Final Exam Chapter 8

Question 1

is a recurring set of business activities and related information processing operations associated with providing goods and services to customers and collecting their cash payments

Answer 1

revenue cycle

Question 2

what should be don if there is inaccurate or invalid master data

Answer 2

employ data processint integrity controls
restrict acces to master data
review all changes to master data

Question 3

what should be done if there is unauthorized disclosure of sensitive data

Answer 3

physical and logical access controls

encrypt data

Question 4

what should be done if there is loss or destruction of data

Answer 4

back up data

implement disaster recovery plan

Question 5

what should be done if there is poor performance issues

Answer 5

use managerial reports to evaluate company and individual performance

Question 6

take order approve credit check inventory availability respond to customer inquires

Answer 6

sales order entry

Question 7

pick and pack goods and ship them

Answer 7

shipping

Question 8

invoice customer and update accounts receivable

Answer 8

billing

Question 9

receive payments deposit funds and update accounts receivable

Answer 9

cash collection

Question 10

what are the 4 parts of the revenue cycle

Answer 10

sales order entry, shipping, billing, cash collection

Question 11

what do you do if there is an incomplete or inaccurate customer orders

Answer 11

completeness checks
field checks
close loop verification
validity checks
reasonableness checks

Question 12

what do you do if there is invalid orders

Answer 12

require signed purchase orders from customers for paper based orders or use digital signatures

Question 13

what do you do if there is uncollectible accounts

Answer 13

approve sales on credit for each customer
set credit limits
require specific authorization for approve sales over the customers limit
monitor customers balances with regular accounts receivable aging reports

Question 14

what do you do if there is stockouts or excess inventory

Answer 14

maintain accurate inventory records
use the perpetual inventory method
use barcodes or RFID tags
train employees about inventory control procedures
conduct periodic physical counts of inventory
develop accurate sales forecasting models

Question 15

what do you do if you are loosing customers

Answer 15

use CRM systems
establish a chat feature, FAQ page, and access to secure customer account information of the company’s website
evaluate customer service ratings

Question 16

what do you do if you are picking the wrong items or the wrong quantity

Answer 16

use bar codes and RFID tags

reconcile picking tickets to sales order details

Question 17

what can you do if you are having problems with theft of inventory

Answer 17

restrict physical access
document all inventory transfers
use bar code and RFID technology
conduct periodic physical counts of inventory and reconcile to recorded quantities

Question 18

What do you do if you are having shipping errors

Answer 18

reconcile sales orders picking tickets packing slips and bills of lading
use RFID systems to identify delays
enter data using bar code scanners and RFID
empty data entry edit controls (field checks, validity check, completeness check etc.)
configure computerized and paper based systems to prevent duplicate shipments

Question 19

what do you do if you are having problems sending bills to customers

Answer 19

separate billing and shipping departments
compare sales orders, picking tickets, and shipping documents with sales invoices to identify any shipments that have not been invoiced

Question 20

what do you do if you are having problems with billing errors

Answer 20

configure system to enter pricing data automatically
restrict access to pricing master data
employ data entry edit controls
reconcile shipping documents to sales orders

Question 21

what do you do if you are having errors in posting to accounts receivable

Answer 21

use data entry controls
reconcile batch totals
mail monthly statements to customers
reconcile subsidiary accounts to the general ledger

Question 22

what do you do if you are having inaccurate or invalid credit memos

Answer 22

segregate credit memo authorization function from both the sales order entry and customer account maintenance functions
configure the system to block credit memos unless there is either corresponding documentation of return of goods or specific authorization by management

Question 23

what do you do if you are having a theft of cash

Answer 23

separate the cash handling function from the accounts receivable and credit function
regularly reconcile the bank account with recorded amounts using someone independent of the cash collections procedures
mail room controls - cameras, multiple people in the room
use cash registers
deposit cash daily

Question 24

what do you do if you are having cash flow problems

Answer 24

use lockbox arrangements, EFT, or credit credit cards
allow discounts for prompt payment by customers
prepare cash flow budgets