Exam (elaborations)

Chapter 12 The Revenue Cycle: Sales to Cash Collections

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Chapter 12 The Revenue Cycle: Sales to Cash

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Chapter 12 The Revenue Cycle: Sales To Cash

Chapter 12 The Revenue Cycle: Sales to Cash Collections Accounting Information Systems 12Th Ed by Marshall B. Romney - Test Bank

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accounting information systems
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Accounting Information Systems, 12e (Romney/Steinbart)
Chapter 12 The Revenue Cycle: Sales to Cash Collections

1) In organizations with at least basic segregation of duties, the credit manager reports to the ________
and the treasurer reports to the ________.
A) controller; vice president of finance
B) treasurer; controller
C) marketing manager; vice president of finance
D) treasurer; vice president of finance
Answer: D
Page Ref: 331
Objective: Learning Objective 1
Difficulty : Moderate
AACSB: Analytic

2) In the revenue cycle, before a shipping notice is prepared, the shipping department personnel should
match the inventory received from the warehouse to details from
A) picking tickets.
B) sales order and bill of lading.
C) sales order.
D) picking ticket and sales order.
Answer: D
Page Ref: 345
Objective: Learning Objective 3
Difficulty : Moderate
AACSB: Analytic

3) Which is the best control to prevent invoicing customers for the quantity ordered, which was more
than the quantity shipped due to items on backorder?
A) Use the information from the packing slip to prepare the sales invoice.
B) Use the information from the picking ticket to prepare the sales invoice.
C) Use the information from the bill of lading to prepare the sales invoice.
D) Use the information from the sales order to prepare the sales invoice.
Answer: A
Page Ref: 350
Objective: Learning Objective 3
Difficulty : Easy
AACSB: Reflective Thinking

1
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

,4) The cashier deposits checks in the bank for Very Large Corporation (VLC) and also prepares
payments to vendors. Of the following, who is best to reconcile the bank statement to VLC's records on
a regular basis?
A) Internal audit department
B) Treasurer
C) External auditor
D) Cashier
Answer: A
Page Ref: 355
Objective: Learning Objective 3
Difficulty : Moderate
AACSB: Analytic

5) Which of the following documents normally triggers the billing process in the revenue cycle?
A) Packing slip received from the shipping department
B) Sales order received from the sales department
C) Picking ticket received from the sales department
D) Journal voucher received from the shipping department
Answer: A
Page Ref: 348
Objective: Learning Objective 1
Difficulty : Easy
AACSB: Analytic

6) Which of the following documents would normally trigger the process to record a customer payment?
A) Remittance advice
B) Customer monthly statement
C) Deposit slip
D) Sales invoice
Answer: A
Page Ref: 353
Objective: Learning Objective 1
Difficulty : Easy
AACSB: Analytic

7) Which document should always be included with a merchandise shipment to a customer?
A) Packing slip
B) Picking ticket
C) Remittance advice
D) Sales invoice
Answer: A
Page Ref: 345
Objective: Learning Objective 1
Difficulty : Easy
AACSB: Analytic

2
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

, 8) A monthly statement sent to customers serves a control purpose by
A) providing an opportunity for customers to verify the balance owed and activity on the account.
B) triggering the process to record a customer payment.
C) summarizing invoices and amounts due for customers.
D) reminding customers of the balance due and due date.
Answer: A
Page Ref: 355
Objective: Learning Objective 3
Difficulty : Moderate
AACSB: Reflective Thinking

9) Accounting recognizes a sale when
A) inventory becomes the legal property of the customer.
B) cash is received from the customer.
C) a sales order is approved by sales, inventory control, and credit departments.
D) inventory is removed from the warehouse.
Answer: A
Page Ref: 345
Objective: Learning Objective 1
Difficulty : Moderate
AACSB: Analytic

10) Which of the following is not one of the controls for the mail room where customer payments are
commingled with other mail?
A) Requiring the controller to be personally present when mail is received and opened
B) Preparing a remittance list as mail is opened
C) Restrictively endorsing checks when received
D) Requiring two mail room clerks to open mail together
Answer: A
Page Ref: 337
Objective: Learning Objective 3
Difficulty : Easy
AACSB: Analytic

11) What is the primary objective of the revenue cycle?
A) to maximize revenue and minimize expense
B) to reduce outstanding accounts receivable balances through increased cash sales
C) to provide the right product in the right place at the right time at the right price
D) to sell as much product as possible and/or to maximize service billings
Answer: C
Page Ref: 332
Objective: Learning Objective 1
Difficulty : Easy
AACSB: Analytic

3
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

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Exam (elaborations)

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