B)  sales transaction 
C)  cash receipts master 
D)  All of the above are correct. 
A)  customer master 
B)  sales transaction 
C)  cash receipts master 
D)  All of the above are correct.

Question 15

A customer service manager at Sad Clown Pajamas,Bob,received a call from the manager at Callow Youth Clothing,who informed Bob that Callow was entering bankruptcy liquidation and it was unlikely that they would be able to pay the outstanding balance on their account.Bob should

Accepted Answer

A)  document the phone conversation and forward it to the billing department manager. 
B)  prepare a credit memo. 
C)  approve a credit memo. 
D)  document the phone conversation and forward it to the credit department manager. 
A)  document the phone conversation and forward it to the billing department manager. 
B)  prepare a credit memo. 
C)  approve a credit memo. 
D)  document the phone conversation and forward it to the credit department manager.

Question 16

To prevent the loss of valuable data in the revenue cycle,internal file labels can be used to

Accepted Answer

A)  keep competitors from accessing files. 
B)  record off-site storage locations. 
C)  organize the on-site physical storage site. 
D)  reduce the possibility of erasing important files. 
A)  keep competitors from accessing files. 
B)  record off-site storage locations. 
C)  organize the on-site physical storage site. 
D)  reduce the possibility of erasing important files.

Question 17

The manager of Callow Youth Clothing was entering an order online from Sad Clown Pajamas.He ordered 100 one-size fits all pajama bottoms,but when he ordered 1000 one-size fits all pajama tops,the following error message popped up: "Did you mean to enter a quantity of 1000 for your order?" This message is the result of a

Accepted Answer

A)  reasonableness test. 
B)  validity check. 
C)  limit check. 
D)  closed-loop verification. 
A)  reasonableness test. 
B)  validity check. 
C)  limit check. 
D)  closed-loop verification.

Question 18

Failure to collect cash on credit sales is a threat in the revenue cycle.What controls can be used to help neutralize this threat?

Accepted Answer

Both accounts receivable and cash flows

Question 19

A company should check inventory quantities before accepting a sales order for all the following reasons except to

Accepted Answer

A)  verify the accuracy of the perpetual inventory records. 
B)  inform the customer about availability and delivery times. 
C)  know which items may need to be back ordered. 
D)  update inventory records to reduce the quantity available by the number of items ordered. 
A)  verify the accuracy of the perpetual inventory records. 
B)  inform the customer about availability and delivery times. 
C)  know which items may need to be back ordered. 
D)  update inventory records to reduce the quantity available by the number of items ordered.

Question 20

When a proper segregation of duties exists in the area of handling cash receipts,the ________,who reports to the ________,actually handles the cash and is not the same person who posts cash receipts to customer accounts.

Accepted Answer

A)  cashier; treasurer 
B)  cashier; controller 
C)  accountant; treasurer 
D)  accountant; controller 
A)  cashier; treasurer 
B)  cashier; controller 
C)  accountant; treasurer 
D)  accountant; controller

The activities involved in soliciting and processing customer orders within the revenue cycle are known as the ________.

How can Electronic Data Interchange (EDI)facilitate the billing and accounts receivable process?

During the sales order entry process,a ________ is performed to compare the quantity ordered with the standard amounts normally ordered.

Which of the following documents would normally trigger the process to record a customer payment?

In the ________ method of tracking accounts receivable,customers pay according to the amount showing on their monthly statement and payments are applied against the total account balance.

What is the basic document created in the billing process?

A monthly statement sent to customers serves a control purpose by

Consider the following revenue cycle scenario: The company has been exposed to customer dissatisfaction and the suggested control procedure to be implemented is to install and use bar-code scanners.What is the threat?

Explain how validity checks,completeness tests and reasonableness tests can be implemented to ensure accuracy of customer orders.

The cashier deposits checks in the bank for Very Large Corporation (VLC)and also prepares payments to vendors.Of the following,who is best to reconcile the bank statement to VLC's records on a regular basis?

Because it is the most fungible of all assets,the management of cash has always been the most difficult of all control issues.The most important of cash controls is

When a customer pays off the balance on an invoice,the payment is credited to the ________ file.

