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Exam

Name___________________________________

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) The accounts receivable management method typically used by credit card companies is 1)
A) postbilling. B) open-invoice.
C) monthly statement. D) balance forward.
Answer: D
Explanation: A)
B)
C)
D)

2) Which of the following is not true in terms of the revenue cycle? 2)

A) The Shipping department sends in the packing slip and the bill of lading to the billing process
for invoicing.
B) The billing process will update the customer master database.
C) The Mailroom is not involved in the billing process.
D) Sales orders are involved in the billing process.
Answer: C
Explanation: A)
B)
C)
D)

3) Which of the decisions below is not ordinarily found as part of the revenue cycle? 3)
A) What credit terms should be offered?
B) What are the optimal prices for each product or service?
C) How often should accounts receivable be subjected to audit?
D) How can customer payments be processed to maximise cash flows?
Answer: C
Explanation: A)
B)
C)
D)

4) Customers that send their payments electronically directly to the company's bank are using 4)
A) an electronic lockbox. B) procurement cards.
C) electronic data interchange (EDI). D) electronic funds transfer (EFT).
Answer: D
Explanation: A)
B)
C)
D)

1
5) A method for tracking accounts receivable that matches specific invoices and payments from the 5)
customer is called a(n) ________ method.
A) cycle billing B) open-invoice
C) balance-forward D) specific identification
Answer: B
Explanation: A)
B)
C)
D)

6) The sales order entry process involves a series of actions. Which of the following is the typical 6)
sequence in which these actions occur?
A) Approve credit, check inventory availability, and then take order.
B) Check inventory availability, take order, and then approve credit.
C) Take order, approve credit, and then check inventory availability.
D) None of the above sequence is correct.
Answer: C
Explanation: A)
B)
C)
D)

7) A type of business document in which part of the original document is returned to the source for 7)
further processing is called a ________ document.
A) closed-loop B) turnaround C) returnable D) feedback
Answer: B
Explanation: A)
B)
C)
D)

8) Which is the best control to prevent invoicing customers for the quantity ordered, which was more 8)
than the quantity shipped due to items on back order?
A) Use the information from the picking ticket to prepare the sales invoice.
B) Use the information from the packing slip to prepare the sales invoice.
C) Use the information from the bill of lading to prepare the sales invoice.
D) Use the information from the sales order to prepare the sales invoice.
Answer: B
Explanation: A)
B)
C)
D)

2
 9) The accounts receivable clerk destroys all invoices for sales made to family and friends and does 9)
not record the sales in the accounts receivable subsidiary ledgers. The family and friends usually
give the clerk cash as a 'thank you'. Which procedure will not prevent or detect this fraud?
A) Sequentially pre-number all invoices and prepare a sequence check at the end of each day.
B) Reconcile the accounts receivable control account to the accounts receivable subsidiary ledger.
C) Send monthly statements to all customers with balances owed.
D) Reconcile sales invoices in the billing department to the total debits to accounts receivable
subsidiary ledgers.
Answer: C
Explanation: A)
B)
C)
D)

10) In terms of the shipping process, which of the following databases are not updated when the goods 10)
are shipped?
A) Shipments database B) Inventory database
C) Customer master database D) Sales order database
Answer: C
Explanation: A)
B)
C)
D)

11) The document a customer returns with their payment and that identifies the source and the amount 11)
of the payment is called a
A) remittance list. B) remittance advice.
C) credit memorandum. D) debit memorandum.
Answer: B
Explanation: A)
B)
C)
D)

12) A company uses the method for tracking accounts receivable where customers pay according to 12)
individual sales invoices. This describes the ________ method.
A) open-invoice B) monthly statement
C) balance-forward D) cycle billing
Answer: A
Explanation: A)
B)
C)
D)

3
13) How is credit approval generally handled for established customers with a documented payment 13)
history?
A) General authorisation by a sales clerk.
B) Specific authorisation by the credit manager.
C) A new credit application is requested.
D) A formal credit check should be made for each sale.
Answer: A
Explanation: A)
B)
C)
D)

14) Key differences exist when an integrated enterprise resource planning (ERP) system replaces an 14)
existing AIS or legacy system. For example, ________ are more accurate and timely, enabling sales
order entry staff to provide customers more accurate information about delivery dates.
A) exception reports B) inventory records
C) cash receipts D) credit approval decisions
Answer: B
Explanation: A)
B)
C)
D)

15) The activities involved in soliciting and processing customer orders within the revenue cycle are 15)
known as the ________.
A) shipping order process B) revenue process
C) marketing process D) sales order entry process
Answer: D
Explanation: A)
B)
C)
D)

16) What is the basic document created in the billing process? 16)
A) Sales invoice B) Bill of lading C) Packing list D) Sales order
Answer: A
Explanation: A)
B)
C)
D)

17) Two documents usually accompany goods shipped to a customer. What are the two documents? 17)
A) A packing slip and a bill of lading B) An invoice and a sales order
C) A bill of lading and an invoice D) An invoice and a packing slip
Answer: A
Explanation: A)
B)
C)
D)

4
18) A monthly statement sent to customers serves a control purpose by 18)
A) summarising invoices and amounts due for customers.
B) providing an opportunity for customers to verify the balance owed and activity on the
account.
C) triggering the process to record a customer payment.
D) reminding customers of the balance due and due date.
Answer: B
Explanation: A)
B)
C)
D)

