PART 2 - REVENUE

Question 1

It is the direct exchange of finished goods or services for cash in a single transaction between a seller and a buyer.

Answer 1

Revenue Cycle

Question 2

2 Major Sub-systems of Revenue Cycle: SC

Answer 2

● Sales order processing subsystem
● Cash receipts subsystem

Question 3

2 Main Section of Revenue cycle: CP

Answer 3

● Conceptual Revenue Cycle System
● Physical System

Question 4

Is the overview of movement of accounting information through organization. It also reviews the
internal control issues

Answer 4

The Conceptual System

Question 5

Three processes that constitute the revenue cycle: SSC

Answer 5

1. Sales order procedures
2. Sales return procedures
3. Cash receipts procedures

Question 6

_____ - involved receiving and processing a customer order, filling the order and shipping products to the customer at the proper time, and correctly accounting for the transaction. Examples: RCPSB

Answer 6

Sales order procedure
- Receive order
- Check credit
- Pick goods
- Ship goods
- Bill’s customer

Question 7

_____ - An organization can expect that a certain percentage of its sales will be returned.

—-This occurs for a number of reasons, some of which may be:
- Shipped wrong merchandise
- Goods were defective
- Product was damaged in shipment
- Buyer refused delivery because the seller shipped the goods too late or they were delayed in transit.

Answer 7

Sales Return

Question 8

• involve receiving and securing the cash; depositing the cash in bank; matching the payment with the customer and adjusting the correct accounts; and properly accounting for and reconciling the financial details of the transaction.

ORUUR

Answer 8

Cash Receipts Procedure

• Open mail and prepare remittance advice
• Record and deposit checks
• Update Accounts Receivable
• Update general ledger
• Reconcile cash receipts and deposits

Question 9

these are internal control activities that will guide us in designing and evaluating transaction processing controls.

Answer 9

Revenue Cycle Controls

Question 10

Begins with a review of manual procedures and then moves to deal with several forms of compute-based systems.

Answer 10

The Physical System

Question 11

the purpose of this section is to support the system concepts presented in the previous section with models depicting people, organizational units, and physical documents and files.

Answer 11

Manual Systems

Question 12

4 Sales Order Processing: SCTB

Answer 12

1. Sales Department
2. Credit Department Approval
3. The Shipping Department
4. Billing Department

Question 13

3 Sales Return Procedures: RSP

Answer 13

Receiving Department
Sales Department
Processing the Credit Memo

Question 14

5 Cash Receipt Procedure: MCAGC

Answer 14

Mail Room
Cash Receipt
Accounts Receivable
General Ledger
Controller’s Office

Question 15

We can view technological innovation in AIS as a continuum with automation at one end and
reengineering at the other.

Automation involves using technology to improve the efficiency andeffectiveness of a task. Reengineering on the other hand, involves radically rethinking the business process and workflow.

Answer 15

Computer Based Systems

Question 16

4 Automating Sales Order Processing with Batch Technology: SCWS

Answer 16

Sales Department
Credit Department Approval
Warehouse Procedure
Shipping Department

Question 17

It begins with the arrival of batches of shipping notice. ____ clerk converts the hard copy of shipping notice to digital form to produce a transaction file of sales order.

The resulting transaction file will thus contain many separate batches of records. For each batch stored on the file, the batch control totals are automatically calculated

Answer 17

Keystroke

Question 18

The edit program first validates all transaction records in the batch by performing clerical and logical tests on the data. After validating, it recalculates the batch control totals to reflect anychanges due to removal of error records. The edited sales order file is then passed to the file update run.

Answer 18

Edit Run

Question 19

This system generates a number of management reports, including sales summaries, inventory status reports, transaction listings, journal voucher listings, and budget and
performance reports.

Answer 19

Update Procedure

Question 20

3 Reengineering Sales Order Processing with Real-Time Technology: SWS

Answer 20

Sales Procedure
Warehouse Procedure
Shipping Department

Question 21

It is a batch update program searches the open sales files for records marked closes and updates the following general ledger accounts: ISAC

Answer 21

General Ledger Update Procedure
● Inventory-control,
● Sales,
● AR-control,
● Cost of Goods Sold.

Question 22

4 Automated Cash-Receipt Procedure: MCAD

Answer 22

1. Mail Room
2. Cash Receipts Department
3. AR Department
4. Data Processing Department

Question 23

_________ are used extensively in grocery stores, department stores, and other types of retail organization. The organization doesn’t maintain customer AR

Answer 23

Point-of-sale (POS) Systems -