Question 1

In the revenue cycle,the internal control "limit access" applies to physical assets only.

Accepted Answer

A) True 
 B)False  False

Question 2

The stock release document is prepared by the shipping department to provide evidence that the goods have been released to the customer.

Accepted Answer

A) True 
 B)False  False

Question 3

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 should be checked before shipping the items; invoices are mailed before the goods are shipped; shipping has access to the warehouse; record keeping duties are not segregated (general ledger from subsidiary ledger); only one person opens the mail; sales return forms are not authorized by management; custody and record keeping duties are not separated; the cashier has custody of cash,makes journal entries,and maintains A/R ledger; Cashier has custody of cash and handles customer complaints (e.g.,about unrecorded payments).

Question 4

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

Accepted Answer

A)  sales invoice 
B)  stock release form 
C)  packing slip 
D)  shipping notice 
A)  sales invoice 
B)  stock release form 
C)  packing slip 
D)  shipping notice

Question 5

Distinguish between a packing slip,shipping notice,and a bill of lading.

Accepted Answer

The packing slip travels with the goods

Question 6

What does EDI technology do?

Accepted Answer

EDI technology was devised to

Question 7

With regard to segregation of duties,rule one is that transaction authorization and transaction processing should be separated.What does this require in the revenue cycle?

Accepted Answer

Within the revenue cycle,the credit depa

Question 8

The credit department

Accepted Answer

A)  prepares credit memos when goods are returned 
B)  approves credits to accounts receivable when payments are received 
C)  authorizes the granting of credit to customers 
D)  none of the above 
A)  prepares credit memos when goods are returned 
B)  approves credits to accounts receivable when payments are received 
C)  authorizes the granting of credit to customers 
D)  none of the above

Question 9

An advantage of real-time processing of sales is

Accepted Answer

A)  the cash cycle is lengthened 
B)  current inventory information is available 
C)  hard copy documents provide a permanent record of the transaction 
D)  data entry errors are corrected at the end of each batch 
A)  the cash cycle is lengthened 
B)  current inventory information is available 
C)  hard copy documents provide a permanent record of the transaction 
D)  data entry errors are corrected at the end of each batch

Question 10

What is a bill of lading?

Accepted Answer

The bill of lading is a formal contract

Question 11

A remittance advice is

Accepted Answer

A)  used to increase (debit)an account receivable by the cash received 
B)  is a turn-around document 
C)  is retained by the customer to show proof of payment 
D)  none of the above 
A)  used to increase (debit)an account receivable by the cash received 
B)  is a turn-around document 
C)  is retained by the customer to show proof of payment 
D)  none of the above

Question 12

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

Accepted Answer

supervision (two peo

Question 13

Give three examples of Access Control in a Point-of-Sale (POS)system.

Accepted Answer

- Lock on the cash drawer 
- Internal ca

Question 14

Which document is NOT prepared by the sales department?

Accepted Answer

A)  packing slip 
B)  shipping notice 
C)  bill of lading 
D)  stock release 
A)  packing slip 
B)  shipping notice 
C)  bill of lading 
D)  stock release

Question 15

What unique control problems does EDI pose?

Accepted Answer

EDI poses unique control problems for or

Question 16

Periodically,the general ledger department receives all of the following except

Accepted Answer

A)  total increases to accounts receivable 
B)  total of all sales backorders 
C)  total of all sales 
D)  total decreases in inventory 
A)  total increases to accounts receivable 
B)  total of all sales backorders 
C)  total of all sales 
D)  total decreases in inventory

Question 17

What is multilevel security?

Accepted Answer

Multilevel security employs programmed t

Question 18

Application integrity is achieved through the systems development and program change processes.

Accepted Answer

A) True 
 B)False

Question 19

The purpose of the invoice is to bill the customer.

Accepted Answer

A) True 
 B)False

Question 20

A weekly reconciliation of cash receipts would include comparing

Accepted Answer

A)  the cash prelist with bank deposit slips 
B)  the cash prelist with remittance advices 
C)  bank deposit slips with remittance advices 
D)  journal vouchers from accounts receivable and general ledger 
A)  the cash prelist with bank deposit slips 
B)  the cash prelist with remittance advices 
C)  bank deposit slips with remittance advices 
D)  journal vouchers from accounts receivable and general ledger

In the revenue cycle,the internal control "limit access" applies to physical assets only.

The stock release document is prepared by the shipping department to provide evidence that the goods have been released to the customer.

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

Distinguish between a packing slip,shipping notice,and a bill of lading.

What does EDI technology do?

With regard to segregation of duties,rule one is that transaction authorization and transaction processing should be separated.What does this require in the revenue cycle?

The credit department

An advantage of real-time processing of sales is

What is a bill of lading?

A remittance advice 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.

Give three examples of Access Control in a Point-of-Sale (POS)system.

Which document is NOT prepared by the sales department?

What unique control problems does EDI pose?

Periodically,the general ledger department receives all of the following except

What is multilevel security?

Application integrity is achieved through the systems development and program change processes.

The purpose of the invoice is to bill the customer.

A weekly reconciliation of cash receipts would include comparing

The Information System: an Accountants 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 Part I: Sarbanes-Oxley and It Governance

IT Controls Part II: Security and Access

IT Controls Part III: Systems Development, program Changes, and Application Controls

Filters

Exam 4: The Revenue Cycle

In the revenue cycle,the internal control "limit access" applies to physical assets only.

The stock release document is prepared by the shipping department to provide evidence that the goods have been released to the customer.

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

Distinguish between a packing slip,shipping notice,and a bill of lading.

What does EDI technology do?

With regard to segregation of duties,rule one is that transaction authorization and transaction processing should be separated.What does this require in the revenue cycle?

The credit department

An advantage of real-time processing of sales is

What is a bill of lading?

A remittance advice 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.

Give three examples of Access Control in a Point-of-Sale (POS)system.

Which document is NOT prepared by the sales department?

What unique control problems does EDI pose?

Periodically,the general ledger department receives all of the following except

What is multilevel security?

Application integrity is achieved through the systems development and program change processes.

The purpose of the invoice is to bill the customer.

A weekly reconciliation of cash receipts would include comparing

The Information System: an Accountants 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 Part I: Sarbanes-Oxley and It Governance

IT Controls Part II: Security and Access

IT Controls Part III: Systems Development, program Changes, and Application Controls

Filters