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1. What is the sales and collection cycle also known as?
a) Revenue, Receivables, and Receipts (RRR) Cycle
b) Revenue, Recognition, and Receipts (RRR) Cycle
c) Revenue, Receivables, and Reconciliation (RRR) Cycle
d) Revenue, Recognition, and Reconciliation (RRR) Cycle
**a) Revenue, Receivables, and Receipts (RRR) Cycle**
Rationale: According to Corporate Finance Institute , the
sales and collection cycle is composed of various classes of
transactions that involve sales revenue, accounts
receivable, and cash receipts.
2. What is the first step in the typical business process of
the sales and collection cycle?
a) The customer files a purchase order
b) The sales department prepares a sales order
c) The credit department approves the customer and the
order
d) The shipping department generates a shipping document
**a) The customer files a purchase order**
Rationale: According to Corporate Finance Institute , the
process usually begins when a customer approaches the
company and files a customer purchase order.
3. What is the name of the document that the shipping
department generates when sending out goods to
customers?
a) Sales invoice
b) Bill of lading
c) Sales order
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