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WorksheetsREVENUE CYCLE
Total questions: 15
Worksheet time: 30mins
1. ________ is not a basic activity of the revenue cycle.
A) Receiving
B) Sales order entry
C) Shipping
D) Billing
2. The revenue cycle's primary objective is to
A) Provide quality product in order to maximize market share.
B) Lower expenses.
C) Maximize the company's profit.
D) Provide the right product in the right place at the right time for the right price.
3. The basic document created in the billing process is called a _______.
A) Bill of lading
B) Sales invoice
C) Sales order
D) Packing list
4. Which one of the following is not a billing threat?
A) Billing errors
B) Ommission in account receivable
C) Inaccurate credit memo
D) Uncollected accounts
5. Which one of the following is not a threat in shipping process?
A) Picking wrong item or quantity to ship
B) Incomplete orders
C) Ship to the wrong address
D) Theft
6. Two documents usually accompany goods shipped to a customer. What are the two documents?
A) A bill of lading and an invoice
B) A packing slip and a bill of lading
C) An invoice and a packing slip
D) An invoice and a sales order
7. The document a customer returns with their payment and that identifies the source and the amount of the payment is called a
A) Remittance advice
B) Remittance list
C) Credit memorandum
D) Debit memorandum
8. What is a typical procedure for processing sales orders from new customers or customers making a purchase that causes their credit limit to be exceeded?
A) General authorization to approve the order is given to sales clerks.
B) Specific authorization must be granted by the credit manager.
C) The sale should be rejected.
D) The sales clerk should order a report from a credit bureau before approving the order.
9. When a customer places an order (on account) for a certain product, what should be done before the order is checked for inventory availability?
A) The customer's available credit should be checked.
B) The sales order should be created and written to a file.
C) Shipping should be notified of an order in process.
D) A picking list should be generated for the warehouse.
10. The ______ normally triggers the billing process in the revenue cycle.
A) Sale order received from the sales department
B) Picking ticket received from the sales department
C) Packing slip received from the shipping department
D) Journal voucher received from the shipping department
11. The _______ normally triggers the customer payment recording process.
A) Sales invoice
B) Deposit slip
C) Remittance advice
D) Customer monthly statement
12. How to overcome shipping errors?
A) Regular reconciliation information about shipment with sales order
B) Approve packing slip before release the goods
C) Sales order form should be recorded by sales clerk
D) Match total inventories in the warehouse with recorded in the system
13. For the internal control procedures to be effective, employees maintaining the accounts receivable subsidiary ledger should not also approve
A) Employee overtime wages
B) Credit granted to customers
C) Write-offs of customer accounts
D) Cash disbursements
14. Regularly reviewing an accounts receivable aging report can help management to
A) Determine whether the firm's pricing policy is effective
B) Identify customers who have not purchased anything lately
C) Spot firms who are falling behind in their payments
D) Improve the speed which customers make payments
15. The accounts receivable clerk destroys all invoices for sales made to family and friends and does not record the sales in the accounts receivable subsidiary ledgers. The family and friends usually give the clerk cash as a "thank you." which procedure will not prevent or detect this fraud?
A) Sequentially prenumber all invoices and prepare a sequence check at the end of each day.
B) Send monthly statements to all customers with balances owed.
C) Reconcile sales invoices in the billing department to the total debits to accounts receivable subsidiary ledgers.
D) Reconcile the accounts receivable control account to the accounts receivable subsidiary ledger.
