The Revenue Cycle Consists of

question 51

Multiple Choice

The revenue cycle consists of

• A)one subsystem-order entry
• B)two subsystems-sales order processing and cash receipts
• C)two subsystems-order entry and inventory control
• D)three subsystems-sales order processing, credit authorization, and cash receipts

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Definitions:

Purchasing Supplies

The process of acquiring the goods and materials a company needs to operate.

Increases Liabilities

Refers to events or transactions that result in a rise in the amounts owed by a company, such as taking on new loans or issuing bonds.

Decreases Equity

Activities or transactions that reduce the owner's equity in a company, often through expenses, losses, or distributions to owners.

Earned Revenue

Earned revenue is income a company generates from its business activities, such as sales of goods or services, indicating work completed and value provided to customers.