Sales Cycle

Revenue Cycle Introduction As an external auditor who audits the financial statements of Fraser & Neave Holdings Berhad, he has to ensure the Fraser & Neave’s financial statement reflects true and fair view accordance with approved accounting standards. To access the accounting system and internal controls starting point is Revenue Cycle.

Sales cycle is the process businesses use to describe the financial progression of company’s accounts receivables from the beginning which the company acquire product to the end of cycle when the company received cash payments from customers in cash or within credit terms if there is credit sales of products. The sales accounting system of such an entity is relatively unaffected by whether the merchandise is acquired from others. Thus Sales cycle is a recurring set of business activities and related information processing operations associated with providing goods and services to customers and collecting their cash payments.

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The primary objective of the sales cycle is providing the right product in the right place at the right time for the right price. Credit sales An order entry function is starting point in the credit sales cycle. Under this function orders received, accepted and then translated into shipping and billing instructions. Order entry may or may not be integrated with the accounting system. The original order may be a written purchase order mail in by a customer, or be taken over the phone or through electronic lodgment by mechanism such as the Internet.

Sales order At this point, a decision needs to be made concerning whether to accept the order. Specific approval of credit department my required, there may be a list of approved customers determined by the credit department; or credit limits may be established that are checked by order entry. The availability of the items ordered is also established by checking the inventory records for the level of inventory items currently on hand. Shipping order After an order accepted, a shipping order is sent to the shipping department nd a copy of this report is used as record of backlog orders (orders no completed) and a routine review of it helps to prevent loss of order. Physical control of the forms used as shipping orders and physical inspection of shipments for a shipping document help to prevent unauthorized shipments. Invoicing functions The invoicing function is usually the first department involved in the sequence that is part of the accounting department. The invoicing department is responsible for ensuring that a sales invoice is sent to bill the customer.

Usually, a sales invoice is a multipart form, the original is mailed to the customer and duplicates are used to notify other department within the business. The flow creates the debit to accounts receivable. The individual sales of invoice are one of the inputs to accounts receivable processing. Sales invoices are used to update the accounts receivable master file. The invoicing department also compares a total of bills prepared. This total is sent to the general ledger function to become the debit to the accounts receivable control account.

The totals sent to the general ledger function should not go through the accounts receivable function. If this separation is maintained, a reconciliation of the control account with the total of the accounts receivable master file can be a key control in the in the auditor’s assessment of control risk. Cash collection cycle Is the next step in the cycle and several function may involved. The first step is opening mail and creating initial record of cash received. This function may be performed by a receptionist, although greater control occurs if two people are present at the mail opening.

The important consideration from a control viewpoint is that this function should be separate from other functions which involve handling and keeping cash and recording in the accounts receivable master file. The person responsible for opening mail creates a prelist of cash receipts, which is simply a list of the amounts received and from whom they were received, and this is usually used strictly for control purposed. Mail receipts are usually accompanied by a remittance advice, which is often a tear-off portion of the sales invoice that is returned by customer.

The remittance advices and payments (usually cheques) are sent to the cashier function, where the cashier prepares the bank deposit slip. The remittance advices are sent to the accounts receivable function become the input for posting to the accounts receivable subsidiary ledger. The total of remittance advices is sent to the general ledger function to update the accounts receivable control account in the general ledger. Sales Cycle Internal Control Procedure Common risks associated with the sales cycle. 1. Authorization and accuracy of the contracts with clients * Unauthorized rates or prices are quoted. Extension of credit terms to customers who represent unacceptable credit risks to the company. * Orders may be accepted/contracts concluded from/with related parties without management’s knowledge or at unacceptable prices or terms. * Orders may be accepted at prices or on terms that violate governmental laws and regulations. 2. Providing services/shipping * Goods may be shipped or services delivered to the wrong party. * The wrong goods or services or the wrong quantity of goods or services may be shipped or delivered. Fictitious or otherwise invalid shipments or services may be made or provided. 3. Billing * Goods sold or services provided may not be initially recorded and reported. * Records of sales or services provided may be lost and therefore not billed. * Incomplete invoicing of services and goods delivered to customers. * Invoices are raised on an untimely or inaccurate basis leading to payment delays. * Sales may be recorded for goods and services that were not delivered. * Invoices may not be priced from an authorized source. * Incorrect billings may be issued due to clerical or mechanical errors. Invoices may not be summarized and posted on a timely basis. 4. Accounts receivable * Ineffective collections of receivables from customers. 5. Cash receipts * Non-recording of cash receipts. Incorrect application of cash receipts to the subsidiary ledger. * Non-compliance with statutory rules and regulations in respect of revenue recognition and taxes. Company’s transaction flow control procedures The entity’s internal control structure comprises the policies and procedures established to provide reasonable assurance that specific entity objectives will be achieved.