19) What is a typical procedure for processing sales orders from new customers or customers making a 19)
purchase that causes their credit limit to be exceeded?
A) General authorisation to approve the order is given to sales clerks.
B) Specific authorisation must be granted by the credit manager.
C) The sales clerk should order a report from a credit bureau before approving the order.
D) The sale should be rejected.
Answer: B
Explanation: A)
B)
C)
D)

20) In terms of a typical sales order entry process, which of the following is not true? 20)
A) Picking ticket is sent to the Warehouse.
B) Sales order is sent to other departments after checking inventory availability.
C) Back order requests are sent to Purchasing.
D) Copies of the sales order are sent to Shipping, Billing and the Warehouse.
Answer: D
Explanation: A)
B)
C)
D)

21) Which of the following documents would normally trigger the process to record a customer 21)
payment?
A) Customer monthly statement B) Sales invoice
C) Remittance advice D) Deposit slip
Answer: C
Explanation: A)
B)
C)
D)

5
22) Laz Chance wears rollerblades and headphones when he is at work at the Squishy Things Toy 22)
Company. He is a product packer. The headphones give him computer-generated instructions so
he knows the location of each item and quantity that should be included in the order. These
instructions are the equivalent of a
A) bill of lading. B) picking ticket. C) sales order. D) packing slip.
Answer: B
Explanation: A)
B)
C)
D)

23) The shipping department at Squishy Things Toy Company follows policies that determine which 23)
carrier will deliver orders according to the size, weight and destination of the shipment. It
maintains standing agreements with shippers that specify legal responsibility for the shipment
while it is in transit. The terms of the agreements are documented on
A) picking tickets. B) RFID tags. C) packing slips. D) bills of lading.
Answer: D
Explanation: A)
B)
C)
D)

24) To ensure proper separation of duties, only the ________ has authority to issue credit memos. 24)
A) accounts receivable supervisor B) credit manager
C) cashier D) controller
Answer: B
Explanation: A)
B)
C)
D)

25) In the revenue cycle, before a shipping notice is prepared, the shipping department personnel 25)
should match the inventory received from the warehouse to details from
A) sales order. B) picking tickets.
C) picking ticket and sales order. D) sales order and bill of lading.
Answer: C
Explanation: A)
B)
C)
D)

26) This document is a legal contract that defines responsibility for goods that are in transit. 26)
A) Packing slip B) Back order C) Bill of lading D) Picking list
Answer: C
Explanation: A)
B)
C)
D)

6
27) The accounts receivable department must know when customers pay their invoices, yet separation 27)
of duties controls dictate that the collection and recording functions be kept separate from each
other. What is a solution to this potential internal control problem?
A) Establish a lockbox arrangement with a bank.
B) Have mailroom personnel prepare a remittance list which can be forwarded to accounts
receivable.
C) Have customers send a remittance advice with their payment.
D) All of the above.
Answer: D
Explanation: A)
B)
C)
D)

28) Responding to customer enquiries and general customer service is an important aspect in the 28)
revenue cycle. Since customer service is so important, software programs have been created to help
manage this function. These special software packages are called
A) VMI systems. B) CRM systems. C) EDI systems. D) POS systems.
Answer: B
Explanation: A)
B)
C)
D)

29) Which document should always be included with a merchandise shipment to a customer? 29)
A) Packing slip B) Remittance advice
C) Picking ticket D) Sales invoice
Answer: A
Explanation: A)
B)
C)
D)

30) It has been discovered that credit sales have been made to customers with a poor credit rating. If 30)
this continues, the company will face increasing uncollectible receivables and losses due to bad
debts. Separation of duties between ________ and ________ should help resolve the problem.
A) credit approval; marketing B) marketing; accounts receivable
C) shipping; billing duties D) billing; credit approval
Answer: A
Explanation: A)
B)
C)
D)

7
31) Production and purchasing needs from the revenue cycle are sent to 31)
A) the production cycle and the expenditure cycle.
B) neither the production cycle nor the expenditure cycle.
C) the expenditure cycle only.
D) the production cycle only.
Answer: A
Explanation: A)
B)
C)
D)

32) A way to incorporate the advantages of electronic data interchange (EDI) with the electronic funds 32)
transfer (EFT) is
A) financial electronic data interchange (FEDI).
B) to use procurement cards.
C) an electronic lockbox.
D) e-commerce.
Answer: A
Explanation: A)
B)
C)
D)

33) A document typically encountered in the revenue cycle that is both an output document and a 33)
source document is the
A) customer purchase order. B) packing slip.
C) sales order. D) sales invoice.
Answer: D
Explanation: A)
B)
C)
D)

34) A company should check inventory quantities before accepting a sales order for all of the following 34)
reasons except to
A) verify the accuracy of the perpetual inventory records.
B) update inventory records to reduce the quantity available by the number of items ordered.
C) know which items may need to be back ordered.
D) inform the customer about availability and delivery times.
Answer: A
Explanation: A)
B)
C)
D)

8
35) In Wonderland, electric power is provided to consumers by the Power To The People Electrical 35)
Company, a local co-op. Each month PTTP mails bills to 70 000 households and then processes
payments as they are received. The customers are provided with a remittance advice, which is a
A) bill.
B) confirmation of the firm's privacy policy.
C) turnaround document.
D) warning that failure to pay by the due date will result in a late charge.
Answer: C
Explanation: A)
B)
C)
D)

