Basic segregation of duties requires the credit manager reports to the
________ and the treasurer report to the ________.
A) treasurer; controller
B) treasurer; vice president of finance
C) controller; vice president of finance
D) marketing manager; vice president of finance
A) treasurer; controller
B) treasurer; vice president of finance
C) controller; vice president of finance
D) marketing manager; vice president of finance
The ________ normally triggers the billing process in the revenue cycle.
A) sales order received from the sales department
B) picking ticket received from the sales department
C) packing slip received from the shipping department
D) journal voucher received from the shipping department
A) sales order received from the sales department
B) picking ticket received from the sales department
C) packing slip received from the shipping department
D) journal voucher received from the shipping
department
The ________ normally triggers the customer payment recording process.
A) sales invoice
B) deposit slip
C) remittance advice
D) customer monthly statement
A) sales invoice
B) deposit slip
C) remittance advice
D) customer monthly statement
The ________ should always be included with a merchandise shipment to a
customer.
A) picking ticket
B) packing slip
C) sales invoice
D) remittance advice
A) picking ticket
B) packing slip
C) sales invoice
D) remittance advice
According to generally accepted accounting principles, a sale is recognized
when
A) cash is received from the customer.
B) inventory is removed from the warehouse.
C) inventory becomes the legal property of the customer.
D) a sales order is approved by sales, inventory control, and credit
departments.
A) cash is received from the customer.
B) inventory is removed from the warehouse.
C) inventory becomes the legal property of the customer.
D) a sales order is approved by sales, inventory control,
and credit departments.
________ is not a basic activity of the revenue cycle.
A) Sales order entry
B) Shipping
C) Receiving
D) Billing
A) Sales order entry
B) Shipping
C) Receiving
D) Billing
When a customer places an order (on account) for a certain product, what
should be done before the order is checked for inventory availability?
A) The customer’s available credit should be checked.
B) The sales order should be created and written to a file.
C) Shipping should be notified of an order in process.
D) A picking list should be generated for the warehouse.
A) The customer’s available credit should be checked.
B) The sales order should be created and written to a file.
C) Shipping should be notified of an order in process.
D) A picking list should be generated for the warehouse.
How is credit approval generally handled for established customers with a
documented payment history?
A) A new credit application is requested.
B) General authorization by a sales clerk
C) Specific authorization by the credit manager
D) A formal credit check should be made for each sale.
A) A new credit application is requested.
B) General authorization by a sales clerk
C) Specific authorization by the credit manager
D) A formal credit check should be made for each sale.
What is a typical procedure for processing sales orders from new customers
or customers making a purchase that causes their credit limit to be
exceeded?
A) General authorization to approve the order is given to sales clerks.
B) Specific authorization must be granted by the credit manager.
C) The sale should be rejected.
D) The sales clerk should order a report from a credit bureau before
approving the order.
A) General authorization to approve the order is given to
sales clerks.
B) Specific authorization must be granted by the credit
manager.
C) The sale should be rejected.
D) The sales clerk should order a report from a credit
bureau before approving the order.
Checking the quantity of inventory available before accepting a sales order
is a good practice for all of the reasons except to
A) determine which items may need to be back ordered.
B) verify the accuracy of the perpetual inventory records.
C) inform the customer about availability and delivery times.
D) update inventory records to reduce the quantity available by the number
of items ordered.
A) determine which items may need to be back ordered.
B) verify the accuracy of the perpetual inventory records.
C) inform the customer about availability and delivery
times.
D) update inventory records to reduce the quantity
available by the number of items ordered.
Special software packages called ________ can help an organization
manage customer service.
A) EDI systems
B) CRM systems
C) POS systems
D) VMI systems
A) EDI systems
B) CRM systems
C) POS systems
D) VMI systems
The ________ is a legal contract that defines responsibility for goods that
are in transit.
A) bill of lading
B) packing slip
C) back order
D) picking list
A) bill of lading
B) packing slip
C) back order
D) picking list
Two documents usually accompany goods shipped to a customer. What are
the two documents?
