Question 1

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...

Question 2

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 3

A form of fraud in which the payments made by one customer are systematically applied to the account of another is called:
A) lapping
B) malfeasance
C) pre-posting
D) knitting

Accepted Answer

The term lapping refers to a fraudulent technique where payments received from one customer are applied to the account of another customer in order to conceal an embezzlement. So, option A is the correct choice. Option B, malfeasance refers to illegal or dishonest activity carried out by a person in authority, option C, pre-posting is not a term used in the context of accounting fraud, and option D, knitting is not a term used in the context of financial fraud.

Question 4

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...

Question 5

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 6

In the billing function described in the text, the control plan that contributes to effective operations is:
A) edit the shipping notification for accuracy
B) independent billing authorization
C) compare input shipping notices to sales order master data
D) review shipped not billed sales orders (tickler file)

Accepted Answer

Reviewing shipped not billed sales orders (tickler file) ensures that all shipments are billed in a timely manner, contributing to effective operations by preventing revenue loss and maintaining accurate financial records.

Question 7

The control independent billing authorization ensures that bills:
A) are accurate
B) are for goods that were picked in the warehouse
C) are for goods actually ordered by the customer
D) have authorized prices

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 8

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...

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

______________________________ 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 11

Which control is most effective in contributing to the goal of ensure input accuracy in the billing function?
A) compare input shipping notices to sales order master data
B) batch sequence checks
C) confirm input acceptance
D) review shipped not billed sales orders (tickler file)

Accepted Answer

Comparing input shipping notices to sales order master data is the most effective control as it ensures that the data entered into the billing system matches the actual sales order, reducing the risk of errors and inaccuracies. Batch sequence checks and confirming input acceptance are also important controls but are not as effective in ensuring input accuracy. Reviewing shipped not billed sales orders (tickler file) is a detective control and is not as effective as preventive controls like comparing input shipping notices to sales order master data.

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:
A) collection agency advance
B) lock-boxing
C) Factoring
D) Funding

Accepted Answer

Factoring is the process of selling accounts receivable to a financial organization, called a factor, at a discount in exchange for immediate cash. This allows the company to receive cash sooner and reduces the cost and time spent in collecting payments from customers. A collection agency advance is a type of loan to cover unpaid accounts while lock-boxing is a process of collecting and depositing payments directly into a designated bank account. Funding is a general term for providing financial resources.

Question 13

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 14

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

Accepted Answer

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

Question 15

Which control plan for the cash receipts function has as its primary control goal to ensure security of resources?
A) reconcile bank account regularly.
B) enter cash receipts close to where cash is received.
C) immediately endorse incoming checks.
D) one-to-one checking of deposit slips and checks.

Accepted Answer

Immediately endorsing incoming checks ensures that the checks are only deposited into the company's bank account and not diverted elsewhere, thereby ensuring the security of resources. The other options, while important controls, do not directly address the security of resources.

Question 16

The cash receipts process can be accelerated by using the ACH network because it is:
A) an immediate process
B) a periodic process
C) a type of EFT process
D) a batch process

Accepted Answer

The ACH network is a type of electronic funds transfer (EFT) process that allows for the transfer of funds from one bank account to another. Using the ACH network can accelerate the cash receipts process because it eliminates the need for physical checks and allows for faster processing times compared to traditional check payments. However, it is not an immediate process, and batches of transactions are typically processed at predetermined intervals.

Question 17

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 18

______________________________, 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...

Question 19

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 20

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:
A) electronic funds transfer
B) automated clearing house
C) Check 21
D) Lockbox

Accepted Answer

The method described is a lockbox service, which involves the customer mailing their payment to a designated post office box. The bank then collects and processes the payments, allowing for faster access to funds and improved cash flow management. Electronic funds transfer, automated clearing house, and Check 21 all involve electronic transactions and do not require physical checks to be mailed to a bank's postal address.

Quiz 11: The Billingaccounts Receivablecash Receipts Barcr Process

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

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.

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

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

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.

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

The control independent billing authorization ensures that bills:

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.

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

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

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

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

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

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

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

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

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

______________________________, 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.

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

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: