AIS Chapter 9 Flashcard

Which function or department records a sale in the sales journal?

A. Warehouse
B. Sales department
C. Billing department
D. Inventory control

Billing department
Which functions should be segregated?

A. Picking goods from the warehouse shelves and updating the inventory subsidiary ledger
B. Authorized credit and determining reorder quantities
C. Billing customers and posting the bills to the sales journal
D. Providing information on inventory levels and reconciling the bank statement

Picking goods from the warehouse shelves and updating the inventory subsidiary ledger
WOTF are incompatible tasks?

A. The AR clerk authorizes the write-off of bad debts
B. The record-keeping clerk maintains both AR and AP subsidiary ledgers
C. The inventory control clerk authorizes inventory purchases
D. The AE clerk prepares customer statements every month

The AR clerk authorizes the write-off of bad debts
Which control helps to ensure that the inventory items shipped to the customer are the correct type and the correct amount?

A. Reconciliation BOL and shipping notice
B. Issuance of a blind copy of purchase order
C. Reconcile stock release document and packing slip
D. The way watch

Reconcile stock release document and packing slip
The bill of lading is prepared by the?

A. Sales clerk
B. Shipping clerk
C. Warehouse clerk
D. Billing clerk

Shipping clerk
WOTF is NOT an independent verification control?

A. The shipping de[art,emt verifies that the goods sent from the warehouse are correct in type and quantity
B. General ledger clerks reconcile journal vouchers that were independently prepared in various departments
C. The billing department reconciles the shipping notice with the sales invoice to ensure that customers are billed for only the quantities shipped.
D. Cash receipts reconcile checks from customers and remittance advices to ensure that payments are correct in amount
E. All of the above are independent verification controls

Cash receipts reconcile checks from customers and remittance advise to ensure that payments are correct in amount
Which document defines terms for shipped goods ownership?

A. Packing slip
B. Shipping notice
C. Bill of lading
D. Customer invoice

Bill of lading
WOTF sets of tasks should not be separated?

A. Processing customer sales orders and approving credit
B. Receiving cash and updating the accounts receivable subsidiary ledger
C. Storing inventory in the warehouse and updating the inventory subsidiary ledger
D. Processing customer sales orders and posting to the sales journal
E. All of the above tasks should be separated

All of the above tasks should be separated
WOTF is often called a compensating control?

A. Supervision
B. Access control
C. Segregation of duties
D. Accounting records

Supervision
Which document triggers the billing function?

A. Bill of lading
B. Customer order
C. Sales order
D. Shipping notice

Shipping notice
The revenue cycle consists of

a. one subsystem-order entry
b. two subsystems-sales order processing and cash receipts
c. two subsystems-order entry and inventory control
d. three subsystems-sales order processing, credit authorization, and cash receipts

Two subsystems- sales order processing and cash receipts
The reconciliation that occurs in the shipping department is intended to ensure that?

a. credit has been approved
b. the customer is billed for the exact quantity shipped
c. the goods shipped match the goods ordered
d. inventory records are reduced for the goods shipped

The goods shipped match the goods ordered
Which document triggers the revenue cycle?

a. the sales order
b. the customer purchase order
c. the sales invoice
d. the journal voucher

The customer purchase order
The customer open order file is used to?

a. respond to customer queries
b. fill the customer order
c. ship the customer order
d. authorize customer credit

Respond to customer queries
The stock release copy of the sales order is not used to?

a. locate and pick the items from the warehouse shelves
b. record any out-of-stock items
c. authorize the warehouse clerk to release custody of the inventory to shipping
d. record the reduction of inventory

Record the reduction inventory
Usually specific authorization is required for all of the following except?

a. sales on account which exceed the credit limit
b. sales of goods at the list price
c. a cash refund for goods returned without a receipt
d. write off of an uncollectible account receivable

Sales of goods at the list price
Which of following functions should be segregated?

a. opening the mail and making the journal entry to record cash receipts
b. authorizing credit and determining reorder quantities
c. maintaining the subsidiary ledgers and handling customer queries
d. providing information on inventory levels and reconciling the bank statement

Opening the mail and making the journal entry to record cash receipts
Which situation indicates a weak internal control structure?

a. the mailroom clerk authorizes credit memos
b. the record keeping clerk maintains both accounts receivable and accounts payable
subsidiary ledgers
c. the warehouse clerk obtains a signature before releasing goods for shipment
d. the accounts receivable clerk prepares customer statements every month

The mailroom clerk authorized credit memos
The accounts receivable clerk destroys all invoices for sales made to members of her family and does not record the sale in the accounts receivable subsidiary ledger. Which procedure will not detect this fraud?

a. prenumber and sequence check all invoices
b. reconcile the accounts receivable control to the accounts receivable subsidiary ledger
c. prepare monthly customer statements
d. reconcile total sales on account to the debits in the accounts receivable subsidiary ledger

Prepare monthly customer statements
Which document is included with a shipment sent to a customer?

a. sales invoice
b. stock release form
c. packing slip
d. shipping notice

Packing slip

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