Module 4 Accounting information systems and control part one

Question 1

What is a purchase requisition?

Answer 1

An internal document raised by the user department to request the financing to purchase goods/services

Question 2

What is a purchase order?

Answer 2

Raised by the purchaser to send to the seller of goods to request purchases of goods or services

Question 3

What is a sales order?

Answer 3

raised by the seller of ordered goods to record the receipt of a purchase order

Question 4

What is a goods despatch note? GDN

Answer 4

Internal form completed by the despatched of ordered goods confirming the goods sent out o the customer

Question 5

What is a goods received note? GRN

Answer 5

internal document completed by the warehouse confirming the specification of the goods received

Question 6

What is an invoice?

Answer 6

A document sent by the seller of goods or services to the buyer detailing the amounts due, discounts available, payment dates and administrative details.

Question 7

What is a remittance advice?

Answer 7

Remittance advice is submitted by the buyer to the seller in association with a payment that details the nature and purpose of the payment

Question 8

What is a credit note?

Answer 8

Sent by a seller to a customer to cancel an invoice charged

Question 9

What are the phases of a typical sales cycle?

Answer 9

Customer places order (sales department)
Order fulfilled and despatched (Warehouse department)
Customer invoiced for goods (Finance department)
Customer pays for goods (Finance department)

Goods returned (may replace phase 4) (Warehouse department) 
Credit note issued/refund given to customer (Finance department)

Question 10

Whare are the phases of a typical purchases cycle?

Answer 10

Place order (Purchase department)
Receive goods (Warehouse department)
Invoice received (Finance department)
Payment for goods (Finance department) 

Return goods (Warehouse department)
Credit note/refund received (Finance department)

Question 11

What is the approach to design and control any accounting information system?

Answer 11

1 - Break the process down into phases
2 - Consider the objectives for that phase
3 - Decide on the relevant documentation for the phase
4 - Consider the “what can go wrongs” (the risk)
5 - Design controls to address these “what can go wrongs”