A) a bill of lading and an invoice
B) a packing slip and a bill of lading
C) an invoice and a packing slip
D) an invoice and a sales order
A) a bill of lading and an invoice
B) a packing slip and a bill of lading
C) an invoice and a packing slip
D) an invoice and a sales order
The basic document created in the billing process is call a ________.
A) bill of lading
B) sales invoice
C) sales order
D) packing list
A) bill of lading
B) sales invoice
C) sales order
D) packing list
A company uses the method for tracking accounts receivable where
customers pay according to individual sales invoices. This describes the
________ method.
A) monthly statement
B) open-invoice
C) balance forward
D) cycle billing
A) monthly statement
B) open-invoice
C) balance forward
D) cycle billing
A method for tracking accounts receivable that matches specific invoices
and payments from the customer is called a(n) ________ method.
A) specific identification
B) balance forward
C) cycle billing
D) open-invoice
A) specific identification
B) balance forward
C) cycle billing
D) open-invoice
The document a customer returns with their payment and that identifies the
source and the amount of the payment is called a
A) remittance advice.
B) remittance list.
C) credit memorandum.
D) debit memorandum.
A) remittance advice.
B) remittance list.
C) credit memorandum.
D) debit memorandum.
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.
A) specific identification
B) open-invoice
C) balance forward
A) specific identification
B) open-invoice
C) balance forward
D) remittance advice
D) remittance advice
When a customer pays off the balance on an invoice, the payment is
credited to the ________ file.
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.
A type of business document in which part of the original document is
returned to the source for further processing is called a ________
document.
A) feedback
B) returnable
C) closed-loop
D) turnaround
A) feedback
B) returnable
C) closed-loop
D) turnaround
A document typically encountered in the revenue cycle that is both an
output document and a source document is the
A) sales invoice.
B) customer purchase order.
C) sales order.
D) packing slip.
A) sales invoice.
B) customer purchase order.
C) sales order.
D) packing slip.
A(n) ________ system prepares and mails monthly statements to customers
throughout the entire month, instead of just at the end of the month.
A) continuous
B) open-invoice
C) cycle billing
D) balance forward
A) continuous
B) open-invoice
C) cycle billing
D) balance forward
The activities involved in soliciting and processing customer orders within
the revenue cycle are known as the
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.
Laz Chance wears roller blades and headphones when he is at work at the
Squishy Things Toy Company. He is a product packer. The headphones
give him computer-generated instructions so he knows the location of each
item and quantity that should be included in the order. These instructions
are the equivalent of a
A) picking ticket.
B) bill of lading.
C) packing slip.
D) sales order.
A) picking ticket.
B) bill of lading.
C) packing slip.
D) sales order.
The shipping department at Eka Toys follows policies that determine which
carrier will deliver orders according to the size, weight, and destination of
the shipment. It maintains standing agreements with shippers that specify
legal responsibility for the shipment while it is in transit. The terms of the
shipping agreements are documented on
A) picking tickets.
B) packing slips.
C) bills of lading.
D) RFID tags.
A) picking tickets.
B) packing slips.
C) bills of lading.
D) RFID tags.
The accounts receivable management method typically used by credit card
companies is
A) balance forward.
B) postbilling.
C) monthly statement.
D) open-invoice.
A) balance forward.
B) postbilling.
C) monthly statement.
D) open-invoice.
If a firm does not use an ERP, the best way to mitigate the risk of the
destruction of master data is to
A) implement backup and disaster recovery procedures.
B) use an ERP.
C) proper segregation of duties.
D) use of multiple master data files.
A) implement backup and disaster recovery procedures.
B) use an ERP.
C) proper segregation of duties.
D) use of multiple master data files.
If a firm uses an ERP, the best way to mitigate the risk of the destruction of
master data is to
A) frequently update the ERP system.
B) implement the ERP system in three separate instances.
A) frequently update the ERP system.
B) implement the ERP system in three separate instances.
C) periodically audit the ERP system.
D) integrate the ERP system with all IT functions.
B) picking tickets.
C) picking ticket and sales order.
D) sales order and bill of lading.
order?” This message is the result of a
A) reasonableness test.
