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Chap007 - Chapter 07 The Revenue and Collection Cycle...

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Chapter 07 - The Revenue and Collection Cycle Chapter 07 The Revenue and Collection Cycle Multiple Choice Questions 1. To be recognized, revenues must also be realized or realizable and A. Foreseeable B. Collected C. Earned D. Shipped Difficulty: Easy Source: Original 2. The SEC requires all of the following for revenue to be recognized except Difficulty: Medium Source: Original 3. "Bill and Hold" refers to an arrangement where A. Sales are recorded but are not shipped B. Sales are shipped but are not recorded C. Sales are billed but not collected D. Inventory is held but not billed Difficulty: Hard Source: Original 7-1
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Chapter 07 - The Revenue and Collection Cycle 4. Custody of inventory is transferred to the shipping area upon authorization of: Difficulty: Easy Source: Original 5. The document that generates recording of a sale is the Difficulty: Medium Source: Original 6. The sum of customers' unpaid balances that is compared to the general ledger balance comes from A. A total of sales invoices B. A total of shipping orders C. The sales journal D. The accounts receivable trial balance Difficulty: Easy Source: Original 7. The file that contains sales transactions that were initiated in the system but are not yet completed is the: Difficulty: Easy Source: Original 7-2
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Chapter 07 - The Revenue and Collection Cycle 8. The assertion that auditors will probably emphasize in the revenue and collection cycle is: Difficulty: Easy Source: Original 9. A small business owner can best offset the lack of segregation of duties by Difficulty: Medium Source: Original 10. Accountants should be under orders to record sales and accounts receivable when A. The customer's order is received B. All supporting documentation of shipping is in order C. The item has been paid for D. The terms are agreed upon Difficulty: Easy Source: Original
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