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ACCT 5410 > Chapter 8 > Flashcards

Chapter 8 Flashcards

1
Q

transaction processing systems

A

recording and processing systems

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2
Q

sales process

A

first a customer places a purchase order(sales order),
prices are determined from the price list, then the sales order is entered into the system
if it is a credit sale then we must check the customers credit to give them a credit limit
if they have sufficient credit then we accept the order
then we check if the items are in stock and prepare a pick list
After the items on the pick list are pulled then we prepare a packing slip and ship the goods,
also we prepare a bill of lading to specify the terms of the shipping agreement
also we include the shipment in the shipping log
Once items are shipped the customer is sent a sales invoice to bill them
also the sale is recorded in the sales journal and Accounts receivable subsidiary is updated

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3
Q

purchase order/sales order

A

starting point in sales process

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4
Q

price list

A

entire set of preestablished and approved prices for each product

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5
Q

credit limit

A

maximum dollar amount that a customer is allowed to carry as an accounts receivable

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6
Q

pick list

A

documents the quantities and descriptions of items ordered

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7
Q

packing slip

A

prepared by warehouse, includes a list of all items included in the shipment

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8
Q

bill of lading

A

specifies the terms of agreement between the company and the carrier are documented in this

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9
Q

shipping log

A

includes a list of all shipments

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10
Q

sales invoice

A

bill sent to customer for goods they purchased

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11
Q

sales journal

A

special journal that records sales transactions

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12
Q

authorization of transactions

A

only certain people should be allowed to set prices

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13
Q

segregation of duties

A

we should separate accounting and sales so as to prevent fraud

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14
Q

adequate records and documents

A

SOX requires we keep adequate records and documents to prevent fraud

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15
Q

security of assets

A

we should safeguard our assets

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16
Q

independent checks and recon

A

we should do check and reconciliations to detect fraud

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17
Q

sales returns processes

A

when customers return goods, returns prepares a receiving log and a receiving report
if goods are accepted then a credit memorandum is prepared
and the A/R subsidiary is updated along with a journal of credit memos

18
Q

receiving log

A

lists the chronological sequence of all returned items

19
Q

receiving report

A

source document completed by receiving dock that documents the quantity and condition of goods received

20
Q

credit memorandum

A

prepared to document the return and to adjust the amount of the customer’s credit status

21
Q

control activities

A 
authorization of transactions
segregation of duties
adequate records and documents
safeguarding of assets
independent checks and reconciliation
22
Q

sales allowance

A

a credit to the customer account made to compensate the customer for a defective product or a late shipment.

23
Q

cash collection processes

A

a check is received and it is matched to the related sales invoice, deposit the funds in a timely manner, and update customer and cash records. Included is the remittance advice to make sure it is coded to the right invoice
a list of all cash receipts is prepared and recorded in the cash receipts journal
also the A/R is updated.
at the end of the month an updated statement of A/R is prepared and sent to the customer

24
Q

remittance advice

A

the documentation accompanying payment that identifies the customer account number and invoice to which the payment applies

25
Q

cash receipts journal

A

records all cash collections

26
Q

e-commerce systems

A

incorporate electronic processing of sales related activities, and generally, e-commerce sales processes are transacted over the internet

27
Q

electronic data interchange

A

systems communicate sales documents electronically with a standard business format

28
Q

point of sale

A

process sales at a cash register in retail stores

29
Q

business process reengineering

A

the purposeful and organized changing of business processes to make the process more efficient

30
Q

Risks of internet sales

A 
security and confidentiality 
   unauthorized access
   hackers or other network break ins
   repudiation of sales transactions
processing integrity
   invalid data entered by customers
   incomplete audit trail
   errors when integrating data into back end systems such as accounting, payment processing, and order fulfillment software systems
availability 
   hardware and software system failures that block customers from access to the website
   virus and worm attacks
   denial of service attacks by hackers
31
Q

header data

A

contain info about the file or transmission being sent

32
Q

trailer data

A

contain data about the file or transmission and identify the end of a particular transaction data set

33
Q

labeling interchanges

A

identify the type of transactions in the set such as a set of sales invoices

34
Q

data segments

A

the actual data within the invoices, such as quantities and prices

35
Q

value added networks

A

provide other valuable services such as translation and encryption of the EDI data and authentication of a valid and authorized trading partner

36
Q

authentication

A

the process of user identification to ensure that only authorized users are accessing the IT system

37
Q

encryption

A

the coding of data that makes data unreadable to those without the encryption key

38
Q

transaction logging

A

occurs when the IT system automatically produces a log of users and the actions they undertake within the IT system

39
Q

control totals

A

subtotals of selected fields for an entire batch of transactions

40
Q

acknowledgment

A

a reply that echoes the data control totals

41
Q

channel stuffing

A

intentionally persuading a customer to buy more than needed, thereby stuffing more product into the sales channel

42
Q

leaving sales open

A

moving a period cut off date forward to include sales that rightly would occur in a future period

ACCT 5410 (22 decks)

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