Module 2

Question 1

Define Revenue Cycle

Answer 1

The recurring set of business activities and data processing operations associated with providing goods and services, to customers and collecting cash in payments for these sales.

Question 2

Primary Objective of Revenue Cycle

Answer 2

Is to provide the right product, in the right place, at the right time for the right price.

Question 3

4 Basic Revenue Cycle Activities

Answer 3

Sales order entry
Shipping
Billing
Cash collections

Question 4

Revenue Cycle Information System

Answer 4

Placing orders
System validates
Enter Data 
Invoicing
Banking

Question 5

Define Expenditure Cycle

Answer 5

Is a recurring set of business activities and related information processing operations associated with the purchase and payment for goods and services.

Question 6

Primary Objective of Expenditure Cycle

Answer 6

Minimize the total cost of acquiring and maintaining inventories, supplies and the various services the organisation needs to function.

Question 7

4 Basic Steps of Expenditure Cycle

Answer 7

Ordering materials, supplies and services
Receiving materials, supplies and services
Approving supplier invoices
Cash disbursements

Question 8

Expenditure Cycle Information System

Answer 8

When a department submits a request to purchase items the system creates a purchase order. The receiving department, accounts payable and the department that requested the purchase of materials is then notified. When a shipment arrives, the receiving-dock workers use the inquiry processing system to verify the order then enter quantity and items received. Depending on the supplier the system has either scheduled a payment or accounts payable has to enter the invoice and check it against the purchase order. Most systems use batch payments. Open-invoice systems remove the invoice once its been paid. Remittance is sent.