Question 1

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

Accepted Answer

A)  all sales are profitable 
B)  all sales are recorded 
C)  credit is authorized 
D)  inventory to be shipped is not stolen 
A)  all sales are profitable 
B)  all sales are recorded 
C)  credit is authorized 
D)  inventory to be shipped is not stolen A

Question 2

A credit sale is made to a customer,even though the customer's account is four months overdue.Describe a specific internal control procedure that would prevent this from happening.

Accepted Answer

Perform a credit check and require management approval for all sales to accounts that are overdue.

Question 3

What are the key segregation of duties related to computer programs that process accounting transactions?

Accepted Answer

The tasks of design,maintenance,and operation of computer programs need to be segregated.The programmers who write the original computer programs should not also be responsible for making program changes.Both of these functions must also be separate from the daily task of operating the system.

Question 4

In most large organizations,the journal voucher file has replaced the formal general journal.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)  credit 
B)  accounts payable 
C)  billing 
D)  shipping 
A)  credit 
B)  accounts payable 
C)  billing 
D)  shipping

Question 6

What specific internal control procedure would prevent the shipping clerk from taking goods from the storeroom and sending them to someone who had not placed an order?

Accepted Answer

Shipping clerk shoul

Question 7

The warehouse is responsible for updating the inventory subsidiary ledger.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

The revenue cycle consists of

Accepted Answer

A)  one subsystem-order entry 
B)  two subsystems-sales order processing and cash receipts 
C)  two subsystems-order entry and inventory control 
D)  three subsystems-sales order processing, credit authorization, and cash receipts 
A)  one subsystem-order entry 
B)  two subsystems-sales order processing and cash receipts 
C)  two subsystems-order entry and inventory control 
D)  three subsystems-sales order processing, credit authorization, and cash receipts

Question 10

The customer open order file is used to

Accepted Answer

A)  respond to customer queries 
B)  fill the customer order 
C)  ship the customer order 
D)  authorize customer credit 
A)  respond to customer queries 
B)  fill the customer order 
C)  ship the customer order 
D)  authorize customer credit

Question 11

Copies of the sales order can be used for all of the following except

Accepted Answer

A)  purchase order 
B)  credit authorization 
C)  shipping notice 
D)  packing slip 
A)  purchase order 
B)  credit authorization 
C)  shipping notice 
D)  packing slip

Question 12

What is the objective of re-engineering?

Accepted Answer

The objective of re-engineerin

Question 13

When Clipper Mail Order Co.receives telephone and fax orders,the billing department prepares an invoice.The invoice is mailed immediately.A copy of the invoice serves as a shipping notice.The shipping department removes inventory from the warehouse and prepares the shipment.When the order is complete,the goods are shipped.The clerk checks the customer's credit before recording the sale in the general journal and the account receivable subsidiary ledger.
The receptionist opens the mail and lists all payments.The receptionist also handles all customer complaints and prepares sales return forms for defective merchandise.The cashier records all cash receipts in the general journal and makes the appropriate entry in the accounts receivable subsidiary ledger.The cashier prepares the daily bank deposit.
Describe at least four internal control weaknesses at Clipper Mail Order Co.

Accepted Answer

no sales order is prepared;
credit shoul

Question 14

At which point is supervision most critical in the cash receipts system?

Accepted Answer

A)  accounts receivable 
B)  general ledger 
C)  mail room 
D)  cash receipts 
A)  accounts receivable 
B)  general ledger 
C)  mail room 
D)  cash receipts

Question 15

Which department prepares the bill of lading?

Accepted Answer

A)  sales 
B)  warehouse 
C)  shipping 
D)  credit 
A)  sales 
B)  warehouse 
C)  shipping 
D)  credit

Question 16

A customer payment of $247 was correctly posted in the general ledger but was recorded as $274 in the customer's account receivable.Describe a specific internal control procedure that would detect this error.

Accepted Answer

Reconcile the accounts receiva

Question 17

What is a bill of lading?

