Beruflich Dokumente
Kultur Dokumente
Chapter 14
Sales Cash receipts Sales returns and allowances Estimate of bad debts Write-offs of uncollectibles
Processing customer orders Generating sales orders Granting / checking credit Shipping goods Billing customers and recording sales
Documents in Sales
Customer purchase orders Sales orders Credit applications Picking sheets Shipping documents / bills of lading Invoices & remittance advices Monthly statements
Records in Sales
Cash Receipts
Generally treated as a separate journal rather than commingled with disbursements Good controls require separation of cash handling from accounting Typical is to have one person open the mail and list receipts, then separate
Sales R & A
Process: item is returned, credit memo is issued to A/R Documents: credit memos and sales r&a journal Important to track returns rather than just reduce sales
Write-Offs
Treated separately from credit memos Must have proper authorization on a write-off form No special journal though
Not treated the same way as A/R Creditor is the bank, not the cardholder Payment is electronic and quick Payment is reduced by bank fee, so expense is recorded as well
Most controls relate to transactions, not balances PERCV is recast (see chapter 6)
P & R not pertinent E & C the same Valuation has four components
Tests of Controls
Existence: examine sales invoices for supporting bill of lading Completeness: account for numerical sequence of shipping documents Accuracy: compare sales orders to approved price list Classification: examine whether expense account numbers are verified Timing: see completeness Posting: examine reconciliations of deposits to check listings
Vouch sales entries to shipping documents: finds non-existent sales Extract data about possible duplicate sales Shipments to non-existent customers harder to determine
Completeness of Sales
Less of a concern in substantive testing Can be tested by tracing pre-numbered shipping documents to journal Remember direction of testing
Accuracy of Sales
Select a sample of sales invoices Compare to price list Recompute extensions and footings Trace to journal entries to sales and A/R Can be greatly reduced if controls are effective
Timing of Sales
Trace shipping documents to sales journal for timing Test sample of sales transactions on year-end date two weeks for timing
Prelisting of checks Reconciliation of deposits to batches Checks restrictively endorsed Statements sent each month Returned statements and customer correspondence retained
Tests of Balances
Confirmations Tracing just as for sales Aging analysis Review sample to 100% of written-off debts Proof of Cash Lapping Cut-off