A customer service manager at Sad Clown Pajamas,Bob,received a call from the manager at Callow Youth Clothing,who informed Bob that Callow was entering bankruptcy liquidation and it was unlikely that they would be able to pay the outstanding balance on their account.Bob should

To prevent the loss of valuable data in the revenue cycle,internal file labels can be used to

Failure to collect cash on credit sales is a threat in the revenue cycle.What controls can be used to help neutralize this threat?

A company should check inventory quantities before accepting a sales order for all the following reasons except to

When a proper segregation of duties exists in the area of handling cash receipts,the ,who reports to the ,actually handles the cash and is not the same person who posts cash receipts to customer accounts.

Accounting Information Systems: an Overview

Overview of Transaction Processing and Erp Systems

Systems Documentation Techniques

Relational Databases

Computer Fraud

Computer Fraud and Abuse Techniques

Control and Accounting Information Systems

Information Systems Controls for System Reliability Part 1: Information Security

Information Systems Controls for Systems Reliability Part 2: Confidentiality and Privacy

Information Systems Controls for Systems Reliability Part 3: Processing Integrity and Availability

Auditing Computer-Based Information Systems

The Expenditure Cycle: Purchasing to Cash Disbursements

The Production Cycle

The Human Resources Management and Payroll Cycle

General Ledger and Reporting System

The Rea Data Model

Implementing an Rea Model in a Relational Database

Special Topics in Rea Modeling

Introduction to Systems Development Systems Analysis

Ais Development Strategies

Systems Design, implementation, and Operation

Filters

Exam 12: The Revenue Cycle: Sales to Cash Collections

The activities involved in soliciting and processing customer orders within the revenue cycle are known as the ________.

How can Electronic Data Interchange (EDI)facilitate the billing and accounts receivable process?

During the sales order entry process,a ________ is performed to compare the quantity ordered with the standard amounts normally ordered.

Which of the following documents would normally trigger the process to record a customer payment?

In the ________ method of tracking accounts receivable,customers pay according to the amount showing on their monthly statement and payments are applied against the total account balance.

What is the basic document created in the billing process?

A monthly statement sent to customers serves a control purpose by

Consider the following revenue cycle scenario: The company has been exposed to customer dissatisfaction and the suggested control procedure to be implemented is to install and use bar-code scanners.What is the threat?

Explain how validity checks,completeness tests and reasonableness tests can be implemented to ensure accuracy of customer orders.

The cashier deposits checks in the bank for Very Large Corporation (VLC)and also prepares payments to vendors.Of the following,who is best to reconcile the bank statement to VLC's records on a regular basis?

Because it is the most fungible of all assets,the management of cash has always been the most difficult of all control issues.The most important of cash controls is

When a customer pays off the balance on an invoice,the payment is credited to the ________ file.

A customer service manager at Sad Clown Pajamas,Bob,received a call from the manager at Callow Youth Clothing,who informed Bob that Callow was entering bankruptcy liquidation and it was unlikely that they would be able to pay the outstanding balance on their account.Bob should

To prevent the loss of valuable data in the revenue cycle,internal file labels can be used to

Failure to collect cash on credit sales is a threat in the revenue cycle.What controls can be used to help neutralize this threat?

A company should check inventory quantities before accepting a sales order for all the following reasons except to

When a proper segregation of duties exists in the area of handling cash receipts,the ________,who reports to the ________,actually handles the cash and is not the same person who posts cash receipts to customer accounts.

Accounting Information Systems: an Overview

Overview of Transaction Processing and Erp Systems

Systems Documentation Techniques

Relational Databases

Computer Fraud

Computer Fraud and Abuse Techniques

Control and Accounting Information Systems

Information Systems Controls for System Reliability Part 1: Information Security

Information Systems Controls for Systems Reliability Part 2: Confidentiality and Privacy

Information Systems Controls for Systems Reliability Part 3: Processing Integrity and Availability

Auditing Computer-Based Information Systems

The Expenditure Cycle: Purchasing to Cash Disbursements

The Production Cycle

The Human Resources Management and Payroll Cycle

General Ledger and Reporting System

The Rea Data Model

Implementing an Rea Model in a Relational Database

Special Topics in Rea Modeling

Introduction to Systems Development Systems Analysis

Ais Development Strategies

Systems Design, implementation, and Operation

Filters

When a proper segregation of duties exists in the area of handling cash receipts,the ,who reports to the ,actually handles the cash and is not the same person who posts cash receipts to customer accounts.