36) Retail stores could send their orders directly to the manufacturer's sales order system in a format 36)
that would eliminate the need for data entry, using
A) electronic funds transfer. B) vendor-managed inventory.
C) point of sale. D) electronic data interchange.
Answer: D
Explanation: A)
B)
C)
D)

37) In the ________ method of tracking accounts receivable, customers pay according to the amount 37)
showing on their monthly statement and payments are applied against the total account balance.
A) remittance advice B) balance-forward
C) open-invoice D) specific identification
Answer: B
Explanation: A)
B)
C)
D)

38) Sad Clown Pyjamas is an internet-based wholesaler. The manager of Callow Youth Clothing 38)
received an order from Sad Clown and found that the wrong product had been shipped. He
repackaged the order and sent it back for a refund. When Sad Clown Pyjamas received the returned
product, they mailed a ________ to Callow Youth Clothing's manager.
A) remittance advice B) credit memo
C) packing slip D) letter requesting an explanation
Answer: B
Explanation: A)
B)
C)
D)

9
39) A(n) ________ system prepares and mails monthly statements to customers throughout the entire 39)
month, instead of just at the end of the month.
A) cycle billing B) open-invoice
C) balance-forward D) continuous
Answer: A
Explanation: A)
B)
C)
D)

40) What is the primary objective of the revenue cycle? 40)

A) To reduce outstanding accounts receivable balances through increased cash sales.
B) To provide the right product in the right place at the right time at the right price.
C) To maximise revenue and minimise expense.
D) To sell as much product as possible and/or to maximise service billings.
Answer: B
Explanation: A)
B)
C)
D)

41) The benefits of a lockbox arrangement with a bank are maximised when 41)
A) the bank deposits the payments and accesses the customer's information system to record the
payments.
B) the bank is located nearby to the company, so remittance advices can be delivered to the
company every day.
C) an arrangement is made with only one bank, so all remittance advices can be batched for
processing.
D) several banks around the country are used, in order to minimise the time payments spend in
the mail.
Answer: D
Explanation: A)
B)
C)
D)

42) Back orders from the revenue cycle are sent to 42)
A) the expenditure cycle only.
B) the production cycle and the expenditure cycle.
C) neither the production cycle nor the expenditure cycle.
D) the production cycle only.
Answer: A
Explanation: A)
B)
C)
D)

10
43) When a customer pays off the balance on an invoice, the payment is credited to the ________ file. 43)
A) cash receipts master B) customer master
C) sales transaction D) all of the above are correct
Answer: B
Explanation: A)
B)
C)
D)

44) Which database is not affected by the sales order entry process in the revenue cycle? 44)
A) Customer B) Inventory C) Cash receipts D) Sales orders
Answer: C
Explanation: A)
B)
C)
D)

45) Which of the following is not a basic activity of the revenue cycle? 45)
A) Sales order entry B) Receiving
C) Billing D) Shipping
Answer: B
Explanation: A)
B)
C)
D)

46) A sales clerk at an electronics store scanned the bar code for a low-cost set of headphones and then 46)
substituted a high-cost set of headphones for his friend, who paid the lower price. Which of the
following controls would best help to prevent this sort of fraud?
A) Separation of duties B) Limited physical access to bar codes
C) Use of RFID tags D) Physical inventory count
Answer: C
Explanation: A)
B)
C)
D)

47) The best solution for maintaining accurate automated perpetual inventory systems is to use 47)
A) RFID tags.
B) point-of-sale devices integrated with inventory records.
C) closed-loop verification when inventory is received from vendors and recorded.
D) periodic physical counts to reconcile with perpetual inventory records.
Answer: A
Explanation: A)
B)
C)
D)

11
48) What are the two documents that are required to trigger the billing process in the revenue cycle? 48)
A) None of the answers are correct B) Packing slip and sales order
C) Bill of lading and packing slip D) Bill of lading and sales order
Answer: D
Explanation: A)
B)
C)
D)

49) When a customer places an order (on account) for a certain product, what should be done before 49)
the order is checked for inventory availability?
A) Shipping should be notified of an order in process.
B) The sales order should be created and written to a file.
C) A picking list should be generated for the warehouse.
D) The customer's available credit should be checked.
Answer: D
Explanation: A)
B)
C)
D)

50) An arrangement where a bank receives customer payments through the postal system, scans the 50)
remittance advices, and transmits payment data to the business electronically is known as
A) electronic funds transfer (EFT). B) e-commerce.
C) an electronic lockbox. D) electronic data interchange (EDI).
Answer: C
Explanation: A)
B)
C)
D)

51) What is the document that is required to trigger the picking and shipping process in the revenue 51)
cycle?
A) Packing slip B) Sales order C) Picking slip D) Bill of lading
Answer: B
Explanation: A)
B)
C)
D)

52) Which process in the revenue cycle deals with the general ledger and reporting cycle directly? 52)
A) Billing B) Shipping
C) Cash collections D) Sales order entry
Answer: A
Explanation: A)
B)
C)
D)

12
SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.

53) Describe cycle billing and identify how an organisation might benefit by using cycle 53)
billing.
Answer: Cycle billing is spreading out the customer base so that a portion of the billing is
done each day to a group of customers. Credit card and utility companies use it
extensively because of their large customer bases. The advantage of this method is
that the billing load is dispersed and the cash flow of the company is evened out
dramatically.
Explanation:

