Which of the following is not a threat to the revenue cycle shipping process?

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Chapter 12

Study Guide

Multiple Choice

This activity contains 12 questions.

	The credit approval process involves which of the following?   Establishing a credit limit Investigating the credit history of the customer Verifying the customer order does not exceed an authorized limit All of the above.

	The billing cycle includes the following:   invoicing. shipping. updating accounts receivable. Making bank deposits. Answers 1 and 3.

	The open invoice method involves which of the following activities?   customers pay from a balance on a monthly statement. remittances are applied against a total account balance. customers are required to remit a tear-away stub. customers pay specific invoices. None of the above.

	A credit memo   is issued by the customer. is issued by the cashier. is issued by the credit manager. increases accounts receivable.

	An electronic lockbox has which of the following functions?   Safeguards cash Improves cash management Minimizes the time customer checks are in the mail All of the above.

	Which of the following provide useful information for evaluating current credit policies and for deciding whether to increase the credit limit for specific customers?   Cash budget Profitability analysis reports Sales analysis reports Accounts receivable aging schedule None of the above.

	Which of the following is a threat to the Sales Order Entry activity of the Revenue Cycle?   Uncollectible accounts. Failure to bill. Billing errors. Theft of inventory.

	Which of the following is NOT a control for mitigating the risk of posting errors in accounts receivable?   Data entry controls. Set proper credit limits. Reconciliation of batch totals. Mailing monthly statements to customers.

	If the information is inaccurate or incomplete on a sales order   inefficiencies are created in the processing of the sales order. negatively affect customer perceptions. Both answers 1 and 2 are correct. None of the above is correct.

	Which of the following is NOT a threat associated with billing and accounts receivable?   Failure to bill customers An error in billing Posting errors in updating accounts receivable Theft of cash

	Steps to reduce the risk of inventory theft include:   inventory is kept in a secure location, with limited physical access. all inventory transfers within the company are documented. inventory is released only upon approved sales orders. All of the above.

	The control known as closed loop verification is associated with:   accuracy of updating customer accounts. preventing the theft of cash. encryption controls. separation of billing and shipping functions.

Which of the following is a threat to the revenue cycle sales order entry process?

Which of the following are not directly involved in the revenue cycle?

What is the primary objective of the revenue cycle?

Which of the following controls can minimize the threat of failure to bill quizlet?