ACCTMIS 3600 Exam 2 Questions and Answers Latest Update 2025-2026
5 business cycles - Answersrevenue cycle
expenditure cycle
production cycle
HR/payroll cycle
inventory, control and shipping cycle
Revenue Cycle - AnswersSet of business activities and related information processing operations
associated with:
providing goods/services
collecting cash payments
Primary objective of the revenue cycle - AnswersMaximizing 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 - AnswersEach organization defines their own control objectives
Examples of control objectives for the revenue cycle - AnswersAll valid sales are recorded and none
omitted
Sales are authorized according to company policy
Recorded sales are valid and documented
Level 0 functions of the revenue cycle - Answers1. 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) - AnswersUsually 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? - AnswersTo reduce human error and allow the customers to enter
data themselves
Two main tables for sales order information - AnswersSales order header and sales order item
Sales order header - AnswersRefers to a specific customer - tied to customer master
Sales order item - AnswersRefers to product or item master table
When should credit sales be approved? - AnswersBefore the order is processed further than sales order
entry
2 types of authorization in sales order entry (1.2) - Answers1. General Authorization
2. Specific Authorization
General Authorization - AnswersCustomer is in good standing and automatically approved
Specific Authorization - AnswersFor 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) - AnswersCheck if there is sufficient inventory to fill order
and tell customer shipping time
If inventory is available - Answers1. Complete sales order
2. Update new quantity in inventory
3. Issue a picking ticket
4. Notify shipping, billing, inventory and customer
Picking ticket - AnswersDocument that lists item and quantity of inventory needed to be picked in the
warehouse
If there is not inventory available - Answers1. Initiate back order
2. Notify production or purchasing that more inventory is needed
Responding to any customer questions (1.4) - AnswersAll customer questions should be answered
before and after order - quality of customer service can be critical to company's success
, Website ordering - AnswersAutomating customer service; no human involvement, customer enters all
their own information
Kiosks - AnswersAutomating customer service; Customers order from app/device - think McDonald's
Choice boards and configuration websites - AnswersAutomating customer service; Sales order entry
(SOE) system that allows customers to customize their order
Electronic data interchange (EDI) - AnswersAutomating customer service; links company to customer for
direct shipping
ERP Systems - AnswersAutomating customer service; automatically issues sales orders and transmits this
to company
Vender managed inventory (VMI) - AnswersAutomating customer service; Company has visibility of
customer inventory levels and creates orders as needed - think suppliers of grocery stores
Scan-based trading (SBT) - AnswersAutomating customer service; Merchandise shipped based on
scanned sales data provided by customer
Outsourced order entry - AnswersAutomating customer service; Outsourcing sales order entry to
Amazon
Shipping (2.0) - AnswersProcess consisting of 2-3 steps:
1. Process order (sometimes)
2. Picking and packing the order
3. Shipping the order
Pick and pack (2.1) - AnswersSteps:
1. Picking ticket created during SOE, triggering process
2. Picking ticket identifies product, quantity and location
3. Warehouse employees record quantities picked
4. Picked inventory is transferred to shipping department
Shipping goods (2.2) - AnswersSteps:
1. Shipping department compares quantities of physical inventory, quantity on picking ticket and
quantity on sales order
2. Discrepancies may arise if: location/quantity of inventory is inaccurate
3. If discrepancy: back order is initiated
5 business cycles - Answersrevenue cycle
expenditure cycle
production cycle
HR/payroll cycle
inventory, control and shipping cycle
Revenue Cycle - AnswersSet of business activities and related information processing operations
associated with:
providing goods/services
collecting cash payments
Primary objective of the revenue cycle - AnswersMaximizing 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 - AnswersEach organization defines their own control objectives
Examples of control objectives for the revenue cycle - AnswersAll valid sales are recorded and none
omitted
Sales are authorized according to company policy
Recorded sales are valid and documented
Level 0 functions of the revenue cycle - Answers1. 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) - AnswersUsually 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? - AnswersTo reduce human error and allow the customers to enter
data themselves
Two main tables for sales order information - AnswersSales order header and sales order item
Sales order header - AnswersRefers to a specific customer - tied to customer master
Sales order item - AnswersRefers to product or item master table
When should credit sales be approved? - AnswersBefore the order is processed further than sales order
entry
2 types of authorization in sales order entry (1.2) - Answers1. General Authorization
2. Specific Authorization
General Authorization - AnswersCustomer is in good standing and automatically approved
Specific Authorization - AnswersFor 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) - AnswersCheck if there is sufficient inventory to fill order
and tell customer shipping time
If inventory is available - Answers1. Complete sales order
2. Update new quantity in inventory
3. Issue a picking ticket
4. Notify shipping, billing, inventory and customer
Picking ticket - AnswersDocument that lists item and quantity of inventory needed to be picked in the
warehouse
If there is not inventory available - Answers1. Initiate back order
2. Notify production or purchasing that more inventory is needed
Responding to any customer questions (1.4) - AnswersAll customer questions should be answered
before and after order - quality of customer service can be critical to company's success
, Website ordering - AnswersAutomating customer service; no human involvement, customer enters all
their own information
Kiosks - AnswersAutomating customer service; Customers order from app/device - think McDonald's
Choice boards and configuration websites - AnswersAutomating customer service; Sales order entry
(SOE) system that allows customers to customize their order
Electronic data interchange (EDI) - AnswersAutomating customer service; links company to customer for
direct shipping
ERP Systems - AnswersAutomating customer service; automatically issues sales orders and transmits this
to company
Vender managed inventory (VMI) - AnswersAutomating customer service; Company has visibility of
customer inventory levels and creates orders as needed - think suppliers of grocery stores
Scan-based trading (SBT) - AnswersAutomating customer service; Merchandise shipped based on
scanned sales data provided by customer
Outsourced order entry - AnswersAutomating customer service; Outsourcing sales order entry to
Amazon
Shipping (2.0) - AnswersProcess consisting of 2-3 steps:
1. Process order (sometimes)
2. Picking and packing the order
3. Shipping the order
Pick and pack (2.1) - AnswersSteps:
1. Picking ticket created during SOE, triggering process
2. Picking ticket identifies product, quantity and location
3. Warehouse employees record quantities picked
4. Picked inventory is transferred to shipping department
Shipping goods (2.2) - AnswersSteps:
1. Shipping department compares quantities of physical inventory, quantity on picking ticket and
quantity on sales order
2. Discrepancies may arise if: location/quantity of inventory is inaccurate
3. If discrepancy: back order is initiated