54) The accounting information systems (AIS) must supply the information needed to evaluate 54)
performance of critical revenue cycle processes. List ten key metrics.
Answer: Response time to customer enquiries; percentage of customer issues satisfactorily
resolved customer enquiries
Time required to fill and deliver orders
Percentage of sales that require back orders
Customer satisfaction rates and trends
Analyses of market share and sales trends
Profitability analyses by product, customer, and sales region
Sales volume in both dollars and number of customers
Effectiveness of advertising and promotions
Sales staff performance
Bad debt expenses
Days receivable outstanding
Remittances processed daily.
Explanation:

55) How can electronic data interchange (EDI) facilitate the billing and accounts receivable 55)
process?
Answer: The basic document created in the billing process is the sales invoice. Many
companies still print paper invoices and send them to customers in the mail. Batch
processing of invoices may create cash flow problems because of the time it takes
invoices to flow through the regular mail system. Companies that use EDI can create
quicker turnaround for payment, and save costs by reducing paper handling and
processing. Depending on the number of invoices processed per year, these savings
can be significant.
Explanation:

56) Define and describe benefits of a CRM system. 56)

Answer: CRM stands for customer relationship management. Since customer service is so
important today, special CRM software packages have been created that support
this vital process. CRM systems help a company to organise detailed data about
customers so that a more personalised service can be given to them. A CRM system
may retain customer preferences and customer transaction history, which can be
used to suggest other products the customer may wish to purchase. The system
could also take a proactive marketing approach in contacting customers at certain
reorder points. A well-implemented CRM system can help the business achieve the
goal of turning satisfied customers into loyal customers.
Explanation:

13
57) What is a lockbox? Discuss the application of a lockbox and an electronic lockbox in the 57)
revenue cycle.
Answer: A lockbox is a postal address to which customers send their remittances. A
participating bank picks up cheques from a post office box and deposits them in a
company's account. The bank then sends remittance advices, an electronic list of all
remittances and photocopies of all cheques to a company. Having customers send
payments to a lockbox eliminates delays associated with processing customer
remittances before depositing them. Cash flow can be further improved by selecting
several banks around the country to maintain lockboxes, with locations chosen to
minimise the time customer cheques are in the mail. Similarly, establishing lockbox
arrangements with overseas banks reduces the time it takes to collect payments from
sales to international customers.

Information technology can provide additional efficiencies in the use of lockboxes.

In an electronic lockbox arrangement, a bank electronically sends company data
about a customer account number and an amount remitted as soon as it receives and
scans those cheques. This method enables a company to begin applying remittances
to customer accounts before photocopies of cheques arrive.
Explanation:

58) Describe typical credit approval procedures. 58)

Answer: Most business-to-business sales are made on credit. Key to revenue cycle success is
the approval of credit sales before they are processed and goods shipped. A part of
good control in this area is to establish a credit limit for customers. With new
customers, or when orders exceed a customer's credit limit, or the customer has a
past due balance, specific authorisation for the credit manager should specifically
authorise and approve further credit. The system can also be programmed to do a
limit check for each order processed to maintain further control in this area. Also,
marketing personnel should not make credit decisions, as a potential conflict of
interest is possible.
Explanation:

59) Describe the basic revenue cycle activities. 59)

Answer: The revenue cycle is 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. The basic activities in the revenue
cycle are: sales order entry soliciting and processing customer activities filling
customer orders and shipping merchandise invoicing customers and maintaining
customer accounts collections the cashier handles remittances and deposits them
in the bank accounts receivable personnel credits customer accounts for the
payments received.
Explanation:

60) Current and historical information is needed to enable management to make strategic 60)
decisions. Give at least three examples of these decisions.
Answer: Setting prices for products and services
Establishing policies regarding sales returns and warranties
Deciding what type of credit terms to offer
Determining the need for short-term borrowings
Planning new marketing campaigns.
Explanation:

14
 61) Describe the two methods to manage accounts receivable. 61)
Answer: Open-invoice system customers pay the invoice by returning a remittance advice
turnaround document and a check. Remittances are applied against specific open
invoices. The open-invoice method can be used to offer discounts for prompt
payments since invoices are individually tracked. However, such individual
tracking adds complexity in maintaining information. Balance-forward method
customers pay according to the amount shown on a monthly statement and
remittances are applied against the total outstanding balance. This method is used
by department stores typically where customers make a large number of smaller
dollar amount purchases.
Explanation:

ESSAY. Write your answer in the space provided or on a separate sheet of paper.

62) Discuss the revenue cycle threat of stockouts, carrying costs and markdowns.
Answer: Stockouts, carrying costs and markdowns are a threat in the sales order entry process. The problem with
stockouts is that when goods are not available to ship to customers, the business risks losing the sale to a
competitor that can provide the goods in a timely manner. The opposite problem can also occur where
excess inventory increases carrying costs, with the result that markdowns may be necessary in order to
sell the inventory. Two controls can be implemented to cope with this threat. One control that can be put
into place is to establish accurate inventory control. An AIS with real-time online capabilities can be
programmed to use the perpetual inventory method. This will ensure that accurate records are
maintained about the quantity of inventory for sale. This will eliminate mistakes in placing orders for
goods when a sufficient inventory amount is on hand. Periodic physical counts of inventory will also
verify the perpetual amounts recorded by the AIS. Another important control in this situation is that of
accurate sales forecasting. Proper marketing efforts should be made in conjunction with regularly
reviewing sales forecasts for accuracy. Such forecasts should be revised as necessary. Sales force
marketing efforts should be commensurate with inventory levels as well.

