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Exam 8: Revenue Cycle Processes

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Question 51

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Explain SOX compliance as this Act relates to the sales business process and the accounts receivable business process.

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Both the sales business process and th...

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Question 52

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Describe the procedures for a sales return and explain how the procedures relate to the segregation of duties of authorization,custody of assets,and record keeping.

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The customer returns goods for credit ...

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Question 53

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After an allowance has been authorized and approved,the credit department issues a credit memo to document the reduction in the customer's account.

To maintain an adequate separation of duties,various functions within the customer order process should be independent of each other.An example of this is

In the SAP ERP system,the "create customer" screen,which is used to input statistical and demographic data,is

Risk assessment should evaluate identified risks of material misstatement due to fraud and controls intended to address the risk of management override of these controls.

The Jackson Supply Company recently started using a regional lock-box collection system.The controller for the company compared the float using the lock-box system with the float using the company's prior,one-location collection system.The controller found that the company was saving $2,600,000 in average float.The bank that provides the regional lock-box system requires that the company maintain a $500,000 compensating balance at all times.The bank also charges service fees of $120,000 annually. Required: Calculate the percentage cost of net funds freed for Jackson Supply Company.

In the SAP ERP system,all of the different master records are created when the

The SEC Interpretive Guidance "Management's Report on Internal Control Over Financial Reporting" approved in 2007,focuses management on preventing and uncovering fraud.

Accounts receivable often represents the majority of an organization's working capital.

A goods-issued notice is the documentation exchanged between a shipper and a carrier such as a trucking company.

A legal agreement,prepared before selling to customers as a matter of company policy,is a contract.

What documents typically accompany the physical shipment of goods to a customer?

A grocery store customer will be given a gallon of ice cream if his or her receipt has a red star stamped on it.The idea behind this technique from an accounting control standpoint is to

The SAP ERP system requires a customer master record for each customer.A one-time customer of the company

The business process used when there is an existing customer account balance is

The validated deposit slip from a bank should be returned to the cash receipts department.

The distinction between ________ and ________ ________ is important to maintain separation of functions.

Auditing standard No.5 describes a ________ approach to selecting controls to be tested.

Sarbanes-Oxley Act of 2002 requires companies maintain a(n)________ internal control structure over the business processes that support financial reporting.