Accounting Info Systems WileyPlus CH 12

The marketing, sales, and collections business processes involve features from the Customer Relationship Management, Sales Management, and _________ modules of the ERP system.

Financial

Suelita is sending a bill to a customer. In order to do this, which ERP system features must contribute information?

Inventory, customer management, all sales management features, and accounts receivable

Midnight Moon creates custom jewelry pieces that contain unique crystals in each piece and sells them to customers via their website. Wild Alabaster sells unique crystals to retailers who use them in their pieces. Compare the two types of sales.

Midnight Moon is conducting a B2C sale while Wild Alabaster is conducting a B2B sale.

At the beginning of February you review January's sales report and are surprised at how much lower the actual sales are from the sales forecast. While sitting in an anti-fraud training session you get an idea of what could be going on. Which of the following activites do you likely suspect?

More products were shipped to retailers then they could sell in December.

What is the difference between a bank remittance report and a deposit slip?

A bank remittance report lists the checks received from customers, and a deposit slip is proof of the amount deposited into the company's bank account.

What is the difference between a picking request and a packing slip?

A picking request tells the warehouse the products and quantities of each to be filled, and a packing slip shows the customer's name, address, and package contents.

Choose which account will be used when recording a sale in a Business-to-Business (B2B) transaction.

Accounts Receivable

Business rules determine the type of relationships between tables in a relational database. Which of the following is a business rule between both the Sales_Order table and Shipment table and the Sales_Order table and AR_Invoice table?

An invoice must belong to one and only one sales order.

Electronic payment data is transmitted through the _____________, which is an electronic system that serves financial institutions and facilitates financial transactions in the United States.

Automated Clearing House (ACH) Network

An entrepeneur creates custom-made diffuser jewelry pieces and sells them on a website for other essential oil enthusiasts like themselves. Is this a B2B or B2C transaction and why?

B2C transaction, because the webpage is considered a small business and they all use it to sell products to customers

Shane has been reviewing the financial ratios for the last two years. The revenue over time report has a downward trend over those two years even though the three-way match report does not indicate any inappropriate sales. What is the most likely cause of the downward trend of revenue over time?

Bad debt expense is too high compared to net credit sales

As an employee for Chutes International, part of your job description is to reconcile totals frim invoices to gross sales in the General Ledger to verify completeness and accuracy. Which risk statement best matches this control activity?

Sales billed to customers that are not recorded as revenue in the General Ledger may result in a misstatement of financial statements.

During a manager meeting, the warehouse manager suggests matching the sales invoice quantities to the shipping information and the prices to the sales contract to mitigate one of the risks they are currently facing. Review the risks below and select which one best describes the suggested control activity.

Sales invoices have had incorrect quantities and/or prices on them which has resulted in a misstatement of sales revenue and accounts receivable.

As the accounting assistant for Sweets & More, it is your responsibility to record accounting entries into the computer system. Which of the following entries would be needed to record a payment collected on credit sales?

credit Accounts Receivable and debit Cash

While checking inventory, you notice that the number of shipping boxes is getting low so you immediately order more from a vendor the store uses frequently. The boxes get added to the Sweets & More account to be invoiced at the end of the month. Which payment method does this describes?

credit sale (B2B)

Which of the following is data that is generated by the sales process?

customer information

Ben is a new hire with Sweets & More who will be working in customer service. Ben was shown how to navigate the ERP system today and was feeling a bit overwhelmed by all of the data. What feature will Ben need to master for the customer service role?

customer management

The marketing director of Gem's Jewels, a home-based business selling unique jewelry to customers, sends an email to employees with an attachment containing templates for use when responding to common questions on the company social media site. Which of the following risks is the marketing director most likely trying to mitigate?

damage to the company's image

As the accounting assistant for Sweets & More, it is your responsibility to record accounting entries into the computer system. You are currently working on recording the entries for collecting payment for credit sales that have discount terms applied. Which of the following entries would you record?

debit Cash and Sales Discounts; credit Accounts Receivable

Mary's Bakery orders cookies on February 20th, schedules delivery for March 20th, and pays cash in advance. The selling price is $350 and the cost of the cookies is $100. The cookies are delivered on March 20th. What account entry is used for the first transaction in this scenario?

debit Cash for $350; credit Deferred Revenue for $350 on February 20th

Mary's Bakery orders cookies on February 20th, schedules delivery for March 20th, and pays cash in advance. The selling price is $350 and the cost of the cookies is $100. The cookies are delivered on March 20th. What is the journal entry required for the second transaction in this scenario?

debit Deferred Revenue for $350; credit Sales for $350 on March 20th

The marketing director for Crazy Cupcakes discovered an unauthorized user posting on their social media account. Which of the following marketing controls should they implement to decrease the likelihood of this action recurring?

make password logs available to authorized users only

Who commits the most common financial statement fraud cases that involve revenues and receivables?

management

As the owner of Wild & Root Cafe you want to sell organic products made by small businesses that align with your vision and passion. You hire an assistant to find the small businesses and get their products into the Cafe. Organize the steps from beginning to end to ensure this process runs smoothly.

