What is the basic document created in

the billing process?

Your Answer: Packing slip

Correct Answer: Sales invoice

Incorrect. For some

companies, this is a copy of
the picking ticket.

2. If a company sells to
customers on account, the
company has to send
statements to customers
requesting payment. The
format of the bill and the
method of applying
payments to purchases
depend on the method
chosen for maintaining
accounts receivable. If a
company applies payments
made by customers to
specific purchases, then the
company must be using the
__________ method.

Your Answer: monthly

statemen
t
Correct open
Answer: invoice

Incorrect. This shows the

customer their outstanding
balance.

3. Which document is used by

warehouse personnel to
assemble the goods for
shipment?

Your Answer: Bill of

lading
Correct Answer: Picking
ticket

Incorrect. This is a legal

document generated in the
shipping process that show
among other things, legal
custody of items in transit.
4. The act of arranging with
the bank to receive and
deposit customer payments,
along with reporting
remittances to the
company, constitutes a
__________.

Your Answer: none of

the
above
Correct Answer: lockbox

Incorrect. One of the

answers is correct.

5. Who should be responsible

for establishing the credit
limit for new customers, or
increasing an existing
customer's credit limit?

Your Answer: Credit

manager

CORRECT.

6. Which of the following

provide useful information
for evaluating current credit
policies and for deciding
whether to increase the
credit limit for specific
customers?

Your Answer: Cash

budget
Correct Accounts
Answer: receivabl
e aging
schedule

Incorrect

7. Which of the following are

threats to the billing
 function?

Your Answer: Shipping

errors
Correct Failure to
Answer: bill
customer
s

Incorrect. This is a threat in

the shipping function.

8. Which of the following is a

legal contract that defines
responsibility for goods that
are in transit?

Your Answer: Bill of

lading

CORRECT.

9. Which of the following are

valid edit checks for
recording a customer's
order?

Your Answer: Field

checks
on
quantitie
s
Correct All of the
Answer: above

Incorrect. This is one of the

edit checks used.

10. Which of the following

processes in a DFD would
interact with the inventory
data store?

Your Answer: Sales

order
entry
Correct Answer: Three of
the
above
 Incorrect. This process
interacts with inventory.

11. Threats during the sales

order entry process include:

Your Answer: the billing

departme
nt
invoices
for the
wrong
amount.
Correct incomplet
Answer: e or
inaccurate
customer
orders.

Incorrect. This is a threat

during the billing cycle.

12. Segregation of duties is

most important when
dealing with cash. Which of
the following activities
violates proper segregation
of duties?

Your Answer: None of

the above
violate
proper
segregati
on of
duties.
Correct Answers a
Answer: and b
violate
segregati
on of
duties.

Incorrect. There is a correct

answer.

1. Billing errors include pricing mistakes and sending the wrong

merchandise to the customer.
 Your Answer: True
Correct Answer: False

Incorrect.

2. A back order is created when inventory doesn't exist to fill a

customer order.

Your Answer: False

Correct Answer: True

Incorrect.

3. A sales order triggers the shipping process.

Your Answer: True

CORRECT

4. A write-off to a customer account is different than a credit

memo.

Your Answer: True

Correct Answer: False

Incorrect.

5. A credit memo is generated by the receiving department after a

customer has returned merchandise.

Your Answer: True

Correct Answer: False

Incorrect.

List the four basic business activities performed in the revenue cycle.
Your Answer:
sale order enrty
 The four basic
business activities
performed in the
revenue cycle are

1. Sales
order
entry;
2. Shipping;
3. Billing and
accounts
receivable
; and
4. Cash
Collection
s.

2. Describe the
activities involved
in the shipping
process
Your Answer:
shipping
billing

The shipping
activity involves
filling customer
orders and
shipping the
merchandise. The
process consists of
picking and
packing the
inventory and
shipping the order.

3. A well-designed
AIS should provide
adequate controls
over the revenue
cycle to ensure
what objectives?
Your Answer:
rght
product
at riht
place at
righ
price
 The following
objectives must be
met to ensure
adequate controls
in the AIS exist
with respect to the
revenue cycle:

1. All
transactio
ns are
properly
authorized
2. All
recorded
transactio
ns are
valid
(actually
occurred)
3. All valid,
authorized
transactio
ns are
recorded
4. All
transactio
n are
recorded
accurately
5. Assets
(cash,
inventory,
and data)
are
safeguard
ed from
loss or
theft
6. Business
activities
are
performed
efficiently
and
effectively

Which of the following

accurately depicts the
components of an accounting
information system?

Your Answer: People,

procedures, and
information
technology
 CORRECT.

2. Which of the following is not one of

the three important functions that
an accounting information system
performs?

Your Answer: It collects and

stores data
about activities
and transactions
so that the
organization can
review what has
happened in the
business.
Correct Answer: It assures that
management's
decisions
optimize the
profitability of
the company.

Incorrect. This is an important

scorekeeping function of an
accounting information system.

3. Identify the two basic strategies

noted in the text.

Your Answer: Low cost producer

strategy and
product/service
differentiation
strategy

CORRECT.

4. Identify the three strategic positions

which an organization might adopt.

Your Answer: Access-based,

needs-based,
and product
based
Correct Answer: Variety-based,
access-based,
and needs-
based
 Incorrect. You are guessing. Please
review Michael Porter's work in
Chapter 1.

5. Which of the following is not one of

the primary activities in the value
chain of an organization?

Your Answer: Outbound

Logistics
Correct Answer: Purchasing

Incorrect. This is one of the five

primary activities in the value chain.

6. Which of the following is not one of

the support activities in the value
chain of an organization?

Your Answer: Purchasing

Correct Answer: Service

Incorrect. This is one of the four

support activities in the value chain.

7. While an accounting information

system supports each of the
organization's primary activities in
the value chain as well as many of
the support activities, it can only be
categorized into one of the activities.
Into which activity is the accounting
information system categorized?

Your Answer: Purchasing

Correct Answer: Firm
Infrastructure

Incorrect. While the AIS supports

purchasing, it resides as part of the
firm infrastructure.

8. An accounting information system

adds value to an organization in
many ways. Which of the following
is not a way in which the AIS adds
 value?

Your Answer: Monitoring

outputs for
defects to
increase product
quality
Correct Answer: All of the above
are ways in
which an AIS
adds value to
the organization.

Incorrect. This function of the AIS

adds value to the organization.

9. What is data?

Your Answer: All of the facts that

are collected,
stored, and
processed by an
information system

CORRECT.

10. Listed below are the six

characteristics that make
information useful and meaningful.
Pick the characteristic that relates to
information's ability to reduce
uncertainty.

Your Answer: Understandable

Correct Answer: Relevant

Incorrect. This indicates that the

information is presented in a useful
and intelligible format.

11. In order for an accounting

information system to meet the
needs of systems users, one must
take into account the types of
decisions that are made. Decisions
vary from repetitive and routine to
nonrecurring and nonroutine. How
would you classify a decision where
no framework or model exists for the
 decision?

Your Answer: Unstructured

CORRECT.

12. While more is often considered

better, we reach a point at which our
human minds cannot effectively
absorb and process more
information. This condition is called:

Your Answer: Neural Collapse

Correct Answer: Information
Overload

Incorrect. You're just guessing!