15
Answer Key
Testname: C7

1) D
2) C
3) C
4) D
5) B
6) C
7) B
8) B
9) C
10) C
11) B
12) A
13) A
14) B
15) D
16) A
17) A
18) B
19) B
20) D
21) C
22) B
23) D
24) B
25) C
26) C
27) D
28) B
29) A
30) A
31) A
32) A
33) D
34) A
35) C
36) D
37) B
38) B
39) A
40) B
41) D
42) A
43) B
44) C
45) B
46) C
47) A
48) D
49) D
50) C
16
Answer Key
Testname: C7

51) B
52) A
53) Cycle billing is spreading out the customer base so that a portion of the billing is done each day to a group of
customers. Credit card and utility companies use it extensively because of their large customer bases. The advantage of
this method is that the billing load is dispersed and the cash flow of the company is evened out dramatically.
54) Response time to customer enquiries; percentage of customer issues satisfactorily resolved customer enquiries
Time required to fill and deliver orders
Percentage of sales that require back orders
Customer satisfaction rates and trends
Analyses of market share and sales trends
Profitability analyses by product, customer, and sales region
Sales volume in both dollars and number of customers
Effectiveness of advertising and promotions
Sales staff performance
Bad debt expenses
Days receivable outstanding
Remittances processed daily.
55) The basic document created in the billing process is the sales invoice. Many companies still print paper invoices and
send them to customers in the mail. Batch processing of invoices may create cash flow problems because of the time it
takes invoices to flow through the regular mail system. Companies that use EDI can create quicker turnaround for
payment, and save costs by reducing paper handling and processing. Depending on the number of invoices processed
per year, these savings can be significant.
56) CRM stands for customer relationship management. Since customer service is so important today, special CRM
software packages have been created that support this vital process. CRM systems help a company to organise detailed
data about customers so that a more personalised service can be given to them. A CRM system may retain customer
preferences and customer transaction history, which can be used to suggest other products the customer may wish to
purchase. The system could also take a proactive marketing approach in contacting customers at certain reorder points.
A well-implemented CRM system can help the business achieve the goal of turning satisfied customers into loyal
customers.
57) A lockbox is a postal address to which customers send their remittances. A participating bank picks up cheques from a
post office box and deposits them in a company's account. The bank then sends remittance advices, an electronic list of
all remittances and photocopies of all cheques to a company. Having customers send payments to a lockbox eliminates
delays associated with processing customer remittances before depositing them. Cash flow can be further improved by
selecting several banks around the country to maintain lockboxes, with locations chosen to minimise the time
customer cheques are in the mail. Similarly, establishing lockbox arrangements with overseas banks reduces the time it
takes to collect payments from sales to international customers.

Information technology can provide additional efficiencies in the use of lockboxes. In an electronic lockbox
arrangement, a bank electronically sends company data about a customer account number and an amount remitted as
soon as it receives and scans those cheques. This method enables a company to begin applying remittances to customer
accounts before photocopies of cheques arrive.
58) Most business-to-business sales are made on credit. Key to revenue cycle success is the approval of credit sales before
they are processed and goods shipped. A part of good control in this area is to establish a credit limit for customers.
With new customers, or when orders exceed a customer's credit limit, or the customer has a past due balance, specific
authorisation for the credit manager should specifically authorise and approve further credit. The system can also be
programmed to do a limit check for each order processed to maintain further control in this area. Also, marketing
personnel should not make credit decisions, as a potential conflict of interest is possible.

17
Answer Key
Testname: C7

59) The revenue cycle is 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. The basic activities in the
revenue cycle are: sales order entry soliciting and processing customer activities filling customer orders and
shipping merchandise invoicing customers and maintaining customer accounts collections the cashier handles
remittances and deposits them in the bank accounts receivable personnel credits customer accounts for the payments
received.
60) Setting prices for products and services
Establishing policies regarding sales returns and warranties
Deciding what type of credit terms to offer
Determining the need for short-term borrowings
Planning new marketing campaigns.
61) Open-invoice system customers pay the invoice by returning a remittance advice turnaround document and a check.
Remittances are applied against specific open invoices. The open-invoice method can be used to offer discounts for
prompt payments since invoices are individually tracked. However, such individual tracking adds complexity in
maintaining information. Balance-forward method customers pay according to the amount shown on a monthly
statement and remittances are applied against the total outstanding balance. This method is used by department stores
typically where customers make a large number of smaller dollar amount purchases.
62) Stockouts, carrying costs and markdowns are a threat in the sales order entry process. The problem with stockouts is
that when goods are not available to ship to customers, the business risks losing the sale to a competitor that can
provide the goods in a timely manner. The opposite problem can also occur where excess inventory increases carrying
costs, with the result that markdowns may be necessary in order to sell the inventory. Two controls can be
implemented to cope with this threat. One control that can be put into place is to establish accurate inventory control.
An AIS with real-time online capabilities can be programmed to use the perpetual inventory method. This will ensure
that accurate records are maintained about the quantity of inventory for sale. This will eliminate mistakes in placing
orders for goods when a sufficient inventory amount is on hand. Periodic physical counts of inventory will also verify
the perpetual amounts recorded by the AIS. Another important control in this situation is that of accurate sales
forecasting. Proper marketing efforts should be made in conjunction with regularly reviewing sales forecasts for
accuracy. Such forecasts should be revised as necessary. Sales force marketing efforts should be commensurate with
inventory levels as well.