negotiate the price, check creditworthiness, draw up the sales contract, and onboard the customer

As a worker in the shipping department, part of your job is to manage source documents within the computer system. Select the correct method you would use to control these source documents.

numerical order by shipping number

A new distributor has created a credit account with Sweets & More and while onboarding this customer, you notice they have selected to pay the balance on their account by sending in paper checks once they receive their invoices. What is the best method for Sweets & More to deposit these checks?

open a lockbox with the bank to hold the checks until the bank deposits them

Chen is processing a payment from a business customer who purchased raw materials from the company last month. Which type of activity is Chen participating in?

operating activity

As a new employee with Sweets & More, you are reviewing the source documents that you will be dealing with and notice that the sales invoice is very similar to the sales order. What feature is located on the sales invoice but not on the sales order?

payment terms and due dates

An individual has taken a job at the local Big Store shipping center and has been tasked with helping to complete orders on time by preparing the correct quantity and products for shipping. Select which documentation this task requires every day.

picking request

Although a costly investment, after weighing the benefits and costs of automating and integrating their sales system, the board of directors of a small company decided to implement a sales module in their ERP system. What benefit for the board would most outweigh the cost of this action?

prevention of overstatement of revenue to meet profit targets

As an employee with Greenville Incorporated, you work with vendors to get a sales contract in place. Based on this information, which of the five high-level business activities for B2B sales does your job fall under?

pricing and contracts

Which step occurs in the steps of the basic business model prior to the step a sales associate participates in?

production operations

For many years, Sweets & More was the only bakery in town; however, two years ago, a new bakery was opened called Cakes Plus. Which of the following cash collection analytics can you review to show you how Sweets & More is performing against Cakes Plus?

ratios

Your boss has asked you for a summary of historical revenue either by product type or sales channel type. What type of report should you run to provide your boss with this information?

type of revenue

Analyze the following risk statement and determine which sample control activity would mitigate the risk. Risk Statement: Failure to protect food during delivery may result in delivery of a subpar product to customers, food contamination, or theft of product. Select answer from the options below

use food tampering stickers or seals on delivery containers

When does a production company become a vendor?

when they sell the items in finished goods inventory

There are a couple of reasons that a sales order may not result in a shipment or an invoice. Which reason below would make the most sense as to why this happened?

a company has discontinued a product

Celine is reviewing the remittance advice and remittance report from the bank. Why did Celine receive these reports and what document is missing?

a customer made a payment through a lockbox; the deposit slip is missing

Responsibilities for credit terms and checks should be independent of sales, the general ledger, and which other factor?

accounts receivable

Your manager asks for the cash receipts journal report and the sales amounts report for an update on current outstanding balances. You generate the requested individual reports, but then realize there is another report that would show all of the requested information. Which report is it?

accounts receivable balances

As a new parent, you realize that getting out of the house to run errands is a much more difficult task with a baby. For this reason, you decide to order as many things as possible off Amazon to avoid taking the baby out. Which payment method would be applicable in this situation?

advance payment (B2C)

Revenue is recognized based on when a performance obligation is satisfied, and that can be

at a single point in time or over many points in time for each performance obligation.

As the owner of Sweets & More, you are trying to find a system that would help reduce the risk of error and fraud, speed up the processes already in place, and leave behind an electronic audit trail for accountability. What system does this describe?

automated & integrated sales system

With two weeks left in the month, you notice that inventory is tracking higher than last month's numbers. To help decrease this number, you decide to ship more products to retailers than they are capable of selling. Which control activity is best to help minimize this risk?

avoid setting unrealistic bonus targets

Samara is the accounting assistant for the new bakery in town, Cakes Plus. While Samara understands numbers, they are more of a visual person and prefers to see the numbers laid out visually instead of in a traditional accounting format. Choose the best way for Samara to turn the traditional accounts receivable aging report into a more visually appealing format.

bar chart

Mrs. P's Shop sells cakes and other baked goods directly to their customers via a mobile app. This is an example of which kind of sale?

business-to-consumer

The collections process, also known as the _______ process, increases the amount of the Cash line item, the most liquid of current assets on the balance sheet.

cash receipts

On your drive to work, you decide to order a chai tea latte. Because you are in a hurry to get to work, you opt for the drive-through where you place your order, then move to the window where you will pay and receive your latte. What payment method does this describe?

cash sale (B2C)

As the manager for Sweets & More, you feared you would lose your job if you didn't meet performance targets. In an attempt to save your job, you decided to persuade some retail customers to buy more products than needed by offering large discounts. Identify which type of fraud you are committing.

channel stuffing

An employee is going over all the contracts received in the last week to check for any errors. The employee noticed that for one, there was a discrepancy with the performance obligations. In which step in the Revenue Recognition model is the employee engaged?

Step two

Which of the following is an example of a retail customer?

Target selling Pillsbury refrigerated cookie dough

What does the Cash Flow Statement report?

The impact of increases and decreases on the Cash account over the reporting period.

