Accounting Information Systems Chapter 12 Test Bank 1) In organizatons wih a leas basic segregaton segregaton of dutes, he credi manager repors o he ________ and he reasurer repors o he ________. A) conroller; vice presiden of nance !) reasurer; conroller ") mar#etng manager; vice presiden of nance $) reasurer; vice presiden of nance Answer% $ &) In he revenue c'cle, before before a shipping notce is prepared, he shipping deparmen personnel should mach he invenor' received from he warehouse o deails from A) pic#ing tc#es. !) sales order and bill of lading. ") sales order. $) pic#ing tc#e and sales order. Answer% $ () hich is he best conrol conrol o preven invoicing cusomers for he *uant' ordered, which was more han he *uant' shipped due o iems on bac#order+ A) se he informaton from he pac#ing slip o prepare he sales invoice. !) se he informaton from he pic#ing tc#e o prepare he sales invoice. ") se he informaton informaton from he bill of lading o prepare he sales invoice. $) se he informaton from he sales order o prepare he sales invoice. Answer% A -) hich of he following documens normall' riggers he billing process in he revenue c'cle+ A) ac#ing slip received from he shipping deparmen !) /ales order received from he sales deparmen ") ic#ing tc#e received from he sales deparmen $) 0ournal voucher received from he shipping deparmen Answer% A ) hich of he following documens would normall' rigger he process o record a cusomer pa'men+ A) 2emi3ance advice !) "usomer monhl' saemen ") $eposi slip $) /ales invoice Answer% A
age|1
Ahmed Naser
4) hich documen should alwa's be included wih a merchandise shipmen o a cusomer+ A) ac#ing slip !) ic#ing tc#e ") 2emi3ance advice $) /ales invoice Answer% A 5) A monhl' saemen sen o cusomers serves a conrol purpose b' A) providing an opporuni' for cusomers o verif' he balance owed and actvi' on he accoun. !) riggering he process o record a cusomer pa'men. ") summarizing invoices and amouns due for cusomers. $) reminding cusomers of he balance due and due dae. Answer% A 6) Accountng recognizes a sale when A) invenor' becomes he legal proper' of he cusomer. !) cash is received from he cusomer. ") a sales order is approved b' sales, invenor' conrol, and credi deparmens. $) invenor' is removed from he warehouse. Answer% A 11) ha is he primar' ob7ectve of he revenue c'cle+ A) o ma8imize revenue and minimize e8pense !) o reduce ousanding accouns receivable balances hrough increased cash sales ") o provide he righ produc in he righ place a he righ tme a he righ price $) o sell as much produc as possible and9or o ma8imize service billings Answer% " 1&) hich of he decisions below is not ordinaril' found as par of he revenue c'cle+ A) ha credi erms should be o:ered+ !) ow o
age|2
Ahmed Naser
1>) 2eail sores could send heir orders direcl' o he manufacurer?s sales order s'sem in a forma ha would eliminae he need for daa enr', using A) @endor anaged Invenor'. !) Blecronic $aa Inerchange. ") oin of /ale. $) Blecronic Cunds Dransfer. Answer% ! 1-) aching cusomer accoun numbers and invenor' iem numbers o he numbers in he cusomer and invenor' maser les is an e8ample of a A) compleeness es. !) eld chec#. ") reasonableness es. $) validi' chec#. Answer% $ 15) hen a cusomer places an order Eon accoun) for a cerain produc, wha should be done before he order is chec#ed for invenor' availabili'+ A) Dhe cusomer?s available credi should be chec#ed. !) Dhe sales order should be creaed and wri3en o a le. ") /hipping should be noted of an order in process. $) A pic#ing lis should be generaed for he warehouse. Answer% A 16) ow is credi approval generall' handled for esablished cusomers wih a documened pa'men hisor'+ A) /pecic auhorizaton b' he credi manager !) Feneral auhorizaton b' a sales cler# ") A new credi applicaton is re*uesed $) A formal credi chec# should be made for each sale Answer% ! &G) ha is a 'pical procedure for processing sales orders from new cusomers or cusomers ma#ing a purchase ha causes heir credi limi o be e8ceeded+ A) Feneral auhorizaton o approve he order is given o sales cler#s. !) /pecic auhorizaton mus be graned b' he credi manager. ") Dhe sale should be re7eced. $) Dhe sales cler# should order a repor from a credi bureau before approving he order. Answer% ! &1) A compan' should chec# invenor' *uanttes before acceptng a sales order for all he following reasons except o A) verif' he accurac' of he perpeual invenor' records. !) inform he cusomer abou availabili' and deliver' tmes. ") #now which iems ma' need o be bac# ordered. $) updae invenor' records o reduce he *uant' available b' he number of iems ordered. Answer% A age|3
Ahmed Naser
&&) 2esponding o cusomer in*uiries and general cusomer service is an imporan aspec in he revenue c'cle. /ince cusomer service is so imporan, so) Dhis documen is a legal conrac ha denes responsibili' for goods ha are in ransi. A) pac#ing slip !) bill of lading ") pic#ing lis $) bac# order Answer% ! &-) Dwo documens usuall' accompan' goods shipped o a cusomer. ha are he wo documens+ A) a bill of lading and an invoice !) a pac#ing slip and a bill of lading ") an invoice and a pac#ing slip $) an invoice and a sales order Answer% ! &) ha is he basic documen creaed in he billing process+ A) bill of lading !) sales order ") pac#ing lis $) sales invoice Answer% $ &4) A compan' uses he mehod for rac#ing accouns receivable where cusomers pa' according o individual sales invoices. Dhis describes he ________ mehod. A) monhl' saemen !) openinvoice ") balance forward $) c'cle billing Answer% ! &5) A mehod for rac#ing accouns receivable ha maches specic invoices and pa'mens from he cusomer is called aEn) ________ mehod. A) specic identcaton !) balance forward ") c'cle billing $) openinvoice Answer% $ age|4