18
Another random document with
no related content on Scribd:
member need be only one-half the weight of the top one, as it will be
in tension and so acting as a tie. Silver spruce should be used
throughout.
A simple single-spar chassis, consisting of a hollow spar, is
shown by Fig. 30. A kingpost and bracing is fitted underneath the
spar, to counteract the tendency of the twisted skein to bow it. The
chassis should be (and this applies to all models) of piano wire of
from No. 17 s.w.g. to No. 18 s.w.g.
A twin-screw propeller-behind fuselage of the cantilever type that
is exceedingly strong, although more difficult than it appears to
construct, is shown by Fig. 31. This can be made exceedingly light
from a hollow spar (packed solid at the point where the kingposts are
let through), and braced with No. 35 s.w.g. piano wire. The bracing
is the difficult operation, as the tension on each wire requires to be
very delicately adjusted to maintain the truth of the spar.
The box-girder type of fuselage shown by Fig. 32 is more suited
to models which aim at an accurate representation of some
prototype. It is intricate in construction yet of neat appearance, the
difficulty being in the adjustment of the large number of bracing wires
necessary. The illustration gives a view of a Blériot type of fuselage,
J being a detail of the cross member and compression-strut joint.
Fig. 33 gives some spar sections which are in common use by
some of the crack aero-modellists. All spars should taper in a fore-
and-aft direction, so that it virtually becomes a cantilever. The
greatest cross-section should be one-third of the total length from the
front end of the spar.
Fig. 31

Fig. 32
 Fig. 33

Fig. 34
Figs. 31 to 34.—Various Forms of Fuselage
Another form of spar construction is that given by Fig. 34. Q
shows a spar fretted out, the sides being covered with a thin veneer
glued and cramped into place, and R the method of making a slotted
spar.
Fig. 35 is the simplest possible form of model aeroplane
fuselage, if such it can be called.
Choice of materials and the method of utilising them to the best
advantage, so that the machine is strong without being unduly
heavy, is a phase of model aeroplaning that calls for some care and
judgment. There is a very erroneous impression prevalent among
novices that packing-case wood or similar material is suited to the
requirements peculiar to model aeroplanes. Nothing could be farther
from the truth; and the fact that 50 per cent. of the total marks
awarded in competition are for design and construction should show
that this matter is of primary importance. The true test of any model
is the way it “stands up” to a nose dive, for then the care and
forethought of the builder in providing for anticipated eventualities
will manifest itself. It is to be feared that those who had lavished
much care and infinite pains in the scientific construction of models
were woefully handicapped in competition, the flimsy freak that could
flutter aloft for a minute or so, with three strands of rubber wound to
nearly breaking point, gaining priority over the properly built
machine.
There are three salient points to be borne in mind on which the
durability of the machine largely depends: (1) its capacity for
resisting the torque of the rubber motor; (2) of absorbing the shocks
of rough landing; and (3) the provision that has been made for the
rigid attachment of the various parts. If the machine is at fault with
regard to point one, fuselage distortion is likely to occur, and
resulting from this there will be lack of alignment of the surfaces and
attendant troubles. Point two calls for suitable bracing of the spar or
spars, and careful choice of timber. It is inadvisable to use wood of
square cross-section, an oblong section with the greatest
measurement placed vertically being preferable. If no arrangement
has been made to fix rigidly the wings, chassis, etc. (point 3), these
parts are likely to rock or sway when the machine is in the air, and so
occasion bad stability, apart from which a couple of landings would
shake the machine out of truth.

Fig. 35.—Simple Fuselage

To obviate these difficulties a knowledge of the strength of the
various timbers will be found useful, and there is appended a table of
the weights of various timbers. The writer prefers birch for fuselage
members over 3 ft. 6 in. in length. Although on the heavy side
compared with spruce, it will stand a great amount of rough usage.
Spruce is also suitable for fuselages up to this length, while maple is
more suited for main planes. Bamboo can be used more
efficaciously for cross members, struts, etc. Some model-makers
use bamboo for planes, the joint of the rib to the spar being by
means of glue and cross-binding. Although planes so built are
exceedingly strong, it is not possible to make quite so neat a job of
them as with spruce or maple.
Another method of building main planes is to use spruce or birch
spars with piano-wire ribs, these latter being bound to the former.
For single-spar models the main spar should be tapered fore and
aft from a point one-third of the length from the front of the machine.
Where it is necessary to pierce the spar of a model aeroplane for the
reception of a kingpost or other member, silk tape binding should be
used, the joint being soaked with clean, weak glue.
To resist fuselage distortion the spar must be suitably braced in a
lateral direction, the outrigger carrying the bracing wires being
situated just forward of the centre of the spar. No. 35 s.w.g. is quite
strong enough for fuselage bracing. Silk fishing-line or Japanese silk
gut is admirably suited for wing bracing, and is not so liable to stretch
as the tinned-iron or brass wire sometimes used. Piano wire is
generally used for elevators, tail planes, chassis, and propeller
shafts, of a gauge ranging from No. 17 s.w.g. to No. 22 s.w.g. A
clock-spring or piano-wire protector fitted to the nose of a model
aeroplane will also prevent a broken spar should it strike any object
during flight.
Fig. 36.—Built-up Plane

