Page 226 - Accounting Information Systems

CHAPT E R 4 The Revenue Cycle 197

Key Terms

accounts receivable (AR) subsidiary ledger (159) ledger copy (159)
approved credit memo (162) open sales order file (169)
approved sales order (154) packing slip (157)
automation (177) point-of-sale (POS) systems (177)
back-order (156) prenumbered documents (169)
back-order file (169) reengineering (177)
batch control totals (192) remittance advice (163)
bill of lading (157) remittance list (163)
cash receipts journal (166) return slip (162)
closed sales order file (183) sales invoice (157)
controller (168) sales journal (157)
credit authorization (171) sales journal voucher (157)
credit memo (162) sales order (154)
credit records file (169) sales order (credit copy) (154)
customer open order file (154) sales order (invoice copy) (157)
customer order (154) shipping notice (157)
cycle billing (194) shipping log (169)
deposit slip (166) S.O. pending file (157)
electronic data interchange (EDI) (187) stock records (156)
inventory subsidiary ledger (157) stock release (154)
journal voucher (157) universal product code (UPC) (185)
journal voucher file (157) verified stock release (156)

Review Questions

1. What document initiates the sales process? 11. What are the key features of a POS system?
2. Distinguish between a packing slip, a shipping 12. How is the primary key critical in preserving the
notice, and a bill of lading. audit trail?
3. What function does the receiving department 13. What are the advantages of real-time
serve in the revenue cycle? processing?
4. The general ledger clerk receives summary data 14. Why does billing receive a copy of the sales order
from which departments? What form of summary when the order is approved but does not bill until
data? the goods are shipped?
5. What are three authorization controls? 15. Why was EDI devised?
6. What are the three rules that ensure that no single 16. What types of unique control problems are cre-
employee or department processes a transaction ated by the use of PC accounting systems?
in its entirety? 17. In a manual system, after which event in the sales
7. At which points in the revenue cycle are inde- process should the customer be billed?
pendent verification controls necessary? 18. What is a bill of lading?
8. What is automation and why is it used? 19. What document initiates the billing process?
9. What is the objective of reengineering? 20. Where in the cash receipts process does supervi-
10. Distinguish between an edit run, a sort run, and an sion play an important role?
update run.