Question 1

Recording B/AR/CR event data is generally the responsibility of the accounts receivable department,which for good internal control typically reports to the ______________________________ function.

Accepted Answer

The answer of Recording B/AR/CR event data is generally the...

Question 2

______________________________,when applied to cash receipts,is the time between the payment by a customer and the availability of funds on deposit and available for use.

Accepted Answer

The answer of ______________________________,when applied to cash receipts,is the time...

Question 3

Which control is most effective in contributing to the goal of ensure input accuracy in the billing function?

Accepted Answer

Comparing input shipping notices to sales order master data is the most effective control in ensuring input accuracy in the billing function. This helps to ensure that the sales order data matches the actual shipments made, thus minimizing errors in billing. Batch sequence checks and confirming input acceptance are also important controls, but they do not specifically address input accuracy in the same way that comparing shipping notices does. Reviewing shipped not billed sales orders (tickler file) may help to identify errors after they have already occurred, but it is not a preventative control for ensuring input accuracy.

Question 4

The B/AR/CR process completes the order to cash process by accomplishing the activities of: ______________________________,managing customer accounts,and securing payment for goods or services rendered.

Accepted Answer

The answer of The B/AR/CR process completes the order to...

Question 5

The ______________________________ data is a repository of all unpaid invoices issued by an organization and awaiting final disposition.

Accepted Answer

The answer of The ______________________________ data is a repository of...

Question 6

A(n)______________________________ is a business document used to notify the customer of an obligation to pay the seller for merchandise which was ordered and shipped.

Accepted Answer

The answer of A(n)______________________________ is a business document used to...

Question 7

______________________________ systems are B2C systems that use a Web site to post customers' bills and to receive their electronic payments.

Accepted Answer

The answer of ______________________________ systems are B2C systems that use...

Question 8

A customer is instructed to send his remittance advice and check to a bank's postal address.This method for collecting customer cash receipts is called:

Accepted Answer

The method described in the scenario is known as a lockbox service. This is a service offered by banks where companies can have their customers send payments to a special address (the "lockbox") where the bank will collect and process the payments on the company's behalf. This is a way to speed up the cash collection process and reduce the time it takes for companies to receive their funds.

Question 9

In the organization structure shown in the text,although both report to the VP of Finance,the ______________________________ and ______________________________ functions should be segregated.

Accepted Answer

The answer of In the organization structure shown in the...

Question 10

Which control plan for the cash receipts function has as its primary control goal to ensure security of resources?

Accepted Answer

Immediately endorsing incoming checks ensures that the checks can only be deposited into the organization's account and prevents others from stealing or using the checks fraudulently. This control is focused on security of resources. The other options (A, B, D) are also important controls in the cash receipts function, but their primary focus is not on security of resources. A is focused on accuracy of the bank account balance, B is focused on efficiency in data entry, and D is focused on accuracy of the deposit process.

Question 11

Organizations should monitor ______________________________ to ensure that cash is received in a timely manner.

Accepted Answer

The answer of Organizations should monitor ______________________________ to ensure that...

Question 12

To reduce the cost of collecting its accounts receivable,a company sells its accounts receivable to a financial organization.The service is called:

Accepted Answer

Factoring is the process of selling accounts receivable to a financial organization at a discount to reduce the cost of collecting them. This allows the company to receive money faster and transfer the credit risk to the factor company. Collection agency advances, lock-boxing, and funding are different methods of managing accounts receivable and do not involve selling them to a third-party.

Question 13

A(n)______________________________ is a postal address,maintained by a third party-typically a bank-which is used solely for the purpose of collecting checks.

Accepted Answer

The answer of A(n)______________________________ is a postal address,maintained by a...

Question 14

A form of fraud in which the payments made by one customer are systematically applied to the account of another is called:

Accepted Answer

The term "lapping" specifically refers to the act of a dishonest employee applying a payment made by one customer to the account of another in order to conceal the theft of funds from the first customer. Malfeasance refers to any kind of wrongdoing or illegal activity committed by an individual in a position of authority or power. Pre-posting and knitting are not terms commonly associated with this specific type of fraud.

Question 15

Funds on deposit and available for use are known as ______________________________ funds.

Accepted Answer

The answer of Funds on deposit and available for use...

Question 16

There are two types of electronic bill presentment and payment (EBPP)systems the ______________________________ method and the consolidation/aggregation method.

Accepted Answer

The answer of There are two types of electronic bill...

Question 17

In the billing function described in the text,the control plan that contributes to effective operations is:

Accepted Answer

The answer of In the billing function described in the...

Question 18

A(n)______________________________ is a business document used by the payer to notify the payee of the items being paid.

Accepted Answer

The answer of A(n)______________________________ is a business document used by...

Question 19

The control independent billing authorization ensures that bills:

Accepted Answer

The control independent billing authorization ensures that bills are for goods actually ordered by the customer, which means that the customer has authorized the purchase. This control ensures that the company does not bill the customer for goods or services that they did not order, ensuring accuracy in billing. While accuracy, warehouse picking, and authorized pricing are important controls, they do not relate specifically to the issue addressed by the control independent billing authorization.

Question 20

The cash receipts process can be accelerated by using the ACH network because it is:

Accepted Answer

The ACH network is a type of EFT (Electronic Funds Transfer) process, which allows for electronic transfer of funds between bank accounts. This process is faster and more secure than traditional check processing methods, making it ideal for accelerating the cash receipts process. However, it is not an immediate process as it requires several steps to complete, including authorization and settlement. It is also not a periodic process or a batch process, as transactions can be initiated and settled on an individual basis.

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