Term
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Definition
| a recurring set of business activities and related information processing operations associated with providing goods and services to customers and collecting cash in payment for those sales |
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Term
| two basic functions of the revenue cycle |
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Definition
- provide goods and services to customers
- collect cash in payment for those sales
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Term
| the revenue cycle's primary objective (4 things) |
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Definition
- provide the right product
- in the right place
- at the right time
- for the right price
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Term
| three basic functions of the AIS in the revenue cycle |
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Definition
- capturing and processing data about business activities
- storing and organizing that data to support decision making
- providing controls to ensure the reliability of data and the safeguarding of organizational resources
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Term
| 4 basic business activities performed in the revenue cycle |
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Definition
- Sales order entry,
- Shipping,
- Billing,
- Cash collections
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Term
| 4 aspects of sales order entry |
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Definition
- taking customer orders
- credit approval
- checking inventory availability
- responding to customer inquiries
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Term
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Definition
| notifies customers of the amount to be paid and where to send the payment |
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Term
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Definition
| customers typically pay according to each invoice. (Send 2, receive 1 with payment back from customer) |
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Term
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Definition
| turnaround document, the invoice received back from the customer |
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Term
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Definition
| customers typically pay according to the amount shown on a monthly statement, rather than by individual invoices |
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Term
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Definition
| lists all transactions including both sales and payments, that occurred during the past month and informs customers of their current account balances |
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Term
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Definition
| monthly statements are prepared for subsets of customers at different times |
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Term
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Definition
| authorizes crediting a customer’s account |
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Term
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Definition
| document identifying the names and amounts of all customer remittances |
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Term
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Definition
| postal address to which customers send their remittances |
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Term
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Definition
| bank electronically sends the company information about the customer account number and the amount remitted as soon as it receives and scans the customer checks |
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Term
| Electronic Funds Transfer (EFT) |
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Definition
| customers send their remittances electronically to the company’s bank and eliminate the delay associated with the mail system. Only transfers funds, not other remittance data |
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Term
| Financial Electronic Data Interchange (FEDI) |
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Definition
| integrates the exchange of funds (EFT) with the exchange of remittance data (EDI) |
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Term
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Definition
| contains information about item numbers, quantities, prices, and other terms of the sale. |
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Term
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Definition
| an interactive technique using a sales order entry system that allows customers to customize products to meet their exact needs |
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Term
| 3 benefits of choiceboards |
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Definition
- increases sales
- less capital needs to be tied up in carrying a large inventory of finished goods
- build-to-order model allows companies to collect all or part of the payment in advance
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Term
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Definition
| electronic data interchange |
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Term
| vendor-managed inventory (VMI) |
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Definition
| using EDI to assume responsibility for managing a retail customer's inventory. The retailer provides the supplier with access to data from the retailer's point-of-sale (POS) system |
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Term
| point-of-sale (POS) system |
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Definition
| a system that tracks what inventory is sold |
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Term
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Definition
| lost sales due to understocked inventory |
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Term
| benefits of VMI arrangements |
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Definition
to retailers:
- save money by outsourcing the costs associated with inventory management
- reduces the likelihood of stockouts
to manufacturers
- more accurate sales forecasts enable them to optimize production and delivery schedules
- the reduced likelihood of retailer stockouts increases total sales
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Term
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Definition
| improving efficiency and effectiveness in sales through technology |
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Term
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Definition
| a maximum allowable account balance for each customer based on the customer's past credit history and ability to pay |
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