Ais Financing Cycle

INTRODUCTION

C HAPTER 10
The Revenue Cycle: Sales to Cash Collections

• Questions to be addressed in this chapter include:
– What are the basic business activities and data processing operations that are performed in the revenue cycle? – What decisions need to be made in the revenue cycle, and what information is needed to make these decisions? – What are the major threats in the revenue cycle and the controls related to those threats?
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© 2008 Prentice Hall Business Publishing

Accounting Information Systems, 11/e

Romney/Steinbart

INTRODUCTION
• The revenue cycle is a recurring set of business activities and related information processing operations associated with:
– Providing goods and services to customers – Collecting their cash payments

INTRODUCTION
• The primary objective of the revenue cycle:
– Provide the right product in the right place at the right time for the right price.

• The primary external exchange of information is with customers.

© 2008 Prentice Hall Business Publishing

Accounting Information Systems, 11/e

Romney/Steinbart

3 of 161

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Accounting Information Systems, 11/e

Romney/Steinbart

4 of 161

INTRODUCTION
• Decisions that must be made:
– Should we customize products? – How much inventory should we carry and where? – How should we deliver our product? – How should we price our product? – Should we give customers credit? If so, how much and on what terms? – How can we process payments to maximize cash flow?
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INTRODUCTION
• In this chapter, we’ll look at:
– How the three basic AIS functions are carried out in the revenue cycle, i.e.:
• Capturing and processing data. • Storing and organizing the data for decisions. • Providing