Which points in the revenue cycle are independent verification controls necessary?
The shipping department is the only point in the revenue cycle where independent verification controls are necessary The receiving department is responsible for receiving customer orders in the revenue cycle
What is the revenue cycle in accounting?
Revenue cycle is a method of defining and maintaining the processes used for completion of an accounting process for recording of revenue generated from services or products provided by the company which include the accounting process of tracking and recording transaction from beginning, normally which starts from
What are the fundamental tasks performed in the revenue cycle?
REVENUE CYCLE BUSINESS ACTIVITIES Four basic business activities are performed in the revenue cycle: sales order entry, shipping, billing, and cash collection
What are revenue cycle source documents?
Revenue Cycle Source Document Function Sales order Record customer order Delivery ticket Record delivery to customer Remittance advice Receive cash Bill of lading the price + freight + insurance ), terms of payment (some companies record cash sales in cash receipts j)
Which document typically triggers the three way match?
Which document typically triggers the three-way match? Supplier’s invoice triggers the process of recording the liability, because till that point of time no financial event has occurred Hence, the correct option is d
Which type of control is considered a compensating control?
Supervision control is considered as compensating control Compensating control is meant for the safety and reduces attacks
What are the three 3 common source documents for the revenue cycle?
Three (3) The concept of the revenue cycle: (1) Sales order processing, (2) Sales return procedures, (3) Cash receipts processes
What are the three steps in the revenue cycle?
You’ll also learn about the three main steps in the cycle: patient scheduling, registration and treatment, claims processing and payment collection
What are revenue controls?
A revenue control and management policy establishes proper control over all receipts and receivables and helps ensure sound financial management practices Governments should adopt a revenue control and management policy over revenues as an integral component of their overall financial policies
What are the three authorization controls?
The three authorization controls for the valid transactions are as follows: A sale is completed on credit (authorization) A money repayment is demanded (authorization) Redistribution money disbursement acknowledged to a customer’s account (cash-prelist)
What are the internal control objectives in the revenue cycle?
The common objectives of these internal controls are to: Ensure that all sales are billed and that all billings are recorded Control the risks associated with extending credit Prevent loss or theft of assets, particularly cash or cheques
What are three benefits of an integrated revenue cycle?
LCDs communicate the circumstances under which covered services are deemed medically necessary See tables 914 and 915 in text What are three benefits of an integrated revenue cycle? Reduced cost to collect, performance consistency, and coordinate strategic goals
What are the 5 major transaction cycles?
The basic exchanges can be grouped into five major transaction cycles Revenue cycle—Interactions with customers Expenditure cycle—Interactions with suppliers Production cycle—Give labor and raw materials; get finished product Human resources/payroll cycle—Give cash; get labor Financing cycle—Give cash; get cash
What are the five source documents?
What are source documents and why are they important? Bank Statements Payroll Reports Invoices Leases & Contracts Check Registers Purchase Orders Deposit Slips – not included on a bank statement Check Copies – not included on a bank statement
What are the five business activities in revenue cycle?
What Are the Five Stages of the Revenue Cycle? Selling Product or Service The revenue cycle starts when a company prepares to sell a product or service to a customer Documenting an Order Delivering Product or Service Billing Collections
What is the 3-way matching for accounts payable?
A three-way match is the process of comparing the purchase order; the goods receipt note and the supplier’s invoice before approving a supplier’s invoice for payment
What is SAP 3-way match?
A three-way match is an accounting control that ensures that the purchase order, inventory receipt, and invoice all match in terms of product, quality, quantity and price The process starts when purchasing creates an order and sends it to a vendor
What are the three documents involved in the checking process?
Thus, the “three-way match” concept refers to matching three documents – the invoice, the purchase order, and the receiving report – to ensure that a payment should be made The procedure is used to ensure that only authorized purchases are reimbursed, thereby preventing losses due to fraud and carelessness
What are compensating controls give three examples?
Examples of Compensating Controls A single employee has the duties of accepting cash payments, recording the deposit, and reconciling the monthly financial reports To prevent errors and/or fraud, additional oversight is required
What are corrective controls?
Corrective controls are designed to correct errors or irregularities that have been detected Preventive controls, on the other hand, are designed to keep errors and irregularities from occurring in the first place Controls may be automated, manual or hybrid
What is directive control?
Directive Controls are actions taken to cause or encourage a desirable event to occur They are broad in nature and apply to all situations
What is source document explain any three?
What Does Source Document Mean? Some common examples of source documents include sales receipts, checks, purchase orders, invoices, bank statements, and payroll reports These are all original documents that were created from a transaction and the first component in an accounting system
What are types of source document?
What are types of source document? Checks Invoices Receipts Credit memos Employee time cards Deposit slips Purchase orders
What are common source documents?
A source document describes all the basic facts of the transaction, such as the amount of the transaction, to whom the transaction was made, the purpose of the transaction, and the transaction date Common source documents include: Canceled checks Invoices
What is the third step in the billing revenue cycle?
Step 3: Claim Submission and Denial Management The next step in revenue cycle management is submitting a claim Once you have completed the charge capture process, it is then up to you to submit the accurately coded claim to the payer
What are the steps in revenue cycle?
The seven steps of revenue cycle include preregistration, registration, charge capture, claim submission, remittance processing, insurance follow-up and patient collections
What are the steps in the revenue cycle quizlet?
Terms in this set (6) first step determine marketing/distribution channels to generate sales receive and accept orders third step deliver goods/services to customers fourth step billing credit customers and collecting payment fifth step collecting from customers sixth step provide support after sale