AUE1501 Assignment 4 Semester 2 2023 (SOLUTIONS)

AUE1501 Assignment 4 Semester 2 2023 (SOLUTIONS) Question 1 Not yet answered Marked out of 1.00 Flag question Question text In the recording of receipts function in the revenue and receipts cycle, one of the risks is that a deposit is credited to a wrong debtor. Identify the control to mitigate this risk. a. Queries from debtors should be investigated by an employee independent of debtors and banking. b. Cash receipts should be written up on a daily basis, by date and receipt number. c. The cash book should be reconciled with the bank statement every month. d. Pre numbered receipts should be issued for all payments received. Clear my choice Question 2 Not yet answered Marked out of 1.00 Flag question Question text Select the risk that is not associated with receiving an order from a customer. a. No orders are processed before the credit controller has given the necessary approval. b. An error occurs while the information is being captured on the internal sales order from the customer order. c. Incorrect goods are picked. d. An order is processed from a non-approved account holder. Clear my choice Question 3 Not yet answered Marked out of 1.00 Flag question Question text The despatch function, in the revenue and receipts cycle, generates and or uses certain documents. Select the documents to be associated with the despatch function. a. Delivery note and list of delivery. b. Sales invoice and price lists. c. Picking slip and delivery note. d. Internal sales order and price lists. Clear my choice Question 4 Not yet answered Marked out of 1.00 Flag question Question text Indicate whether the following statement is True or False. The revenue and receipts cycle relates to the entity’s activities of purchasing goods and in exchange for the purchase, they pay for the goods. True False Question 5 Not yet answered Marked out of 1.00 Flag question Question text Choose the most appropriate option that indicates the correct sequence of the functions involved in the revenue and receipts function. a. Order department, credit management and sales authorisation department, warehouse department, despatch department, invoicing department, recording of sales department, receipts department, recording of receipts department. b. Order department, credit management and sales authorisation department, order department, despatch department, warehouse department, recording of sales department, receipts department, recording of receipts department. c. Order department, warehouse department, sales authorisation department, despatch department, recording of sales department, receipts department, recording of receipts department. d. Credit management and sales authorisation department, order department, order department, warehouse department, despatch department, recording of sales department, receipts department, recording of receipts department. Clear my choice Question 6 Not yet answered Marked out of 1.00 Flag question Question text A prospective customer is expected to complete a credit application form. Identify the information that would not likely be requested to be completed in a credit application form. a. An income tax reference number. b. Banking details. c. Trade references. d. Income and expenditure details. Clear my choice Question 7 Not yet answered Marked out of 1.00 Flag question Question text The credit controller approves the credit limit of a customer. The reason for doing this is to avoid ... . a. making sales to a customer who is unable to pay. b. goods being despatched without being invoiced. c. duplicating sales. d. orders not being acted upon timeously. Clear my choice Question 8 Not yet answered Marked out of 1.00 Flag question Question text In the revenue and receipts cycle certain functions (departments) belong to that particular cycle. Identify the function that does not belong to the revenue and receipts cycle. a. Receiving of goods function. b. Despatch function. c. Invoicing function. d. Customer order function. Clear my choice Question 9 Not yet answered Marked out of 1.00 Flag question Question text Indicate the number of accounting cycles that are present in an accounting system of a fruit and vegetable business. a. 5 b. 4 c. 3 d. It can vary according to the type of fruit and vegetable business. Clear my choice Question 10 Not yet answered Marked out of 1.00 Flag question Question text When a company despatches goods picked from a warehouse to a client; what is one of the risks involved? a. Customers deny receiving the goods. b. Goods are despatched timeously. c. A delivery note is signed by the despatch clerk. d. Gate control inspects the goods in the delivery truck. Clear my choice Question 11 Not yet answered Marked out of 1.00 Flag question Question text Indicate whether the following statement is True or False. Dishonest employees may commit fraud or steal from the company in the following way: An additional business entity may be set up by colluding staff members which is accompanied by an official business order. True False Question 12 Not yet answered Marked out of 1.00 Flag question Question text In the despatch function of the revenue and receipts cycle, the gate controller checks that all goods to be delivered appear on the delivery list, and that they are supported by delivery notes and are stamped. Identify the specific risk that this control mitigates. a. Theft may be facilitated by uncontrolled despatch. b. Customers may deny having received goods. c. Goods are released from the warehouse and are never despatched. d. Goods are delivered to the wrong customer. Clear my choice Question 13 Not yet answered Marked out of 1.00 Flag question Question text Indicate whether the following statement is True or False. A credit application form should be completed by a prospective cash only customer so that the credit worthiness of the prospective customer can be evaluated. True False Question 14 Not yet answered Marked out of 1.00 Flag question Question text Select the option that would result in a control being circumvented (bypassed) during the invoicing function. a. The internal sales order and delivery notes are matched and randomly filed. b. Internal sales orders and delivery notes are matched. c. Gaps in the numbering of the delivery notes are investigated. d. Unmatched internal sales orders are investigated. Clear my choice Question 15 Not yet answered Marked out of 1.00 Flag question Question text If the majority of staff employed are honest but sometimes make careless mistakes or do not always implement controls consistently. What is an example of a risk that could go wrong on the revenue and receipts cycle. a. Orders taken from clients who have exceeded their credit terms are authorised. b. Proof of delivery may be obtained from a client. c. Orders are acted on timeously by the order department. d. Credit notes are accurately recorded and passed to the correct debtor.