Question

Which of the following statements is true?

a. In a pre-billing system, invoices are prepared after the goods have been shipped and the sales order notification has been matched to the shipping's billing notification.
b. In a post-billing system, invoices are prepared upon acceptance of the customer order.
c. Of the two types of billing systems discussed in the text, the pre-billing system requires the more accurate inventory records.
d. Of the two types of billing systems discussed in the text, the pre-billing system is appropriate in situations where there is a significant delay between acceptance of the customer's order and the subsequent shipment.

Answer 1

The correct statement is that pre-billing systems require more accurate inventory records because they prepare invoices prior to shipment, necessitating precise stock tracking.

Step-by-step explanation:

The true statement among the given options is: c. Of the two types of billing systems discussed in the text, the pre-billing system requires the more accurate inventory records. This is because pre-billing systems prepare invoices prior to shipping the goods, which means inventory levels need to be precisely tracked to ensure that invoicing corresponds to actual stock. On the other hand, post-billing systems generate invoices after goods are shipped or services are rendered and thus are less dependent on real-time inventory accuracy.

Option a describes a post-billing system rather than a pre-billing system, which is therefore incorrect. Option b incorrectly states that invoices are prepared upon acceptance of the customer order, which is generally not the case in most billing systems. Finally, option d suggests that pre-billing systems are suited for situations with a significant delay between order acceptance and shipment, which is not characteristic of pre-billing systems and is therefore incorrect.