The internal control structures include a wide variety of objectives and related policies and procedures. Mostly important procedures that are established in the company’s sales cycle are as follows: * Authorization and accuracy of contracts with clients * Authorization and Accuracy of Sales Orders – Customer requests for goods and services and accordingly services contracts that meet management’s criteria should be approved and should be accurately reported on a timely basis. 1. Controls to ensure valid authorization of sales orders:| * Type of the control procedure| * Responsible person| * Approval by the proper level of management of established prices, rates per minute, special rates and prices (for flour, poultry), customers, credit limits and terms. * establishing of the procedure| * Financial Director| * Current prices, customers, credit limits and terms are made available to order entry personnel. | * on a regular basis| * Sales department| * Approval by authorized individuals of orders and services contracts as to customers, prices, credit, quantities and terms by reference to documented data approved by management.

Approval is made by persons not involved in the sales function nor in the preparation of sales orders or contracts. | * on a regular basis| * Financial Director| * * 2. Controls to ensure accurate recording of sales orders and services contracts:| * Type of the control procedure| * Responsible person| * Accurate recording of orders received and contracts concluded as to customer, prices, quantities and terms for use in subsequent processing. * on a regular basis| * Sales department| * 3. Supervisory controls to ensure the continued operation of above controls:| * Type of the control procedure| * Responsible person| * Review and approval by a designated official of sales orders over a specified amount, and orders/services contracts with special prices, terms or discounts. * adherence to the procedure| * Financial Director| * * Completeness of Services Contracts and Sales Orders – All customer requests for goods and services should be reported. * 1. Controls to ensure completeness of sales orders:| * Type of the control procedure| * Responsible person| * Use of pre-numbered sales orders/contracts or other means in recording all orders. * adherence to the procedure| * Sales department| * Accounting for the sequence of pre-numbered sales orders/contracts and follow-up of missing orders. | * – “ -| * – “ -| * 2. Supervisory controls to ensure the continued operation of above controls:| * Type of the control procedure| * Responsible person| * Review by a designated official of the results of follow-up on missing documents. * on a regular basis| * Financial Director| * * 3. Written procedures to ensure the proper operation of above controls| * Type of the control procedure| * Responsible person| * Adequate written procedures regarding order entry function activities. * establishing of the procedure| * Financial Director| * * Providing services/Shipping Function * * Completeness of Shipments – All shipments made and services provided should be reported. * 1.

Controls to ensure completeness of recording of goods shipped and services provided:| * Type of the control procedure| * Responsible person| * Use of pre-numbered documents, logs, or other means in recording all shipments and services rendered | * establishing of the procedure| * billing department, warehouse in-charge| * Accounting for the sequence of pre-numbered shipping documents or records of services provided and follow-up of missing documents. | * on a regular basis| * – “ -| * * Matching of shipping documents with sales orders and records of services provided with services contracts and follow-up of long unmatched orders, by persons other than those who maintain the records of unmatched orders. * * on a regular basis | * * – “ -| * * * 2. Supervisory controls to ensure the continued operation of above controls:| * Type of the control procedure| * Responsible person| * Review by a designated official of the results of follow-up on unmatched orders and missing documents. | * on a regular basis| * Deputy Chief Accountant| Accuracy of Providing Service/Shipments – Shipments made and services provided should be based on authorized customers’ orders/services contracts, and should be accurately reported on a timely basis. * 1. Controls to ensure validity of shipments and services provided. | * Type of the control procedure| * Responsible person| * Shipment of goods or providing of services not made without an authorized sales order/services contract. | * adherence to the procedure| * Billing| * * 2.

