3Q Transaction Processing

The bill of lading is a legal contract between the buyer and the seller.

• True

• False

The purpose of the invoice is to bill the customer.

• True

• False

The revenue cycle consists of

• one subsystem–order entry

• two subsystems–sales order processing and cash receipts

• two subsystems–order entry and inventory control

• three subsystems–sales order processing, credit authorization, and cash receipts

Which document triggers the revenue cycle?

• the sales order

• the customer purchase order

• the sales invoice

• the journal voucher

At which point is supervision most critical in the cash receipts system?

• accounts receivable

• general ledger

• mail room

• cash receipts

Which of following functions should be segregated?

• opening the mail and making the journal entry to record cash receipts

• authorizing credit and determining reorder quantities

• maintaining the subsidiary ledgers and handling customer queries

• providing information on inventory levels and reconciling the bank statement

Purchasing decisions are authorized by inventory control.

• True

• False

The purpose of the purchase requisition is to

• order goods from vendors

• record receipt of goods from vendors

• authorize the purchasing department to order goods

• bill for goods delivered

The purchase order

• is the source document to make an entry into the accounting records

• indicates item description, quantity, and price

• is prepared by the inventory control department

• is approved by the end-user department

Which document is least important in determining the financial value of a purchase?

• purchase requisition

• purchase order

• receiving report

• supplier’s invoic