Fig. 37.—Wing Plans

 Fig. 38.—Types of Bearings

Fig. 38A.—Twin-screw Bearings

Weight of Woods Chiefly Used

Mahogany 35 lb. per cubic foot
Birch 45 ” ” ”
Maple 46 ” ” ”
Spruce 31 ” ” ”
 Bamboo 25 ” ” ”
Building Scale Models.—Models of well-known machines
should be built to correct proportions, if as perfect a resemblance as
possible is aimed at. The best way to do this is, of course, to adopt a
definite scale. The particular scale will depend principally on the size
the builder requires his model; but the size of the prototype must, of
course, be considered, because the large machines differ so much in
point of size.
Taking the span or width across the planes as the base from
which to start, it is assumed that the width of the model is desired to
be from 25 in. to 35 in., which is perhaps the best all-round minimum
and maximum to adopt. Then having decided on the prototype,
multiply the span of the real machine by a fraction, which brings the
model span somewhere between the two figures. For instance,
suppose it is desired to model an Antoinette monoplane, the span of
which is about 46 ft., and multiplying by ¾ the model span becomes
34½; therefore the scale is ¾ in. to the foot.
If the model is to be a Blériot, then as the original has a span of
28 ft., the model may be built to a scale of 1 in. to the foot. The
Wright machine has a span of 41 ft., so a model to ¾ in. to the foot
would have a span of 30¾ in. In this case, perhaps, 1-in. scale would
not be considered too large. Odd scales such as ⅞ in. to the foot
can, of course, be adopted; but whatever the scale is to be, the
model should be set out full-size on a sheet of cartridge paper, and
the scale drawn accurately at the foot. The ribs should be built up as
in Fig. 36.
In designing a rubber-driven model, absolute scale must of
necessity be departed from, except in the principal measurements
and in the distance of centres apart of spars and other important
members, which if not reproduced in their proper form and position
would mar the otherwise correct appearance of the machine. Many
of the spars will, of course, need to be increased in cross-sectional
dimension in order to make them of sufficient strength. Some
efficient wing plans are given by Fig. 37.
 Stated briefly, there are essentially three kinds of model
aeroplanes. First, the scale model, which is a reproduction to scale
of a real machine; second, a modified copy of a large machine,
which is so designed as to resemble in general form some well-
known prototype, while retaining by means of a suitable motor,
generally twisted rubber, some ability to fly; third, a machine which
does not in any way follow the lines of full-size machines, and is built
for flight only.
The first of these is essentially an exhibition model; it is more
often built either to illustrate points in the design and construction of
large machines, or to demonstrate the functions of the various parts
to technical classes, etc.
Scale models, as a rule, are unsatisfactory flyers, and if they fly
at all the flight is so short that little can be learned from their
performance.
Some serviceable types of bearings are given by Figs. 38 and
38A, on p. 31.
 CHAPTER IV
Practical Construction:
Carving Air-screws
One of the most important units of an aeroplane, whether full-size
or model, is the screw, since excellence of design with regard to the
other portions of the machine are rendered void if the means of
converting the power of the engine into work are inefficient.
The action of an air-screw may be likened to a bolt turning in a
nut (the screw being the bolt and the air the nut), the difference
being that whereas one turn of a bolt with, say, a Whitworth pitch of
14 threads per inch in a nut is bound to advance a distance equal to
the pitch = ¹/₁₄ in., an air-screw may only advance 75 per cent. of its
theoretical pitch, owing to the yielding nature of the air. This loss in
efficiency is called “slip,” and is usually expressed as a percentage
of the theoretical pitch. Thus a screw with a theoretical pitch of 4 ft.,
which possesses 75 per cent. efficiency, has an effective pitch of 3 ft.
That is to say, each turn of the screw will take the aeroplane forward
3 ft. If, however, the screw were working in a solid, it would advance
its theoretical pitch = 4 ft. A greater efficiency is obtainable with
screws working in water, owing to the difference in density of the two
media, namely, air is to water as 800: 1. Probably no air-screw has
yet exceeded 80 per cent. efficiency, 70 per cent. being a fair
average.
It may, perhaps, not be amiss to outline some of the factors
involved in the design of an air-screw. Having decided on the
diameter of it, the proportions of the block from which the screw is to
be carved are required. It is a very good rule to make the pitch from
one and a half to twice the diameter for single-screw machines, and
from two and a half to three times the diameter for twin-screw
machines. It is possible to use much longer-pitched screws with twin-
screw machines (it being understood that the screws revolve in
opposite directions), since the torque, or tendency of the screw to
capsize the machine in the opposite direction to which it revolves,
will be balanced. For the purposes of this chapter, however, it is
presupposed that a screw is required for a single-screw machine,
and a diameter of 12 in. has been decided on. One and a half times
12 in. gives 18 in. as the pitch. Remembering the formula for pitch,

(thickness of block)
P = 3¹/₇ × D × ———————— ,
(width of block)
where P = pitch, D = diameter of screw, and using a ratio of width of
blade to diameter of screw of 6: 1 (which gives 2 in. as the width of
block) gives
22 12 (thickness of block)
18 = —— × —— × ———————— ,
7 1 2
61
from which thickness of block = ·954 = — approx.
64

Fig. 39 Fig. 40
Fig. 41 Fig. 42

Fig. 43 Fig. 44

Fig. 45 Fig. 46
 Fig. 47 Fig. 48

Figs. 39 to 48.—Carving Air-screws.

