Chapter 14 Flashcards
1
Q
five classes of transactions
A
Sales Cash Receipts Sales returns and allowances Write off of uncollectible accounts Estimate of bad debt expense
2
Q
sales and collection cycle
A
involves the decisions and processes to transfer ownership of goods to customers
3
Q
eight business functions for sales and collections cycle
A
processing customer orders granting credit shipping goods billing customers and recording sales processing and recording cash receipts processing and recording sales and returns and allowances writing off uncollectible account receivable providing for bad debts
4
Q
internal controls
A
separation of duties proper authorization adequate documents and records prenumbered documents monthly statements internal verification procedures
5
Q
design format audit program to a performance audit program
A
procedures are combined
6
Q
proof of cash receipts
A
tests whether all recorded cash receipts have been deposited in the bank account
7
Q
lapping of accounts receivable
A
the postponement of entries for the collection of receivable to conceal an existing cash shortage
