Revenue and Receipts Cycle Flashcards

1
Q

What is the revenue cycle?

A

The exchange of goods or services for payment

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2
Q

What are the 2 phases of the revenue cycle?

A
  1. Physical phase
  2. Financial phase
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3
Q

How is the revenue process generated?

A

Either by selling a product or rendering a service.

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4
Q

What is the most important inherent risk in revenue transactions?

A

The timing of revenue recognition

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5
Q

What are the relevant assertions in the receipts cycle?

A

existence
completeness
accuracy
cut-off
presentation and disclosure

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6
Q

What is kiting?

A

Transferring money from one account to another to cover up a shortage

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7
Q

What is lapping?

A

concealing theft by stealing from somewhere else to make up the shortage

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