Controls to ensure accuracy of recording of shipments and services provided:| * Type of the control procedure| * Responsible person| * Physical counting of goods at time of shipment by persons other than those who: a) have custody or access to inventories; b) authorize or make shipments. | * on a regular basis| * warehouse in charge| * Accurate recording of services provided as to description, dates, quantities and other relevant data for use in subsequent processing. * Use of verified shipping documents in subsequent posting of quantities to inventory subsidiary records. * Adherence to documented procedures for services provided/shipping cut-off (daily and period end). | * – “ – * * * – “ – * * adherence to the procedure| * Billing * * * warehouse in-charge * Financial Director * | * * 3. Supervisory controls to ensure the continued operations of above controls:| * Type of the control procedure| * Responsible person| * Assignment of a designated official to supervise providing services and shipping operations. | * assignment of the person| * Financial Director| * * 4.

Written procedures to ensure the proper operation of above controls:| * Type of the control procedure| * Responsible person| * Adequate written procedures regarding shipping function activities. | * establishing of the procedures| * Financial Director| * * Billing * Completeness of Billings – All shipments made and services provided should be billed and recorded in the general ledger and subsidiary records. * 1.

Controls to ensure the completeness of recording of billings for goods shipped and services provided:| * Type of the control procedure| * Responsible person| * For computer-generated invoices, assignment by computer of sequential number to invoices (in manual systems – use of pre-numbered and controlled sales invoices in recording all billings. )| * establishing of the procedure| * Billing| * Invoices are automatically generated by the computer system based on computer records of shipments/services provided to customers. * For invoices produced manually – Matching of sales invoices with shipping documents or records of services provided, and follow-up of long unmatched shipments or services by persons other than those who maintain the records of unmatched items. | * – “ – * * * on a regular basis| * Billing * * * Deputy Chief Accountant| * 2.

Controls to ensure the completeness of summarization of billings for goods shipped and services provided:| * Type of the control procedure| * Responsible person| * Accounting for sequence of pre-numbered manually-prepared invoices, and follow-up of missing and/or duplicate invoices by persons other than those who (1) prepare invoices, (2) record shipments, (3) process accounts receivable transactions, (4) deal with cash receipts (5) authorize the voiding of invoices, (6)prepare credit memos. (7) record goods returned and claims or (8) are involved in computer operations and programming. * on a regular basis| * Deputy Chief Accountant| * * Detailed checking of sales invoices (quantities billed) against printouts (“minutes of use” reports), follow-up of unprocessed invoices, and investigation and correction of differences by persons with no incompatible duties. | * * on a regular basis| * * – “ -| * * Reconciliation of invoice control totals for posting to the receivable control account with totals of previous reports.

Reconciliation, and investigation and correction of differences, by persons with no incompatible duties. | * * – “ -| * * – “ -| * * Pre-numbered journal entry forms and related accountability for all numbers each period. | * * adherence to the established procedure| * * – “ -| * * 3.

Supervisory controls to ensure the continued operation of above controls:| * Type of the control procedure| * Responsible person| * Review by a designated official of the results of follow-up on unmatched shipments and services. | * on a periodic basis| * Financial Director| * Review by a designated official of the results of follow-up on missing documents. | * – “ -| * – “ -| * * * 4.

