CHAPTER 4

Question 1

include the tasks involved in receiving and processing a customer order, filling the order and shipping products to the customer, billing the customer at the proper time, and correctly
accounting for the transaction.

Answer 1

Sales order procedures

Question 2

The sales process begins with the receipt of a _____ indicating the type and
quantity of merchandise desired.

Answer 2

customer order

Question 3

captures vital information such as the customer’s name, address, and account number; the name, number, and description of the items sold; and the quantities and unit prices of each item sold.

Answer 3

sales order

Question 4

is not in a standard format and may or
may not be a physical document.

Answer 4

customer order

Question 5

identifies the items of inventory that must be located and picked from the warehouse shelves

Answer 5

stock release document

Question 6

Before the arrival of the goods and the verified stock release document, the shipping department receives the _____ and ______ from the receive order function

Answer 6

packing slip and shipping notice

Question 7

ultimately travel with the goods to the customer to describe the contents of the order

Answer 7

packing slip

Question 8

forwarded to the billing function as evidence that the customer’s order was filled and shipped

Answer 8

shipping notice

Question 9

a formal contract between the seller and the shipping company (carrier) to transport the goods to the customer.

Answer 9

bill of lading

Question 10

is the customer’s bill, which formally depicts the charges to the customer

Answer 10

sales invoice

Question 11

is a special journal used for recording completed sales transactions

Answer 11

sales journal

Question 12

represents a general journal entry and
indicates the general ledger accounts affected.

Answer 12

a journal voucher

Question 13

When items are returned, the receiving department employee counts, inspects, and prepares a _____ describing the items.

Answer 13

return slip

Question 14

the authorization for the customer to receive credit for the merchandise returned

Answer 14

credit memo

Question 15

contain information needed to service individual customers’ accounts. This includes payment date, account number, amount paid, and customer check number.

Answer 15

remittance advices

Question 16

a form where all cash received is logged

Answer 16

remittance list

Question 17

All cash receipts transactions, including cash sales, miscellaneous cash receipts, and cash received on account, are recorded in the

Answer 17

cash receipts journal

Question 18

are sequentially numbered by the printer and allow every transaction to be identified uniquely

Answer 18

Prenumbered documents

Question 19

shows the status of customer orders

Answer 19

Open sales order file

Question 20

specifies orders shipped during the period

Answer 20

shipping log

Question 21

provides customer credit data

Answer 21

credit records file

Question 22

contains open orders not yet shipped or billed

Answer 22

sales order pending file

Question 23

contains customer orders for out-of-stock items

Answer 23

Back-order file

Question 24

is a compilation of all journal vouchers posted to the general ledger

Answer 24

journal voucher file

Question 25

what are the two subsidiary ledgers used for capturing transaction event details in the revenue cycle

Answer 25

Inventory
AR subsidiary ledgers

Question 26

are the basis for financial statement preparation.

Answer 26

general ledger control accounts

Question 27

prevent and detect unauthorized and illegal access to the firm’s assets

Answer 27

access controls

Question 28

to verify the accuracy and completeness of tasks that other functions in the process perform.

Answer 28

independent verification

Question 29

are a fundamental component of the framework for viewing technology innovations.

Answer 29

manual systems

Question 30

involves using technology to improve the efficiency and effectiveness of a task

Answer 30

Automation

Question 31

involves radically rethinking the business process and the work flow

Answer 31

Reengineering

Question 32

are used extensively in grocery stores, department stores, and other types of retail organizations

Answer 32

Point of Sales (POS) systems

Question 33

was devised to expedite routine transactions between manufacturers and wholesalers and between wholesalers and retailers.

Answer 33

electronic data interchange (EDI)

Question 34

are the basis for financial reporting and many internal decisions

Answer 34

digital journals and master files