The block may now be prepared from these dimensions.

American whitewood, silver spruce, mahogany, or walnut are the
most suitable woods to use. The block should be planed up true and
square, and a hole drilled axially through its geometrical centre. The
first operation is to rough the block out to the shape shown by Fig.
39, which shows the Chauvière type. Of course, other shapes may
be used as desired, but the method of manufacture is the same.
Now, with a flat chisel or woodworker’s knife pare the wood away
(see Fig. 40) until the hollow or concave side of the blade is formed
(see Fig. 41). The obverse side of the other blade is then similarly
treated (see Fig. 42), which clearly shows how the blade is hollowed
out.
Fig. 43 shows the method of forming the boss of the screw, and
Fig. 44 how the reverse or convex side of the blade is shaped. Fig.
45 shows the screw roughed out, and Fig. 46 indicates the glass-
papering operation.
At this stage the screw has to be balanced. This is of great
importance, since the screw that is unbalanced loses a great amount
of efficiency owing to the consequent vibration when it rotates. In full-
size practice it would be highly dangerous to use a screw that is not
balanced.
 A piece of wire is passed through the hole previously drilled, and
the heavier blade carefully glasspapered down (with No. 00
glasspaper to finish) until the screw poises in a horizontal plane. Fig.
47 shows the sort of brush to use for polishing, and Fig. 48 the
finished screw.
For models that require a good finish an excellent form of
construction (incidentally it may be remarked that full-size screws are
made in this way) is that shown by Fig. 49, the laminated type.
These laminated screws are exceedingly strong, as the grain, by
virtue of the splayed blanks, follows the blade. Screws carved from
the solid block are a trifle weak near the boss owing to cross grain.
The laminæ could be alternate layers of whitewood and mahogany,
which give a pleasing finish to the screw. A is an end view of a
carved screw.

Fig. 49.—Laminated Air-screw

The method of obtaining the pitch angles at various points along
a screw-blade is shown diagrammatically in Fig. 50. It will be obvious
that the pitch of a screw should be constant along the whole length
of blade, so that the air is deflected or driven back at a constant
velocity. An efficient screw will deliver a solid cylinder of air, whereas
an inefficient one delivers a tube of air.
If, for instance, the pitch at the propeller tip is 30 in., whilst at,
say, 3 in. from the centre it is only 25 in., obviously the tip of the
screw will be imparting a higher velocity to the air than the portion
approaching the boss, and thus this latter would be acting as a drag
upon the other portion.

Fig. 50.—Setting Out Pitch Angles

The method is to lay off a distance, equal to the pitch, to some
convenient scale, and to erect another line vertically and to the same
scale equivalent to the circumference of the disc swept by the
propeller, which may be called the peripheral line. Subdividing this
line into a convenient number of equidistant parts (three or four are
sufficient for screws up to 14 in. in diameter), and connecting up the
points so obtained to the right-hand end of the base line, gives the
pitch angles at the corresponding points of the blade. It is the
subtended angles which are required, as indicated by the arrows.
Templates should be cut to these angles (which, of course, are
the angles made with the axis) with which to check the angles along
the blade during construction. This checking is more necessary with
bentwood screws than with carved ones.
 CHAPTER V
Practical Construction:
Bending Air-screws
Great diversity of practice exists with regard to the construction of
model air-screws, some aero-modellists favouring small diameter
with long pitch, others long diameter and short pitch, and still others
who adhere to either bentwood or carved screws in either of the
above forms. Generally speaking, a screw with a large diameter in
proportion to short span has a short pitch, say one and a quarter
times the diameter, while those having a short diameter in relation to
span should have a fairly long pitch, from one and a half to twice the
diameter. It is a useful rule to make the diameter approximately one-
third the span of the machine for either single-screw or twin-screw
machines. This relation seems to give a very small effect on lateral
stability, whereas when the diameter is made larger, the machine
has a tendency to capsize laterally in the opposite direction to which
the screw revolves. This force is known as torque.
It can, however, be fairly claimed that, for a given torque or
turning power, better results are usually obtained with carved
screws, whether short or large ones are used. The writer personally
prefers a large diameter and short-pitched screw, because, as the
screw thrust is equal to the weight of air displaced, the larger the
screw the greater is the proportion of air driven back in proportion to
diameter. That is to say, double the diameter and four times the
volume of air is displaced for only a double expenditure of power.
Fig. 51.—Bentwood Screws
Fig. 52
 Fig. 53

Figs. 52 and 53.—Standard Types of Bentwood

Screws

It is difficult to speak positively on the question of the best speed

at which a screw should rotate, as the loading per square foot of
surface enters into the proposition. If a model has 1 sq. ft. of surface
for every ounce of its weight, there is a speed at which the main
surface will give a maximum of lift for a minimum of power, and a
screw must be fitted whose pitch, multiplied by its revolutions per
minute, equals the distance per minute the model should fly. If a
screw that is too fast is fitted the model will show a tendency to
“stall,” or ascend nose first, and if too slow a one is used the model
will appear to be under-powered.
The writer has outlined these points to emphasise the fact that no
definite rules, but only approximations, can be laid down, owing to
the large number of unknown quantities which would have to be
taken into consideration. As the aero-modellist, however, becomes
accustomed to puzzling out the many little problems connected with
model aeroplaning, he speedily diagnoses the complaint of a
refractory machine, and applies a remedy accordingly.