ACCTMIS 3600 EXAM 2 2025 QUESTIONS
AND ANSWERS
5 business cycles - ANS revenue cycle
expenditure cycle
production cycle
HR/payroll cycle
inventory, control and shipping cycle
Revenue Cycle - ANS Set of business activities and related information processing operations
associated with:
providing goods/services
collecting cash payments
Primary objective of the revenue cycle - ANS Maximizing inflow of revenues by providing the
right product in the right place at the right time for the right price
Control objective of the revenue cycle - ANS Each organization defines their own control
objectives
Examples of control objectives for the revenue cycle - ANS All valid sales are recorded and
none omitted
Sales are authorized according to company policy
Recorded sales are valid and documented
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,Level 0 functions of the revenue cycle - ANS 1. Sales order entry
2. Shipping
3. Billing
4. Cash collection
1&2: Providing goods and/or services
3&4: Collecting cash payments
Sales order entry (1.0) - ANS Usually performed by the sales order department and processes
include:
1. Take customer's order
2. Check customer's credit
3. Check inventory availability
4. Respond to customer inquiries (may be done by customer service or sales order entry)
Why do we have sales order entry? - ANS To reduce human error and allow the customers to
enter data themselves
Two main tables for sales order information - ANS Sales order header and sales order item
Sales order header - ANS Refers to a specific customer - tied to customer master
Sales order item - ANS Refers to product or item master table
When should credit sales be approved? - ANS Before the order is processed further than
sales order entry
2 types of authorization in sales order entry (1.2) - ANS 1. General Authorization
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, 2. Specific Authorization
General Authorization - ANS Customer is in good standing and automatically approved
Specific Authorization - ANS For new members, customers with remaining balances, or those
whose purchase exceeds their credit limit; requires additional approval
What do you do after credit is approved? (1.3) - ANS Check if there is sufficient inventory to
fill order and tell customer shipping time
If inventory is available - ANS 1. Complete sales order
2. Update new quantity in inventory
3. Issue a picking ticket
4. Notify shipping, billing, inventory and customer
Picking ticket - ANS Document that lists item and quantity of inventory needed to be picked
in the warehouse
If there is not inventory available - ANS 1. Initiate back order
2. Notify production or purchasing that more inventory is needed
Responding to any customer questions (1.4) - ANS All customer questions should be
answered before and after order - quality of customer service can be critical to company's
success
Website ordering - ANS Automating customer service; no human involvement, customer
enters all their own information
3 @COPYRIGHT THEBRIGHT 2025/2026
AND ANSWERS
5 business cycles - ANS revenue cycle
expenditure cycle
production cycle
HR/payroll cycle
inventory, control and shipping cycle
Revenue Cycle - ANS Set of business activities and related information processing operations
associated with:
providing goods/services
collecting cash payments
Primary objective of the revenue cycle - ANS Maximizing inflow of revenues by providing the
right product in the right place at the right time for the right price
Control objective of the revenue cycle - ANS Each organization defines their own control
objectives
Examples of control objectives for the revenue cycle - ANS All valid sales are recorded and
none omitted
Sales are authorized according to company policy
Recorded sales are valid and documented
1 @COPYRIGHT THEBRIGHT 2025/2026
,Level 0 functions of the revenue cycle - ANS 1. Sales order entry
2. Shipping
3. Billing
4. Cash collection
1&2: Providing goods and/or services
3&4: Collecting cash payments
Sales order entry (1.0) - ANS Usually performed by the sales order department and processes
include:
1. Take customer's order
2. Check customer's credit
3. Check inventory availability
4. Respond to customer inquiries (may be done by customer service or sales order entry)
Why do we have sales order entry? - ANS To reduce human error and allow the customers to
enter data themselves
Two main tables for sales order information - ANS Sales order header and sales order item
Sales order header - ANS Refers to a specific customer - tied to customer master
Sales order item - ANS Refers to product or item master table
When should credit sales be approved? - ANS Before the order is processed further than
sales order entry
2 types of authorization in sales order entry (1.2) - ANS 1. General Authorization
2 @COPYRIGHT THEBRIGHT 2025/2026
, 2. Specific Authorization
General Authorization - ANS Customer is in good standing and automatically approved
Specific Authorization - ANS For new members, customers with remaining balances, or those
whose purchase exceeds their credit limit; requires additional approval
What do you do after credit is approved? (1.3) - ANS Check if there is sufficient inventory to
fill order and tell customer shipping time
If inventory is available - ANS 1. Complete sales order
2. Update new quantity in inventory
3. Issue a picking ticket
4. Notify shipping, billing, inventory and customer
Picking ticket - ANS Document that lists item and quantity of inventory needed to be picked
in the warehouse
If there is not inventory available - ANS 1. Initiate back order
2. Notify production or purchasing that more inventory is needed
Responding to any customer questions (1.4) - ANS All customer questions should be
answered before and after order - quality of customer service can be critical to company's
success
Website ordering - ANS Automating customer service; no human involvement, customer
enters all their own information
3 @COPYRIGHT THEBRIGHT 2025/2026
