ACCTMIS 3600 Exam 2 Questions –
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Answers with A+ Grade Assurance
5 business cycles ANSW ✔✔ revenue cycle
expenditure cycle
production cycle
HR/payroll cycle
inventory, control and shipping cycle
Revenue Cycle ANSW ✔✔ Set of business activities and related information
processing operations associated with:
providing goods/services
collecting cash payments
Primary objective of the revenue cycle ANSW ✔✔ Maximizing inflow of
revenues by providing the right product in the right place at the right time for
the right price
Control objective of the revenue cycle ANSW ✔✔ Each organization defines
their own control objectives
Examples of control objectives for the revenue cycle ANSW ✔✔ All valid sales
are recorded and none omitted
Sales are authorized according to company policy
Recorded sales are valid and documented
Level 0 functions of the revenue cycle ANSW ✔✔ 1. Sales order entry
,2. Shipping
3. Billing
4. Cash collection
1&2: Providing goods and/or services
3&4: Collecting cash payments
Sales order entry (1.0) ANSW ✔✔ Usually performed by the sales order
department and processes include:
1. Take customer's order
2. Check customer's credit
3. Check inventory availability
4. Respond to customer inquiries (may be done by customer service or sales
order entry)
Why do we have sales order entry? ANSW ✔✔ To reduce human error and
allow the customers to enter data themselves
Two main tables for sales order information ANSW ✔✔ Sales order header
and sales order item
Sales order header ANSW ✔✔ Refers to a specific customer - tied to customer
master
Sales order item ANSW ✔✔ Refers to product or item master table
When should credit sales be approved? ANSW ✔✔ Before the order is
processed further than sales order entry
, 2 types of authorization in sales order entry (1.2) ANSW ✔✔ 1. General
Authorization
2. Specific Authorization
General Authorization ANSW ✔✔ Customer is in good standing and
automatically approved
Specific Authorization ANSW ✔✔ For new members, customers with
remaining balances, or those whose purchase exceeds their credit limit;
requires additional approval
What do you do after credit is approved? (1.3) ANSW ✔✔ Check if there is
sufficient inventory to fill order and tell customer shipping time
If inventory is available ANSW ✔✔ 1. Complete sales order
2. Update new quantity in inventory
3. Issue a picking ticket
4. Notify shipping, billing, inventory and customer
Picking ticket ANSW ✔✔ Document that lists item and quantity of inventory
needed to be picked in the warehouse
If there is not inventory available ANSW ✔✔ 1. Initiate back order
2. Notify production or purchasing that more inventory is needed
100% Correct, Expert Verified
Answers with A+ Grade Assurance
5 business cycles ANSW ✔✔ revenue cycle
expenditure cycle
production cycle
HR/payroll cycle
inventory, control and shipping cycle
Revenue Cycle ANSW ✔✔ Set of business activities and related information
processing operations associated with:
providing goods/services
collecting cash payments
Primary objective of the revenue cycle ANSW ✔✔ Maximizing inflow of
revenues by providing the right product in the right place at the right time for
the right price
Control objective of the revenue cycle ANSW ✔✔ Each organization defines
their own control objectives
Examples of control objectives for the revenue cycle ANSW ✔✔ All valid sales
are recorded and none omitted
Sales are authorized according to company policy
Recorded sales are valid and documented
Level 0 functions of the revenue cycle ANSW ✔✔ 1. Sales order entry
,2. Shipping
3. Billing
4. Cash collection
1&2: Providing goods and/or services
3&4: Collecting cash payments
Sales order entry (1.0) ANSW ✔✔ Usually performed by the sales order
department and processes include:
1. Take customer's order
2. Check customer's credit
3. Check inventory availability
4. Respond to customer inquiries (may be done by customer service or sales
order entry)
Why do we have sales order entry? ANSW ✔✔ To reduce human error and
allow the customers to enter data themselves
Two main tables for sales order information ANSW ✔✔ Sales order header
and sales order item
Sales order header ANSW ✔✔ Refers to a specific customer - tied to customer
master
Sales order item ANSW ✔✔ Refers to product or item master table
When should credit sales be approved? ANSW ✔✔ Before the order is
processed further than sales order entry
, 2 types of authorization in sales order entry (1.2) ANSW ✔✔ 1. General
Authorization
2. Specific Authorization
General Authorization ANSW ✔✔ Customer is in good standing and
automatically approved
Specific Authorization ANSW ✔✔ For new members, customers with
remaining balances, or those whose purchase exceeds their credit limit;
requires additional approval
What do you do after credit is approved? (1.3) ANSW ✔✔ Check if there is
sufficient inventory to fill order and tell customer shipping time
If inventory is available ANSW ✔✔ 1. Complete sales order
2. Update new quantity in inventory
3. Issue a picking ticket
4. Notify shipping, billing, inventory and customer
Picking ticket ANSW ✔✔ Document that lists item and quantity of inventory
needed to be picked in the warehouse
If there is not inventory available ANSW ✔✔ 1. Initiate back order
2. Notify production or purchasing that more inventory is needed
