WorksheetsFormative Test 2 - Revenue Cycle
Total questions: 10
Worksheet time: 5mins
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
Who is responsible for establishing and maintaining the internal control system?
the internal auditor
the accountant
management
the external auditor
Which of the following situations is not a segregation of duties violation?
The treasurer has the authority to sign checks but gives the signature block to the assistant treasurer to run the check-signing machine.
The warehouse clerk, who has the custodial responsibility over inventory in the warehouse, selects the vendor and authorizes purchases when inventories are low.
The sales manager has the responsibility to approve credit and the authority to write off accounts.
The accounting clerk who shares the record keeping responsibility for the accounts receivable subsidiary ledger performs the monthly reconciliation of the subsidiary ledger and the control account.
The stock release copy of the sales order is not used to
locate and pick the items from the warehouse shelves
record any out-of-stock items
authorize the warehouse clerk to release custody of the inventory to shipping
record the reduction of inventory
Which of the following is not an example of independent verification?
comparing fixed assets on hand to the accounting records
performing a bank reconciliation
comparing the accounts payable subsidiary ledger to the control account
permitting authorized users only to access the accounting system
The packing slip is also known as the shipping notice
True
False
Internal controls for handling sales returns and allowances do not include
computing bad debt expense using the percentage of credit sales
verifying that the goods have been returned
using the original sales invoice to prepare the sales returns slip
authorizing the credit memo by management
Which department prepares the bill of lading?
sales
warehouse
shipping
credit
Periodically, the general ledger department receives all of the following except
total increases to accounts receivable
total of all sales backorders
total of all sales
total decreases in inventory