Your food delivery from a local restaurant was just delivered and as you were unpacking the food, you noticed that you were missing a side salad and had a side of broccoli instead. Where could you look to make sure that you did in fact order a side salad instead of the broccoli that was delivered?

delivery receipt

Which of the following is step three of the Revenue Recognition model?

determine the transaction price

Revenue recognition is

determined by U. S. GAAP.

How would you define credit criteria?

factors used to determine the financial strength of customers

When Sweets & More opened, the only payment method offered was accepting paper checks after customers received their invoices. Now that the company is growing, you want to find an easier way to get the customers' money into the bank. What is the best option for the company?

have the customers sign up for electronic funds transfer (EFT)

Braden works in the accounting department as the financial assistant and part of the job responsibility is to manage all of the customers who have credit accounts with Sweets & More. While reviewing the Accounts Receivable Subsidiary Ledger, what do you anticipate the balances of those accounts to reflect?

how much the customer owes at the end of each month

Your job is to open up the mail for your company every morning. This morning there were three envelopes containing accounts receivable checks. What is the very first thing you should do upon receiving the checks?

immediately endorse each of the checks for deposit

Customers of Sweets & More were complaining about collection calls. After a thorough investigation, it appears that checks received in the mail were not deposited intact. What is the best control activity Sweets & More could use to help mitigate this risk?

implement electronic funds transfer directly to the company's bank account

As the controller for Sweets & More, you are responsible for recording all journal entries, as well as preparing all financial statements. Today, you are working on the balance sheet for the previous month and are trying to record the collections process. How is this collection process shown on the balance sheet?

increases the amount of the cash line item

Selling used machinery and equipment for cash is an example of which type of activity that will impact financial statements?

investing activity

Sanjay performs an analysis that allows outstanding invoices to be identified. Next Sanjay would like to make sure the invoices are accurate so the expected revenue by customer can be calculated. Which of the following reports did Sanjay use first and which should he use second?

invoice comparison; accounts receivable

A customer is reviewing a document that contains a name, address, order date, and the individual price for the item ordered. Which of the following would also be included in the document?

item/service description

One of the most significant fraud risks your company is facing right now is fictitious sales that result in overstatement of revenues (a credit) and receivables (a debit). Which control activity could the board of director's implement to mitigate this fraud risk?

maintain a strong audit committee, board of directors, and a controlled environment

List the steps in the cash collecting process in the correct order.

receiving cash from the customer, depositing it, recording the cash receipts

Since opening Sweets & More, the company has tripled in size which means the company now has several departments to handle the various functions of the company. While this certainly streamlines things, it also opens up the company to several risks. What is a risk that spans over every department within Sweets & More?

redundancy

A customer calls in stating their order was delivered to the wrong address and they called in the new address a few weeks ago. You advise the customer that you will look into it and correct the issue immediately. What most likely happened in this scenario?

redundant information is stored in multiple locations and all areas were not updated

During the holiday season, Sweets & More places more orders than usual from their mini cookie vendor to fulfill their holiday baskets. At the end of the season, the manager sends out payment for the mini-cookies. Which of the following source documents would be sent along with the payment?

remittance advice

What is the most important stage in the marketing process for reaching potential customers and generating revenue for a company?

research and development

With revenue trending down over the last few months, your boss has asked you to run a report that will give a summary of revenue brought in. It will be used to try and identify when this downward trend started and to try to get an idea of how to fix it. Which report should you run to provide your boss with this information?

revenue over time

Management is concerned about possible fraud within the company. They would like to monitor activity in real-time and easily be able to see when suspicious activity is occurring. Which of the following would be LEAST likely to be included in a dashboard?

revenue recognition reports

Working in the shipping department requires you to know and understand a variety of different source documents. Which of the following source documents comes after a sale has been made but before the customer has paid for the purchases?

sales invoice

It is brought to your attention that some sales orders from the last few months were never shipped out to customers. What is the best sales report to run that would give you the information needed to determine which orders were not shipped out?

sales orders aging

Sweets & More launched a new frozen cookie dough and due to high traffic and large orders, the website crashed. You are afraid some of the orders didn't make it to the warehouse when the website crashed. Which sales report could you run to determine if this occurred?

sales orders filled and open

What control activity is the Chief Financial Officer (CFO) responsible for to mitigate risks with cash receipts?

segregate authorization responsibilities and duties for accounting activities

What is the most important factor contributing to creating a successful business model?

selling products and/or services for a competitive, profit-generating price

Collusion between salespersons and customers, which results in the salesperson receiving kickbacks or other rewards for selling at a discounted price to the customer, is a _______ fraud risk in this area.

significant

While reviewing the cash receipts journal report for the month, you notice some discrepancies between the revenue Sweets & More received and the amount of inventory that was shipped out. Why will the cash receipts report help determine what the discrepancies are and when they started?

summary of all receipts received by Sweets & More over a period of time.

An accountant in the accounting department of Midnight Shine is responsible for recording all business transactions that coincide with sales. Which of the following would be a transaction that would need to be recorded?

the purchase of apples by Mum's Pie Shhoppe