Chapter 14 - Chapter 14 Multiple-Choice Questions 1. easy d...

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Chapter 14 Multiple-Choice Questions 1. Which of the following is not an account affected by the sales and collection cycle? easy a. Cash d b. Accounts receivable c. Allowance for doubtful accounts d. Gross margin 2. easy Which of the following is not one of the five classes of transactions included in the sales and collection cycle? d a. Sales returns and allowances b. Charge-off of uncollectible accounts c. Bad debt expense d. Depreciation expense 3. What event initiates a transaction in the sales and collection cycle? easy a. Receipt of cash. d b. Delivery of product to a customer. c. Identification of a new customer. d. Customer request for goods. 4. A _________ is a document that indicates a request for merchandise by a customer. easy a. sales invoice c b. vendor invoice c. customer order d. sales order 5. easy A _________ is a document that communicates the description, quantity, and related information for goods ordered by a customer. a a. sales order b. customer order c. vendor invoice d. sales invoice 6. What critical event must take place before goods can be shipped? easy a. Determination of correct delivery address b b. Credit approval c. Receipt of cash d. Receipt of sales order from the customer 7. Before goods are shipped on account, a properly authorized person must: easy a. prepare the sales invoice. c b. approve the journal entry. c. approve the customer’s credit. d. verify that the unit price is accurate. Arens/Elder/Beasley
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8. A document prepared to initiate shipment of the goods sold is the: easy a. sales order. b b. bill of lading. c. sales invoice. d. customer order. 9. The document used to indicate to the customer the amount of a sale and payment due date is the: easy a. sales invoice. a b. bill of lading. c. purchase order. d. sales order. 10. At what point in the sales and collection cycle does the company first give up assets? easy a. Sales approval d b. Credit approval c. Cash collection d. Shipment of goods 11. Most companies recognize sales revenue when: easy a. sales are invoiced. c b. customer orders are received. c. goods are shipped. d. customer orders are approved. 12. Which of the following is not a business function within the “Sales” class of transactions? easy a. Processing customer orders. c b. Granting credit. c. Processing and recording sales returns and allowances. d. Shipping goods. 13. The total of the individual account balances in the accounts receivable master file equals the: easy a. total sales for the period. d b. balance of the sales account in the general ledger. c. total sales less the total cash received for the period. d. balance of the accounts receivable account in the general ledger. 14. easy A listing of amounts owed by customer which shows how long each component part has been due is the: d a. trial balance. b.
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Chapter 14 - Chapter 14 Multiple-Choice Questions 1. easy d...

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