Written procedures to ensure the proper operation of above controls:| * Type of the control procedure| * Responsible person| * Adequate written procedures regarding procedures for billing and summarization of sales invoices. | * establishing of the procedures| * Financial Director| * Accuracy of Processing and Summarization of Billings – Billings (including costs of goods and services sold and sales-related expenses where these are based on billings) should be based on shipments made and services provided , should be accurately computed, and should be accurately and promptly summarized and recorded in the correct accounts in the general ledger and subsidiary records. * 1.

Controls to ensure validity of recorded sales| * Type of the control procedure| * Responsible person| * Verification of invoiced prices to approved sales orders or price lists, by persons other than those who (1) prepare sales invoices or (2) are involved in the order entry function | * on a test basis| * Deputy Chief Accountant| * Ensuring that manually-prepared sales invoices have been checked and approved as being valid before posting of amounts to the accounts receivable control account and subsidiary records. | * on a regular basis| * – “ -| * * * 2.

Controls to ensure accuracy of recorded sales:| * Type of the control procedure| * Responsible person| * Verification of extensions and footings of invoices by persons other than those who prepare sales invoices| * on a periodic basis| * Deputy Chief Accountant| * * 3. Controls to ensure propriety of account classification| * Type of the control procedure| * Responsible person| * Checking of coding of invoices. * on a regular basis| * Deputy Chief Accountant| * * 4. Controls to ensure accuracy of summarization| * Type of the control procedure| * Responsible person| * Verification of mathematical accuracy of summaries used as basis for general ledger entries. | * on a regular basis| * Deputy Chief Accountant| * Period-to-period comparisons of the amounts of recurring entries. * on a periodic basis| * Financial Director| * Adherence to documented cut-off and period-end closing procedures. | * at the end of period| * – “ -| * * 5. Supervisory controls to ensure the continued operation of above controls:| * Type of the control procedure| * Responsible person| * Review by a designated official of exception report on the verification and checking of invoices. * on a periodic basis| * Chief Accountant| * Review and approval by a designated official of invoices over a specified amount, and invoices with special prices, terms or discounts. | * on a regular basis| * Financial Director| * Review and approval of each journal entry by a designated official who did not participate in its preparation. | * – “ -| * Chief Accountant| * * * 6.

Written procedures to ensure the proper operation of above controls:| * Type of the control procedure| * Responsible person| * Adequate written procedures regarding activities on billing and summarization of sales invoices. | * establishing of the procedure| * Financial Director| * * Accounts receivable related procedures * Substantiation of balances – the validity, accuracy and completeness of recorded balances of receivables and sales should be periodically substantiated. * * 1.

Controls to ensure the validity, completeness and accuracy of recorded balances:| * Type of the control procedure| * Responsible person| * Periodic comparison of recorded balances with budgeted amounts, prior periods and industry statistics. * | * on a periodic basis| * Financial Director| * Maintenance of the accounts receivable subsidiary records by persons other than those who (1) prepare, check or approve accounts receivable documentation, (2) maintain the control account or (3) deal with the cash receipts function. | * appointment of the person| * Chief Accountant| * Periodic reconciliation of accounts receivable subsidiary records with related control account and investigation of differences by persons other than those who (1) post the accounts receivable subsidiary records, (2) maintain the control account, (3) account for sales invoices and credit memos or (4) deal with the cash receipts function| * on a periodic basis| * Deputy Chief Accountant| * * Periodic mailing of customer statements, and investigation of exceptions by persons with no incompatible duties. * * – “ -| * * – “ -| * * Periodic review of credit balances in accounts receivable to determine their causes. | * * – “ -| * * Chief Accountant| * * * * Evaluation of balances – the valuation of recorded balances of receivables and related allowances should be periodically evaluated. * * 1. Controls to ensure receivables are stated at realizable value. * Type of the control procedure| * Responsible person| * * Comparison of provisions, write-offs, credit memos and other non-cash reductions to receivables with budgets and historical information. | * * on a periodic basis| * * Deputy Chief Accountant| * * Preparation of an aged analysis of receivables and follow-up of past due items (Compiling and approving a disconnection list). Reconciliation of total of aging analysis with related control account balance. | * on a regular basis| * * A/R accountant| * * Periodic review of the formula used for determining provisions and allowances for doubtful accounts. | * * on a periodic basis| * * – “ -| * * Periodic determination of provisions required and accounts to be written off by a person not involved in the sales, accounts receivable recording and cash functions. * * – “ -| * * Chief Accountant| * * Periodic determination of additional valuation allowances (returns, allowances and other non-cash reductions) by persons not involved in the sales, accounts receivable recording and cash functions. * | * * – “ -| * * – “ -| * * * 2.

