Invoice and Revenue Cycle

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Chap 10 Revenue Cycle ANGEL AVAKIAN | Started: May 5, 2012 11:45 AM | Questions: 35 | | |

1. ais11r 10-2 (Points: 1) | | The revenue cycle is a recurring set of business activities and related information processing operations associated with providing goods and services to customers and collecting cash in payment for those sales. With whom is the primary external exchange of information?

a. competitors

b. customers

c. marketing organizations

d. creditors

| | Save Answer | | 2. ais11r 10-15 (Points: 1) | | The maximum allowable account balance for a given customer is called the

a. credit limit.

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| | Save Answer | | 12. ais11r 10-76 (Points: 1) | | Which of the following poses an internal control problem?

a. Disbursements of cash are approved by the Finance Manager.

b. Credit memos are approved by the Sales Manager.

c. Bank accounts are reconciled by the Finance Department.

d. Raw material deliveries are compared with the relevant purchase orders clerks in the Shipping and Receiving Department.

| | Save Answer | | 13. ais11r 10-46 (Points: 1) | | It has been discovered that credit sales have been made to customers with a poor credit rating. If this activity continues, the company may face uncollectible sales and losses due to bad debts. What applicable control procedure may help the company to gain control over this situation?

a. data entry application controls

b. separation of shipping and billing duties

c. price lists

d. credit approval by a credit manager and not marketing personnel

| | Save Answer | | 14. ais11r 10-18 (Points: 1) | | Mucho Regalia manufactures clothing items. When an inventory item that is not in stock has been ordered by a customer, a back order is sent to the

a. purchasing department.

b. billing department.

c. production department.

d. A and B above

| | Save Answer | | 15. ais11r 10-74 (Points: 1) | | Using the ________ method, customers typically pay a sales invoice that reflects a single

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