Accounting Information Systems;  Quickbooks 2015: A Complete Course (without Software); Access Card For Intuit Quickbooks 2015 (13th Edition)
Accounting Information Systems; Quickbooks 2015: A Complete Course (without Software); Access Card For Intuit Quickbooks 2015 (13th Edition)
13th Edition
ISBN: 9780134404080
Author: Marshall B. Romney, Paul J. Steinbart
Publisher: PEARSON
Question
Book Icon
Chapter 12, Problem 1CQ
To determine

Identify the correct answer with respect to sales order entry.

Expert Solution & Answer
Check Mark

Answer to Problem 1CQ

Option (c).

Explanation of Solution

Revenue Cycle: A revenue cycle refers to a set of business activities that linked to providing goods or services to their customers and collect cash payment for such sales. The main objective of a revenue cycle is to provide the right product in the right place at the right time for the right price. Following are the stages in revenue cycle:

  1. 1. Sales order entry.
  2. 2. Shipping.
  3. 3. Billing.
  4. 4. Cash collection.

Identify the correct answer with respect to sales order entry.

Justification for correct answer:

Option (c)

Sales order entry is finalized after verification of the customer credit and checking the availability of the required inventory. Therefore, it is the correct answer.

Justification for incorrect answers:

Option (a)

Setting the credit limits of the customers is the function of the credit department and not the process involved in sales order entry. Therefore, it is an incorrect answer.

Option (b)

A bill of lading is a document that contains a detailed list of the ship’s cargo in the form of a receipt. It is given by the master of a ship to the person consigning the goods. Preparing a bill of lading is a part in the overall sales process. Therefore, it is an incorrect answer.

Option (d)

A sales return indicates the return of the merchandize to the seller by the customer. The function of approval with respect to the sale return is done by an individual outside the sales department. Therefore, it is an incorrect answer.

Therefore, the correct answer is Option (c).

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Knowledge Booster
Background pattern image
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education