Term
| Transaction Processing System (TPS) |
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Definition
Sales recording systems, accounts receivable and cash collection systems, and the inventory tracking systems
to record, summarize, and report sales transactions |
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Term
| Customer (purchase) order |
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Definition
customer places an order with the company.
Seller refers to this same order as sales order. |
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Term
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Definition
| customer places an order with the company -- from the sellers perspective |
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Term
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Definition
documents the quantities and descriptions of items ordered.
used to pull items from shelves in warehouse |
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Term
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Definition
| prepared by the warehouse personnel, lists all items included in a shipment |
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Term
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Definition
| terms of the agreement between the company and the carrier |
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Term
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Definition
| a chronological listing of shipments that allows management to track the status of sales and to answer customer inquiries regarding order status. |
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Term
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Definition
provides details of the sale and requests payment
when customer is billed, A/R records should update the sales journal (Dr A/R, Credit Sales) |
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Definition
| lists the chronological sequence of all returned items |
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Term
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Definition
| a source document completed by personnel in the receiving dock that documents the quantity and condition of items received. |
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Term
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Definition
documents the return and adjusts the amount of the customer's credit status -- journal of credit memos
prepared in Sales department |
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Term
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Definition
| the documentation accompanying payment that identifies the customer account number and invoice to which payment applies |
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Term
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Definition
list of the checks that have come in on that day; check number, payer and the amount
prepared in Mailroom, forwarded to Cash Receipts, A/R, and controller |
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Term
| Electronic Data Interchange (EDI) |
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Definition
system that communicates sales documents electronically with a standard business format.
Uses ANSI X.12
1) Header data
2) Trailer data
3) Labeling interchanges
4) Data segments |
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Term
| Standard business format used in EDI |
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Definition
ANSI X.12
1) Header data - contain information about the file or transmission, identifies the beginning and end of a particular transaction data set
2) Trailer data - contain data about the file or transmission and identify the end of a particular transaction data set
3) labeling interchanges - identify the type of transactions in the set
4) Data segments - include the actual data w/in the invoices, such as quantities and prices |
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Term
| Point of Sale System (POS) |
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Definition
capture all relevant sales data at the point of sale: the cash register
prices are determined by accessing of inventory and price list data, sales revenue recorded, and inventory values updated |
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Term
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Definition
1) Pricing errors for products sold
2) Cash overage or shortage of errors
3) Errors in inventory changes
4) Erroneous or invalid sales voids or deletions |
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Term
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Definition
Business-to-consumer
"The electronic buying and selling of goods and services"
“B2C commerce breaks down the barriers of time, place and form – expanding markets and increasing competitiveness within industries.” |
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Term
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Definition
business-to-business electronic sales
"The electronic processing and transmission of business data"
“B2B commerce shifts entities away from the traditional, single independent enterprise viewpoint towards a more collaborative, inter-enterprise view, creating a more efficient and effective business environment.” |
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Term
| E-commerce and E-business |
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Definition
E-commerce = electronically enabled transaction between a business and its trading partners
E-business = electronically enabled transactions between a business and its trading partners as well as
- servicing customers and suppliers
-trading information with customers and suppliers and,
- electronic recording and control of internal processes |
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Term
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Definition
is the process of user identification to ensure that only authorized users are accessing the IT system
user ID, password, security tokens, two factor authentication |
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Term
Business processes common in company-to-company sales are: |
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Definition
1.Collect order data from customer.
2.Deliver goods.
3.Record receivable and bill customer.
4.Handle product returns.
5.Collect the cash.
6.Update records, such as
Øsales journal
Øcash receipts journal
accounts receivable subsidiary ledger |
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Term
Characteristics indicating risk with respect to revenue processes: |
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Definition
ØFrequent changes made to sales prices or customers.
ØPricing structure is complex or based on estimates.
ØLarge volume of transactions.
ØOne or few key customers.
ØShipments not controlled directly by the company.
ØProduct mix is difficult to differentiate.
ØShipping and/or recordkeeping at multiple locations. |
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Term
Circumstances which may indicate high level of risk for returns |
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Definition
ØQuantities of returns are difficult to determine.
ØHigh volume of credit memo activity.
ØProduct prices change frequently, or pricing structure is otherwise complex.
ØReturns are received at various locations, or issuance of credit memos may occur at different locations.
ØOne or few key customers.
ØReturns not controlled directly by the company. |
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Term
Circumstances that may indicate risks to cash collections. |
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Definition
ØHigh volume of cash collections.
ØDecentralized cash collections.
ØLack of consistency in the volume or source of collections.
ØPresence of cash collections denominated in foreign currencies. |
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Term
| Advantages of e-commerce include |
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Definition
1.Reduced cost
2.Shorter sales cycles
3.Increased accuracy and reliability of sales data
4.Increased potential market for products and services |
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Term
Risks related to Internet Sales include: |
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Definition
Security and Confidentiality
1.Unauthorized access.
2.Hackers or other network break-ins.
3.Repudiation of sales transactions.
Processing Integrity
4.Invalid data entered by customers.
5.Incomplete audit trail.
6.Errors when integrating data into back end systems.
Availability
7.Hardware and software system failures that block customers from access to the website.
8.Virus and worm attacks.
9.Denial-of-service attacks by hackers.
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Term
Advantages to an EDI system within the revenue and cash collection processes: |
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Definition
1.Reduction or elimination of data keying.
2.Elimination of keying errors.
3.Elimination of costs related to keying errors.
4.Elimination of time needed to key in orders.
5.Elimination of mail delays.
6.Elimination of postage costs.
7.Reduction in inventory levels.
8.Competitive advantage through better customer service.
9.Preservation of business with existing customers who have adopted EDI. |
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Term
Point of Sale systems, features that assist accountants and managers: |
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Definition
1.Touch screen menus.
2.Bar code scanning.
3.Real-time access to inventory and price data.
4.Credit card authorizations during the sale.
5.Real-time update of cash, sales, and inventory records.
6.Immediate summaries and analyses.
7.Integration with the company’s general ledger system. |
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