Supervisory controls to ensure the continued operation of above controls| * Type of the control procedure| * Responsible person| * Review by a designated official of aged analysis of receivables for unusual items and results of reconciliation procedure. * | * on a periodic basis| * Financial Director| * Review and approval by a designated official of provisions, write-offs and additional valuation allowances made. | * – “ -| * – “ -| * 3. Written procedures to ensure the roper operation of above controls of above controls:| * Type of the control procedure| * Responsible person| * * Adequate written procedures regarding accounts receivable function activities. * | * * establishing of the procedure| * * Financial Director| * * Cash Receipts control procedures * Completeness of cash receipts procedures- all cash receipts should be recorded in the general ledger and subsidiary records. * 1.

Controls to ensure the completeness of recording of cash receipts:| * Type of the control procedure| * Responsible person| * Pre-numbering and control over bank statements evidencing cash receipts from customers that are subsequently accounted for, in recording all cash receipts. | * establishing of the procedure| * Cash in bank accountant| * Comparison, either individually or in total, of the records of entries in the cash receipts book with bank statements as to dates and amounts, by persons other than those who (1) handle cash receipts or (2) maintain the accounts receivable records (This is done as part of bank reconciliation. | * on a periodic basis| * Deputy Chief Accountant| * * 2. Controls to ensure completeness of summarization of cash receipts:| * Type of the control procedure| * Responsible person| * Accounting for sequence of pre-numbered cash receipts documents and follow-up of missing documents. * Pre-numbered journal entry forms and related accountability for all numbers each period. | * on a regular basis| * Deputy Chief Accountant| Accuracy of processing and summarization of cash receipts – cash receipts should be accurately recorded as to amounts, dates, customer names and numbers, and should be accurately and promptly summarized and recorded in the correct accounts in the general ledger and subsidiary records. * 1. Controls to ensure validity of cash receipts:| * Type of the control procedure| * Responsible person| * Ensuring that cash receipts have been checked and approved as being valid before posting of cash receipts to control account and subsidiary records. | * on a regular basis| * Deputy Chief Accountant| * 2.

Controls to ensure propriety of account classification:| * Type of the control procedure| * Responsible person| * Checking of account coding of cash receipts for posting to general ledger. | * on a regular basis| * Deputy Chief Accountant| * * * * * 3. Controls to ensure accuracy of summarization of cash receipts:| * Type of the control procedure| * Responsible person| * Verification of mathematical accuracy of summaries used as bases for general ledger entries. * Period-to-period comparisons of amounts of recurring entries. * * Adherence to documented cut-off and period-end closing procedures. | * on a periodic basis| * Chief Accountant| * * * 4. Written procedures to ensure the proper operation of above controls:| * Type of the control procedure| * Responsible person| * Adequate written procedures regarding cash receipts processing and summarization activities. * establishing of the procedure| * Financial Director| * * * * Access To Cash Receipts—Access to cash receipts should be restricted to authorized personnel, and cash receipts should be deposited in bank accounts promptly. * 1. Controls to ensure adequacy of physical safeguards:| * Type of the control procedure| * Responsible person| * | * | * | * Adequate physical controls of cash on hand. | * establishing of the controls| * Chief Accountant| * * 2. Written procedures to ensure the continue operation of above controls:| * Type of the control procedure| * Responsible person| * Adequate written procedures regarding cash receipts function activities. | * establishing of the procedure| * Chief Accountant| * * * * Completeness Of Receiving And Processing Of Sales Returns (flours) And Allowances—All goods(flours) returned should be promptly reported and recorded in the accounting records. * * 1.