Ahmed Naser
&6) Dhe documen a cusomer reurns wih heir pa'men and ha identes he source and he amoun of he pa'men is called a A) remi3ance advice. !) remi3ance lis. ") credi memorandum. $) debi memorandum. Answer% A (G) In he ________ mehod of rac#ing accouns receivable, cusomers pa' according o he amoun showing on heir monhl' saemen and pa'mens are applied agains he oal accoun balance. A) specic identcaton !) openinvoice ") balance forward $) remi3ance advice Answer% " (1) hen a cusomer pa's o: he balance on an invoice, he pa'men is credied o he ________ le. A) cusomer maser !) sales ransacton ") cash receips maser $) All of he above are correc. Answer% A (&) A 'pe of business documen in which par of he original documen is reurned o he source for furher processing is called a ________ documen. A) feedbac# !) reurnable ") closedloop $) urnaround Answer% $ (() A documen 'picall' encounered in he revenue c'cle ha is boh an oupu documen and a source documen is he A) sales invoice. !) cusomer purchase order. ") sales order. $) pac#ing slip. Answer% A (>) A ________ s'sem prepares and mails monhl' saemens o cusomers hroughou he entre monh, insead of 7us a he end of he monh. A) contnuous !) openinvoice ") c'cle billing $) balance forward Answer% " age|5
Ahmed Naser
() Dhe benes of a loc#bo8 arrangemen wih a ban# are ma8imized when A) he ban# is locaed nearb' o he compan', so remi3ance advices can be delivered o he compan' ever' da'. !) several ban#s around he counr' are used, in order o minimize he tme pa'mens, spend in he mail. ") an arrangemen is made wih onl' one ban#, so all remi3ance advices can be bached for processing. $) he ban# deposis he pa'mens and accesses he cusomer?s informaton s'sem o record he pa'mens. Answer% ! (4) An arrangemen where a ban# receives cusomer pa'mens hrough he posal s'sem, scans he remi3ance advices, and ransmis pa'men daa o he business elecronicall' is #nown as A) ecommerce. !) an elecronic loc#bo8. ") elecronic funds ransfer EBCD). $) elecronic daa inerchange EB$I). Answer% ! (5) "usomers ha send heir pa'mens elecronicall' direcl' o he compan'?s ban# are using A) elecronic daa inerchange EB$I). !) elecronic funds ransfer EBCD). ") procuremen cards. $) an elecronic loc#bo8. Answer% ! (6) A wa' o incorporae he advanages of Blecronic $aa Inerchange wih he Blecronic Cunds Dransfer is A) Cinancial Blecronic $aa Inerchange. !) ecommerce. ") o use procuremen cards. $) an elecronic loc#bo8. Answer% A >G) Je' di:erences e8is when an inegraed Bnerprise 2esource lanning s'sem EB2) replaces an e8istng AI/ or legac' s'sem. Cor e8ample, ________ are more accurae and tmel', enabling sales order enr' sa: o provide cusomers more accurae informaton abou deliver' daes. A) invenor' records !) cash receips ") credi approval decisions $) e8cepton repors Answer% A
>&) Dhe actvites involved in solicitng and processing cusomer orders wihin he revenue c'cle are age|6
Ahmed Naser
#nown as he ________. A) sales order enr' process !) shipping order process ") revenue process $) mar#etng process Answer% A >4) /eparatng he shipping and billing functons is designed o reduce he hrea of A) failure o bill cusomers. !) billing cusomers for wrong *uanttes. ") billing cusomers before merchandise has been shipped. $) shipping he wrong merchandise. Answer% A -4) In ealuma, "alifornia, elecric power is provided o consumers b' he ower Do Dhe eople Blecrical "ompan', a local coop. Bach monh DD mails bills o 4G,GGG households and hen processes pa'mens as he' are received. Dhe cusomers are provided wih a remi3ance advice, which is a A) warning ha failure o pa' b' he due dae will resul in a lae charge. !) conrmaton of he rm?s privac' polic'. ") urnaround documen. $) bill. Answer% " -5) Kaz "hance wears roller blades and headphones when he is a wor# a he /*uish' Dhings Do' "ompan'. e is a produc pac#er. Dhe headphones give him compuergeneraed insructons so he #nows he locaton of each iem and *uant' ha should be included in he order. Dhese insructons are he e*uivalen of a A) pic#ing tc#e. !) bill of lading. ") pac#ing slip. $) sales order. Answer% A -6) Dhe shipping deparmen a /*uish' Dhings Do' "ompan' follows policies ha deermine which carrier will deliver orders according o he size, weigh, and destnaton of he shipmen. I mainains sanding agreemens wih shippers ha specif' legal responsibili' for he shipmen while i is in ransi. Dhe erms of he agreemens are documened on A) pic#ing tc#es. !) bills of lading. ") pac#ing slips. $) 2CI$ ags. Answer% !
G) /ad "lown a7amas is an Inernebased wholesaler. Dhe manager of "allow Louh "lohing received age|7
Ahmed Naser
an order from /ad "lown and found ha he wrong produc had been shipped. e repac#aged he order and sen i bac# for a refund. hen /ad "lown a7amas received he reurned produc, he' mailed a ______ o "allow Louh "lohing?s manager. A) pac#ing slip !) le3er re*uestng an e8planaton ") remi3ance advice $) credi memo Answer% $ >) Dhe accouns receivable managemen mehod 'picall' used b' credi card companies is A) balance forward. !) posbilling. ") monhl' saemen. $) openinvoice. Answer% A
age|8
Ahmed Naser
