Tag: Accounting

The following describes the processes which make up the sales system in operation at Big Staffie and Co.

For the process described below, select whether it represents a strength, a deficiency, a minor change or no change of the sales system.

• Customer queries are dealt with by reception staff.

Select ONE answer:

1. Deficiency
2. Minor Change
3. No Change
4. Strength

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct => This option is correct as the reception staff are unconnected with any of the departments with whom customers might have a query – ordering, warehouse or accounts.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The following describes the processes which make up the sales system in operation at Big Staffie and Co.

For the process described below, select whether it represents a strength, a deficiency, a minor change or no change of the sales system.

The order automatically generates a message to the distribution centre (which dispatches the goods). It simultaneously informs the accounts department, which immediately raises an invoice and sends it to the customer.

Select ONE answer:

1. Minor Change
2. No Change
3. Strength
4. Deficiency

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct => Applies as there is no link between dispatch and invoice (goods could be invoiced without being dispatched), and there is no link between order and dispatch (orders may not be fulfilled).

This work is licensed under a Creative Commons Attribution 4.0 International License.

The following describes the processes which make up the sales system in operation at Big Staffie and Co.

For the process described below, select whether it represents a strength, a deficiency, a minor change or no change of the sales system.

– Orders are placed by telephone. When a call is received, the person receiving the order checks the customer’s credit status and that the customer’s current balance is below the maximum level, checks that the item is in inventory, and then immediately inputs the order into the system.

Select ONE answer:

1. Minor Change
2. No Change
3. Strength
4. Deficiency

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct => This process is a strength of the sales system
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following controls does not prevent misappropriation of customers’ remittances?

Select ONE answer:

1. Segregation of duties between cash handling and recording
2. Investigation of differences between till records and cash collected
3. Post opening by two people
4. Regular banking

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct => Investigation of differences between the till records and cash collected is not a preventative control activity but a detective activity, i.e., it happens after the fact.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following controls best mitigates the risk that customers might not be able to pay?

Select ONE answer:

1. Authorisation of credit terms to customers by a senior finance professional
2. Use of a standard template to prepare the invoices
3. Obtaining customers’ signatures on delivery documentation
4. Regular preparation of trade receivables statements

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct => Authorisations of credit terms to customers will mitigate risk. The first three options are incorrect because they are procedures that occur after the customer has made the purchase.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.