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Pe04c Answers

The document contains 31 true/false questions about accounting concepts related to inventory control, sales order processing, billing, cash receipts, and internal controls. It tests understanding of key documents like packing slips, bills of lading, invoices, and remittance advices. Correct answers are provided to indicate whether statements about roles, responsibilities, and relationships between different parts of the revenue and cash cycles are true or false.

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Marian Emmanuelle Cristobal
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195 views3 pages

Pe04c Answers

The document contains 31 true/false questions about accounting concepts related to inventory control, sales order processing, billing, cash receipts, and internal controls. It tests understanding of key documents like packing slips, bills of lading, invoices, and remittance advices. Correct answers are provided to indicate whether statements about roles, responsibilities, and relationships between different parts of the revenue and cash cycles are true or false.

Uploaded by

Marian Emmanuelle Cristobal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ALFREDO M.

VELAYO COLLEGE OF ACCOUNTANCY


UNIVERSITY OF SANTO THOMAS
PRACTICAL EXERCISES 4C

TRUE/FALSE

1. The packing slip is also known as the shipping notice.

ANS: F PTS: 1

2. The bill of lading is a legal contract between the buyer and the seller.

ANS: F PTS: 1

3. Another name for the stock release form is the picking ticket.

ANS: T PTS: 1

4. Warehouse stock records are the formal accounting records for inventory.

ANS: F PTS: 1

5. The purpose of the invoice is to bill the customer.

ANS: T PTS: 1

6. In most large organizations, the journal voucher file has replaced the formal general journal.

ANS: T PTS: 1

7. The cash receipts journal is a special journal.

ANS: T PTS: 1

8. In the revenue cycle, the internal control “limit access” applies to physical assets only.

ANS: F PTS: 1

9. In real-time processing systems, routine credit authorizations are automated.

ANS: T PTS: 1

10. In a computerized accounting system, segregation of functions refers to inventory control, accounts
receivable, billing, and general ledger tasks.

ANS: F PTS: 1
11. A written customer purchase order is required to trigger the sales order system.

ANS: F PTS: 1
12. Inventory control has physical custody of inventory.

ANS: F PTS: 1

13. The principal source document in the sales order system is the sales order.

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14. Sales orders should be prenumbered documents.

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15. Integrated accounting systems automatically transfer data between modules.

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16. If a customer submits a written purchase order, there is no need to prepare a sales order.

ANS: F PTS: 1

17. Sales return involves receiving, sales, credit, and billing departments, but not accounts receivable.

ANS: F PTS: 1

18. A remittance advice is a form of turn-around document.

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19. A bill of lading is a request for payment for shipping charges.

ANS: F PTS: 1

20. In point of sale systems, authorization takes the form of validation of credit card charges.

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21. The warehouse is responsible for updating the inventory subsidiary ledger.

ANS: F PTS: 1

22. In a manual system, the billing department is responsible for recording the sale in the sales journal.

ANS: T PTS: 1

23. The stock release document is prepared by the shipping department to provide evidence that the goods
have been released to the customer.

ANS: F PTS: 1
24. The accounts receivable clerk is responsible for updating the AR Control accounts to reflect each
customer sale.

ANS: F PTS: 1

25. When customer payments are received, the mailroom clerk sends the checks to the cash receipts clerk and
the remittance advices to the AR clerk.

ANS: T PTS: 1

26. Physical controls are imbedded in computer systems to control access to data.

ANS: F PTS: 1

27. Process controls are controls over the logic of the application.

ANS: T PTS: 1

28. In a basic technology revenue cycle system, a robust password control policy should be implemented.

ANS: T PTS: 1

29. In an integrated cash receipts system, the cash receipts clerk reconciles the checks and the remittance
advices and prepares deposit slips.

ANS: T PTS: 1

30. Multilevel security employs programmed techniques that permit simultaneous access to a central system
by many users with different access privileges but allows them to obtaining information for which they
lack authorization.

ANS: F PTS: 1

31. The POS environment places both cash and inventory at risk.

ANS: T PTS: 1

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