Consider the Following Revenue Cycle Scenario: the Company Has Been

question 68

Multiple Choice

Consider the following revenue cycle scenario: The company has been exposed to customer dissatisfaction and the suggested control procedure to be implemented is to install and use bar-code scanners.What is the threat?

• A)The company may be shipping the wrong merchandise.
• B)The company may be shipping the wrong quantities of merchandise.
• C)The company may be shipping orders to the wrong address.
• D)All of the above threats may apply to this scenario.

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Definitions:

Corporations

Legal entities that are separate and distinct from their owners, established to conduct business, earn profit, and be endowed with legal rights.

Adjusting Entries

Journal entries made at the end of an accounting period to update accounts for accruals and deferrals not yet recorded through daily transactions.

Closing Entries

Entries made at the end of an accounting period to transfer the balances of temporary accounts to a permanent owner’s equity account, Owner’s Capital.

Correcting Entries

Entries to correct errors made in recording transactions.