Question

1. Which of the following expenditure cycle activities can be eliminated through the use of IT or reengineering?
   1. ordering goods
   2. receiving goods
   3. approving vendor invoices
   4. cash disbursements
2. Which   of   the   following   revenue   cycle   activities   can   potentially   be eliminated by technology?
   1. sales order entry
   2. shipping
   3. cash collections
   4. billing
3. Which of the following matches is performed in evaluated receipt settlement (ERS)?

1. the vendor invoice with the receiving report
2. the purchase order with the receiving report
3. the vendor invoice with the purchase order
4. the vendor invoice, the receiving report, and the purchase order

4. Which of the following provides a means both to improve the efficiency of processing customer payments and also to enhance control over those payments?
   1. lockboxes
   2. CRM
   3. aging accounts receivable
   4. EDI
5. Which document is used to establish a contract for the purchase of goods or services from a supplier?
   1. vendor invoice
   2. purchase requisition
   3. purchase order
   4. disbursement voucher
6. Which activity is part of the sales order entry process?
   1. setting customer credit limits
   2. preparing a bill of lading
   3. checking customer credit
   4. approving sales returns

7. What is the best control procedure to prevent paying the same invoice twice?
   1. Segregate check-preparation and check-signing functions.
   2. Prepare checks only for invoices that have been matched to receiving reports and purchase orders.
   3. Cancel all supporting documents when the check is signed.
   4. Require two signatures on all checks above a certain limit.
8. Which document often accompanies merchandise shipped to a customer?
   1. picking ticket
   2. sales order
   3. credit memo
   4. packing slip
9. It is difficult to prevent fraudulent billing for services. One of the most effective techniques is for the function to periodically conduct detailed reviews of contracts for services.
   1. CPA firms
   2. internal audit
   3. internal control
   4. accounts payable
10. The applicable control procedure for the threat of incomplete or inaccurate customer orders is:
    1. data entry edit checks
    2. segregation of duties
    3. data entry edit controls
    4. reconciliation of sales order with the picking ticket
11. The applicable control procedure for the threat of Uncollectible accounts in revenue cycle is:
    1. Aging of accounts receivable
    2. Credit limits

d. Specific authorization to approve sales to new customers

c. all of the above

12. Which document is used to establish a contract for the purchase of goods or services from a supplier?
    1. vendor invoice
    2. purchase order
    3. purchase requisition
    4. disbursement voucher
13. The following is(are) a red flag(s) that would identify suppliers likely to represent potential problems:
    1. The supplier’s address is on the invoices.
    2. Entertainment expenses are high in terms of a percentage of the supplier’s gross sales.
    3. A large percentage of the supplier’s gross sales was to one company.
    4. A and B
    5. B and C

14. The document used to request that an item be ordered is the
    1. purchase order
    2. purchase requisition
    3. purchase advice
    4. purchase auction
15. The following lists the quantity and description of each item included in the shipment:
    1. picketing ticket
    2. bill of lading
    3. sales order
    4. packing slip
16. The   applicable   control   procedure    for   the   threat   of   incomplete   or inaccurate customer orders is:
    1. credit limits
    2. segregation of duties

d. data entry edit controls

c. reconciliation of sales order with the picking ticket

Answer 1

1.c.approving vendor invoices

Use of IT and engineering eliminates vendor invoices through ERS(Evaluated Receipt Settlement) system which is a invoice less system.

2.d.Billing

Billing is a revenue cycle activity which can be elimnated through the use of technology of ERS which is a self billing aystem as both the customer as well as seller know all the data included in an invoice.

3.b.the purchase order with the receive report.

ERS schedules the payment amount by reconciling the purchase order with the receiving report.It elimantes the vendor invoice.

4.a.lockboxes

The use of lockboxes eliminate the delays involved in processing customer payments and then depositing them.It also improves control as customer payments are not directly handled by any employees.

5.c.Purchase order

Purchase order involves an offer to buy goods,it establishes a contract for the purchase of goods and services from a supplier.