Exam 4: The Revenue Cycle

What is a bill of lading?

The most effective internal control procedure to prevent or detect the creation of fictitious credit memoranda for sales returns is to

What is automation and why is it used?

The credit department

How is independent verification carried out in a manual revenue system?

Which document is NOT prepared by the sales department?

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

Explain the steps needed to process a credit memo in the sales return system.

Process controls are controls over the logic of the application.

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

The POS environment places both cash and inventory at risk.

Commercial accounting systems have fully integrated modules. The word "integrated" means that

List two points in the sales processing system when authorization is required.

What are the benefits and risks of making Internet sales?

In real-time processing systems, routine credit authorizations are automated.

What is the purpose(s) of the stock release document?

A written customer purchase order is required to trigger the sales order system.

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.

All of the following are advantages of real-time processing of sales except