Accepted Answer

The bill of lading is a formal contract

Question 18

The cash receipts journal is a special journal.

Accepted Answer

A) True 
 B)False

Question 19

Sales orders should be prenumbered documents.

Accepted Answer

A) True 
 B)False

Question 20

What makes point-of-sale systems different from revenue cycles of manufacturing firms?

Accepted Answer

In point-of-sale systems,the customer li

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

A credit sale is made to a customer,even though the customer's account is four months overdue.Describe a specific internal control procedure that would prevent this from happening.

What are the key segregation of duties related to computer programs that process accounting transactions?

In most large organizations,the journal voucher file has replaced the formal general journal.

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

What specific internal control procedure would prevent the shipping clerk from taking goods from the storeroom and sending them to someone who had not placed an order?

The warehouse is responsible for updating the inventory subsidiary ledger.

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

The revenue cycle consists of

The customer open order file is used to

Copies of the sales order can be used for all of the following except

What is the objective of re-engineering?

At which point is supervision most critical in the cash receipts system?

Which department prepares the bill of lading?

A customer payment of $247 was correctly posted in the general ledger but was recorded as $274 in the customer's account receivable.Describe a specific internal control procedure that would detect this error.

What is a bill of lading?

The cash receipts journal is a special journal.

Sales orders should be prenumbered documents.

What makes point-of-sale systems different from revenue cycles of manufacturing firms?

The Information System: An Accountant’s Perspective

Introduction to Transaction Processing

Ethics, Fraud, and Internal Control

The Expenditure Cycle Part I: Purchases and Cash Disbursements Procedures

The Expenditure Cycle Part II: Payroll Processing and Fixed Asset Procedures

The Conversion Cycle

General Ledger, Financial Reporting, and Management Reporting Systems

Database Management Systems

The REA Approach to Business Process Modeling

Enterprise Resource Planning Systems

Electronic Commerce Systems

Managing the Systems Development Life Cycle

Construct, Deliver, and Maintain Systems Projects

IT Controls : Sarbanes-Oxley and IT Governance

IT Controls : Security and Access

IT Controls : Systems Development Program Changes and Application Controls

Filters

Exam 4: The Revenue Cycle

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

A credit sale is made to a customer,even though the customer's account is four months overdue.Describe a specific internal control procedure that would prevent this from happening.

What are the key segregation of duties related to computer programs that process accounting transactions?

In most large organizations,the journal voucher file has replaced the formal general journal.

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

What specific internal control procedure would prevent the shipping clerk from taking goods from the storeroom and sending them to someone who had not placed an order?

The warehouse is responsible for updating the inventory subsidiary ledger.

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

The revenue cycle consists of

The customer open order file is used to

Copies of the sales order can be used for all of the following except

What is the objective of re-engineering?

At which point is supervision most critical in the cash receipts system?

Which department prepares the bill of lading?

A customer payment of $247 was correctly posted in the general ledger but was recorded as $274 in the customer's account receivable.Describe a specific internal control procedure that would detect this error.

What is a bill of lading?

The cash receipts journal is a special journal.

Sales orders should be prenumbered documents.

What makes point-of-sale systems different from revenue cycles of manufacturing firms?

The Information System: An Accountant’s Perspective

Introduction to Transaction Processing

Ethics, Fraud, and Internal Control

The Expenditure Cycle Part I: Purchases and Cash Disbursements Procedures

The Expenditure Cycle Part II: Payroll Processing and Fixed Asset Procedures

The Conversion Cycle

General Ledger, Financial Reporting, and Management Reporting Systems

Database Management Systems

The REA Approach to Business Process Modeling

Enterprise Resource Planning Systems

Electronic Commerce Systems

Managing the Systems Development Life Cycle

Construct, Deliver, and Maintain Systems Projects

IT Controls : Sarbanes-Oxley and IT Governance

IT Controls : Security and Access

IT Controls : Systems Development Program Changes and Application Controls

Filters