How is credit check in advance technology is different from credit check in basic technology
Answers
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A customer order usually in the form of a purchase order initiates the sales process
Distinguish between a packing slip, a shipping notice, and a bill of lading.
The packing slip travels with the goods to the customer, and it describes the contents on the order. Upon filling the order, the shipping department sends the shipping notice to the billing department to notify them that the order has been filled and shipped. The shipping notice contains additional information that the packing slip may not contain, such as shipment date and carrier and freight charges. The bill of lading is a formal contract between the seller and the transportation carrier; it shows legal ownership and responsibility for assets in transit.
What function does the receiving department serve in the revenue cycle?
The receiving department counts and inspects items that are returned by customers. The receiving department prepares a return slip, copies of which go to the warehouse for restocking, and to the sales order department so that a credit memo can be issued to the customer.
The general ledger clerk receives summary data from which which departments? What form of summary data?
The general ledger clerk receives a total of all sales from the billing department in the form of a summary journal voucher. The accounts receivable department sends an account summary of the individual accounts receivable so that the accounts receivable control account can be verified against the accounts receivable ledger. The inventory control department sends summary information in the form of a journal voucher that reflects the total reductions of inventory in financial terms and the associated charges to cost of goods sold.
What are three authorization controls?
a. credit checks
b. returns policy for granting cash refunds and credits, and
c. cash prelists providing verification that customer checks and remittance advices match in amount.
What are the three rules that ensure that no single employee or department processes a transaction in its entirety?
The three rules that ensure segregation of functions are:
a. Transaction authorization should be separate from transaction processing.
b. Asset custody should be separate from asset record keeping.
c. The organization structure should be such that the perpetration of a fraud requires collusion between two or more individuals.
At which points in the revenue cycle are independent verification controls necessary?
a. Shipping department—verifies that the correct amount and types of goods are sent from the warehouse by reconciling the stock release document and the packing slip.
b. Billing department—reconciles the shipping notice with the invoice to ensure that customers are appropriately billed.
c. GL clerks—reconcile journal vouchers from various departments such as the billing department, the accounts receivable department, and inventory control
What is the purpose of physical controls?
The purpose of physical controls is to control the actions of people.
How can we prevent inventory from being reordered automatically each time the system detects a low inventory level?
once an item is on order, control should be in place to ensure that it is not ordered again until the original order has been received from the supplier. One method of accomplishing this is to "flag" the inventory item "on order" by entering a value (e.g., the number of items ordered) in the on-order field of the inventory record. This field has a value of zero when the item in question is not on order.
Distinguish between an edit run, a sort run, and an update run.
An edit run is the first run; it detects most data entry errors. Only "clean" data progresses to the sort run. The sort run sequences the transaction records according to its primary key field and possibly a secondary key field. Once the data is sorted, the update program posts the transactions to the appropriate corresponding records in the master file. During a sequential update, each record is copied from the original master file to the new master file regardless of whether the balance is affected
What are the key features of a POS system?
A point of sale system immediately records both cash and credit transactions and inventory information. The sales journal, accounts receivable, and inventory accounts may be updated in real-time, or a transaction file may be used to later update a master file.