Alabama A&M University ACC 472 1)In an integrated cash receipts system, the cash receipts clerk reconciles the checks and the remittance advices and prepares deposit slips

Alabama A&M University

ACC 472

1)In an integrated cash receipts system, the cash receipts clerk reconciles the checks and the remittance advices and prepares deposit slips.

2  When customer payments are received, the mailroom clerk sends the checks to the cash receipts clerk and the remittance advices to the AR clerk.

3                              The stock release document is prepared by the shipping department to provide evidence that the goods have been released to the customer.

4              In a manual system, the billing department is responsible for recording the sale in the sales journal.

5              The warehouse is responsible for updating the inventory subsidiary ledger.

6.            A remittance advice is a form of turn-around document.

7.            If a customer submits a written purchase order, there is no need to prepare a sales order.

8.            The principal source document in the sales order system is the sales order.

9.            In real-time processing systems, routine credit authorizations are automated.

10.          The purpose of the invoice is to bill the customer.

11.          In an integrated cash receipts system, which of the following is not a task of the mail room clerk?

a.            Prepare deposit slips

b.            Open envelopes

c.             Prepare remittance list

d.            Make bank deposit

12.          Which type of control is considered a compensating control?

a.            segregation of duties

b.            access control

c.             supervision

d.            accounting records

13.          Which document is NOT prepared by the sales department?

a.            packing slip

b.            shipping notice

c.             bill of lading

d.            stock release

14.          Adjustments to accounts receivable for payments received from customers is based upon

a.            the customer’s check

b.            the cash prelist

c.             the remittance advice that accompanies payment

d.            a memo prepared in the mailroom

15.          Which journal is not used in the revenue cycle?

a.            cash receipts journal

b.            sales journal

c.             purchases journal

d.            general journal

16.          Commercial accounting systems have fully integrated modules. The word “integrated” means that

a.            segregation of duties is not possible

b.            transfer of information among modules occurs automatically

c.             batch processing is not an option

d.            separate entries are made in the general ledger accounts and the subsidiary ledgers

17.          At which point is supervision most critical in the cash receipts system?

a.            accounts receivable

b.            general ledger

c.             mail room

d.            cash receipts

18.          Internal controls for handling sales returns and allowances do not include

a.            computing bad debt expense using the percentage of credit sales

b.            verifying that the goods have been returned

c.             authorizing the credit memo by management

d.            using the original sales invoice to prepare the sales returns slip

19.          Good internal controls in the revenue cycle should ensure all of the following except

a.            all sales are profitable

b.            all sales are recorded

c.             credit is authorized

d.            inventory to be shipped is not stolen

20.          The most effective internal control procedure to prevent or detect the creation of fictitious credit memoranda for sales returns is to

a.            supervise the accounts receivable department

b.            limit access to credit memoranda

c.             prenumber and sequence check all credit memoranda

d.            require management approval for all credit memoranda

21.          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

22.          The billing department is not responsible for

a.            updating the inventory subsidiary records

b.            recording the sale in the sales journal

c.             notifying accounts receivable of the sale

d.            sending the invoice to the customer