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Revenue Cycle Processes

34 Questions  I  By Kosdaisy
Business Quizzes & Trivia
Multiple choice questions about revenue cycle processes as they relate to accounting information systems. Based on the text Accounting Information Systems by Bodnar.

  
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Question Excerpt

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1.  Which of the following documents is used to post sales on account to customers in the accounts receivables ledger?
A.
B.
C.
D.
2.  Which of the following departments should match shipping documents with open sales orders and prepare daily sales summaries?
A.
B.
C.
D.
3.  The invoice is completed when (______).
A.
B.
C.
D.
4.  The billing function normally should report to which of the following?
A.
B.
C.
D.
5.  Which of the following departments normally should be responsible for the preparation and journalizing of credit memos on the receipt of approved sales return memos to authorize a reduction in customer account balances of returned goods?
A.
B.
C.
D.
6.  Which of the following steps in the sales business process is optional
A.
B.
C.
D.
7.  Pricing usually occurs during which step in the sales business process?
A.
B.
C.
D.
8.  What has to exist before a sales order can be created in SAP ERP?
A.
B.
C.
D.
9.  The remittance list prepared in the mailroom to document receipts should be forwarded directly to (_______).
A.
B.
C.
D.
10.  The remittances received in the mailroom should be forwarded directly to (___________).
A.
B.
C.
D.
11.  The internal auditor is reviewing shipping procedures of a manufacturing company. The auditor should be greatly concerned when
A.
B.
C.
D.
E.
12.  Which of the following is an effective internal accounting control over accounts receivable?
A.
B.
C.
D.
13.  Which of the following would be the best protection for a company that wishes to prevent the lapping of trade accounts receivable?
A.
B.
C.
D.
14.  To determine whether the system of internal accounting control operated effectively to minimize errors of failure to invoice a shipment, the auditor would select a sample of transactions from the population represented by the
A.
B.
C.
D.
15.  For effective internal accounting control, employees maintaining the accounts receivable subsidiary ledger should not also approve
A.
B.
C.
D.
16.  Which of the following control procedures may prevent the failure to bill customers for some shipments?
A.
B.
C.
D.
17.  To achieve good internal accounting control, which department should perform the activities of matching shipping documents with sales orders and preparing daily sales summaries?
A.
B.
C.
D.
18.  Shipping documents should be compared with sales records or invoices to
A.
B.
C.
D.
19.  As payments are received, one mailroom employee is assigned the responsibility of prelisting receipts and preparing the deposit slip prior to forwarding the receipts, and remittance advices to accounts receivable for posting. Accounts receivable personnel refoot the deposit slip, stamp a restrictive endorsement on the back of each check, and then forward the receipts and deposit slip to the treasury department. Evaluate the internal control of the described process. Which of the following is a reasonable assessment of internal control in this process?
A.
B.
C.
D.
20.  Which of the following internal control procedures will most likely prevent the concealment of a cash shortage resulting from the improper write-off of a trade account receivable?
A.
B.
C.
D.
21.  For the purpose of proper accounting control, postdated checks remitted by customers should be
A.
B.
C.
D.
22.  A company policy should clearly indicate that defective merchandise returned by customers is to be delivered to the
A.
B.
C.
D.
23.  To conceal defalcations involving receivables, the auditor would expect an experienced bookkepper to charge which of the following accounts?
A.
B.
C.
D.
24.  The most likely result of ineffective internal control policies and procedures in the revenue cycle is that
A.
B.
C.
D.
25.  Proper authorization procedures in the revenue cycle usually provide for the approval of bad-debt write-offs by an employee in which of the following departments
A.
B.
C.
D.
26.  Tracing bills of lading to sales invoices provides evidence that
A.
B.
C.
D.
27.  For good internal control, the billing department should be under the direction of the
A.
B.
C.
D.
28.  Which of the following controls most likely would be effective in offsetting the tendency of sales personnel to maximize sales volume at the expense of high bad-debt write-offs?
A.
B.
C.
D.
29.  Which of the following controls most likely would help ensure that all credit sales transactions of an entity are recorded?
A.
B.
C.
D.
30.  An entity with a large volume of customer remittances by mail most likely could reduce the risk of employee misappropriation of cash by using
A.
B.
C.
D.
31.  Which of the following would the auditor consider to be an incompatible operation if the cashier receives remittances from the mailroom?
A.
B.
C.
D.
32.  The most effective way to prevent an employee from misappropriating cash and then altering the accounting records to conceal the shortage is to
A.
B.
C.
D.
33.  Which of the following in not a universal rule for achieving strong internal control over cash?
A.
B.
C.
D.
34.  Cash receipts from sales on account have been misappropriated. Which of the following acts would conceal this defalcation and be least likely to be detected by an auditor?
A.
B.
C.
D.
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