Exam 4: The Revenue Cycle

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 department prepares the bill of lading?

The data processing method that can shorten the cash cycle is

What is the purpose of the credit memo?

The packing slip is also known as the shipping notice.

The customer open order file is used to

The adjustment to accounting records to reflect the decrease in inventory due to a sale occurs in the

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?

An advantage of real-time processing of sales is

The clerk who opens the mail routinely steals remittances and checks.Describe a specific internal control procedure that would prevent or detect this fraud.

If a customer submits a written purchase order,there is no need to prepare a sales order.

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

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 unique control problems does EDI pose?

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

Usually,specific authorization is required for all of the following except

What is multilevel security?

The billing department is not responsible for

Which department is least likely to be involved in the revenue cycle?

Good internal controls in the revenue cycle should ensure all of the following except