UNIVERSITY OF THE EAST - CALOOCAN CAMPUS
College of Business Administration
SY 2021 - 2022
BSA 3103 - Accounting Information System
NAME
Arnino, Niko R.
SECTION
BSA 3E
Module No.
Topic
CLASS ID:
DATE
20131113467
10/25/2021
:
4
Activity No.:
: The Revenue Cycle: Sales to Cash Collections
1
Short Answer
Answer each question in a clear and organized paragraph. Each paragraph should include a clear
and precise thought that directly addresses the questions. This activity is worth 30 points in total,
based on the rubric for this assessment to score your response found at the bottom of the
assignment.
1. The revenue cycle's primary objective is to provide the right product in the right
place at the right time for the right price. To accomplish that objective, management
must make what key decisions?
1) To what extent can and should products be customized
to individual customers' needs and desires?
2) How much inventory should be carried, and where
should that inventory be located?
3) How should merchandise be delivered to customers?
Should the company perform the shipping function
itself or outsource it to a third party that specializes in logistics?
4) What are the optimal prices for each product or service?
5) Should credit be extended to customers?
6) How much credit should be given to individual customers?
7) What credit terms should be offered?
8) How can customer payments be processed to maximize cash flow?
2. How can the risk of the theft of cash and customer checks be stolen be minimized?
There are 2 kinds of thefts: External theft is committed by someone outside your
business. It could be a fraudulent product return, shoplifting, or a break-in.
Tips for preventing external theft:

Provide excellent customer service. Attentive and helpful employees can deter
shoplifters.

Make sure that you can easily see all parts of the store. Security mirrors and
surveillance cameras will help your employees monitor the premises.

Keep track of your inventory and investigate any discrepancies.

Keep security in mind when making bank deposits. It’s a good idea to make your
deposits during the day and vary the time and the route you take to get to the
bank.

Install a security system and always respond to security alarms.
Internal theft is committed by someone inside your business. Internal theft includes
embezzlement, employee shoplifting and fraud. Although it can be hard to believe that a
trusted employee would steal from you, it is important to take precautions.
Tips for preventing internal theft:

Check references when hiring a new employee and consider requesting a criminal
record check.

Develop procedures that minimize the opportunity for internal theft (such as hiring
an independent bookkeeper or occasionally checking the books yourself).

Separate employees' duties. For example, the person responsible for receiving
cash should not be responsible for reconciling receipts.

Make each employee responsible for his/her own cash drawer.

Be clear and consistent when communicating your policies regarding internal theft
and deal with any issues quickly and fairly.
An effective theft prevention plan can help you identify risks and improve security.
Remember to keep your employees involved and provide them with the tools and
training they need to protect your business against theft.
3. Identify the four basic activities in the revenue cycle and their sub processes.
The four basic activities in the revenue cycle are order sales, shipping, billing and accounts
receivable entries, and cash billing entries.