AIS Chapter 12

Which step in the sales/collection process typically occurs on a monthly basis only? a. take customer order b. write off accounts receivable c. ship merchandise d. bill customer

d. bill customer

In a systems flowchart, which of the following is most likely to be depicted with a decision symbol? a. the customer's decision to order form Bonnie b. Bonnie's checking the inventory on hand c. Bonnie's decisions to reconcile her bank account d. the client's decision to remit payment

b. Bonnie checking the inventory on hand

To promote strong internal control, which of the following documents should be matched prior to billing a customer? a. customer invoice and customer order b. bill of lading and customer order c. bill of lading and customer invoice d. customer order and picking list

b. bill of lading and customer invoice

A journal entry debits cash and credits accounts receivable. Which of the following transactions is it recording? a. A cash sale b. cash collected from a client c. cash collected as deferred revenue d. operating cash flow

b. cash collected from a client

In Porter's value chain, all of the following are primary activities except: a. information technology b. service c. inbound logistics d. marketing and sales

a. information technology

The shipping department utilizes all of the following documents except: a. customer order b. picking list c. packing list d. bill of lading

a. customer order

Which of the following internal controls should Bonnie implement in the first step of the sales/collection process? a. data encryption b. separation of duties c. lockbox system d. bank reconciliation

a. data encryption

Which step in the sales/collection process immediately follows taking a customer order? a. evaluate credit b. fill the order c. ship the product d. verify inventory availability

a. evaluate credit

All of the following are likely to be tables in Bonnie's relational database except: a. customer b. inventory c. employee d. order/inventory

c. employee

Companies often rely on third-party vendors to avoid the risk of a. filling orders incorrectly b. selling products that are not available c. grating credit to customers who are not creditworthy d. billing the customer incorrectly

c. granting credit to customers who are not creditworthy

In Porter's value chain, receiving and storing raw materials are referred to as: a. procurement b. operations c. inbound logistics d. infrastructure

c. inbound logistics

A remittance advice: a. is the source document used to record cash receipts form a customer b. Is the same as a sales invoice c. Is not needed if payments are accepted only with checks d. is deposited in the bank

a. is the source document used to record cash receipts from a customer

In a well-designed sales/collection process, the customer's credit should be evaluated: a. as the first step b. immediately after taking the customer's order c. immediately before billing the customer d. by the salesperson taking the order

b. immediately after taking the customer's order

Bonnie makes and sells her own jewelry over the internet. A customer browses Bonnie's catalog online and fills out a sales order. The sales order is transmitted electronically to Bonnie, who checks her inventory for each item ordered. If the item is on hand, Bonnie emails the client with an expected shipment date; at that point, the customer must agree to wait until the expected shipment date or cancel the order. Bonnie encloses an invoice with all shipped merchandise; the client sends a check directly to Bonnie's bank for deposit. The bank reports all deposits to Bonnie on a weekly basis. Bonnie reconciles her bank account every day. In a systems flowchart, which of the following is most likely to be depicted with a predefined process symbol? a. browse catalog b. make bank deposit c. e-mail client d. none of the above

b. make bank deposit

Lisa purchased merchandise on credit from FTG Corporation. When she paid the bill, she indicated that the check should be applied to Invoices 123 and 431. What system for recording cash collections might this infer for FTG Corporation? a. accrual b. open invoice c. balance forward d. cannot be determined from the information given

b. open invoice

At which point will Bonnie make a journal entry that debits accounts receivable and credits sales a. when the order is transmitted b. when the goods are shipped c. when the cash is deposited d. when Bonnie reconciles the bank statement

b. when the goods are shipped

specifies freight terms

bill of lading

internal control

independent order checking

support activity

information technology

primary activity

outbound logistics

guides product selection from warehouse

picking list

order taking methods

face-to-face, internet, mail, phone

restrictive endorsement

for deposit only

junction file

sales/inventory

comprises primary and support activities

value chain

Which of the following is a primary activity in Porter's value chain? a. procurement b. information technology c. outbound logistics d. infrastructure

c. outbound logistics

Which of the following internal control processes would most likely be completed using information technology? a. evaluating credit b. document matching c. sequential numbering d. separation of duties

c. sequential numbering

Which of the following internal controls will ensure that fraud does not exist at all in the sales/collection process: (i) document matching, (ii) separation of duties? a. i only b. ii only c. both i and ii d. neither i nor ii

d. neither i nor ii

All of the following are master files associated with the sales/collection process except: a. employee b. customer c. inventory d. sales

d. sales

flowchart column headings

sales department, credit department, warehouse