Controls to ensure the completeness of recording of returns and allowances:| * Type of the control procedure| * Responsible person| * Use of pre-numbered receiving documents, logs or other means to record all returns made. * | * establishing of the procedure| * Warehouse in-charge| * Accounting for sequence of pre-numbered receiving documents and follow-up of missing documents. * | * on regular basis| * – “ -| * Use of pre-numbered and controlled credit and debit memos that are subsequently accounted for, in recording all returns and other adjustments. | * – “ -| * Deputy Chief Accountant| * Matching of credit memos with pre-numbered receiving documents, and follow-up of unmatched items by persons other than those who maintain the records of unmatched items. | * – “ -| * – “ -| * * 2. Controls to ensure accuracy of recorded returns and allowances:| * Type of the control procedure| * Responsible person| * Physical counting of goods at time of return. | * adherence to the procedure| * warehouse in-charge| * Accurate recording of returns made as to quantities, description, customer, date and other reference data for use in subsequent processing. * | * – “ -| * – “ -| * * * 3. Written procedures to ensure the proper operation of above controls:| * Type of the control procedure| * Responsible person| * Adequate written procedures regarding activities on processing and summarization of sales returns and allowances. * establishing of the procedure| * Financial Director| * * * Company’s weakness Weakness| Suggestion| Goods are removed from inventory for illegal orders. | Approved sales orders are required for goods to be removed from the storehouse. | Storekeeper in the shipping department did not check on the entry of goods receive in the storehouse. | The products received should be checked based on the shipping document by the storekeeper. Identify the shipping documents, and make sure all the transaction have been recorded to the sales journal. | Credit sales are allowed to individuals with insufficient credit ratings. Credit limit have to be allocated for the purchases by existing customers and should refer to the customers pending credit amount before accepting their new orders. | No practice in the company to review the company’s overdue debt and insufficient provisions made from doubtful debts| Company must have a good system of credit control by using aged analysis, review independently of bad debts and provisions made of doubtful debts. | Inappropriate allowances are given and credit notes are not properly recorded| Credit notes must be pre-numbered and accounted for. The credit note is revised to ensure the goods return and sales invoice are recorded correctly. | No internal verification for sales invoices, as they are being recorded more than once. A specific employee should be hired to verify the prices, costs, and calculations and another employee to prepare the journal entries. Always review the sales journal and master file for abnormal transactions and amounts. All invoices and credit notes should be recorded in sales and sales return journals. | | | Sales cycle flowchart TN Approved Customer’s List 1 Sales order (SO) SO 2 SO 3 SO 4 Purchase order Received Customer’s Purchase Order Purchase order Accounts clerk prepares a Sales Order To Credit Department Figure 20. 4 : Sales Department A App SO 4 App SO 3 App SO 2 1 Approved Sales Order (App SO) Credit approved by officer?

Clerk checks the customer’s credit standing 1 Sales Order (SO) SO 2 SO 3 SO 4 From Sales Department Yes To sales department Figure 20. 5 : Credit Department Clerk complies the document together N Approved Sales Order Purchase Order Purchase Order 2 Approved Sales Order (SO) App SO 3 App SO 4 TN From Credit Department To Store Department To Billing Department Figure 20. 6 : Sales Department N 1 Delivery Note (DN) DN 2 DN 3 App Sales Order 3 Storekeeper assembles the ordered goods Approved Sales Order App SO) From Sales Department Clerk prepares pre-numbered delivery note and obtain approval from office To Bin Card To Billing Department To Customer Figure 20. 7 : Stores Department 1 Sales Invoice (SI) SI 2 SI 3 Delivery Note 2 App Sales Order 2 Clerk prepares pre-numbered Sales Invoice and obtains approval from office Standard Price List Match Documents 2 Delivery Note 2 Approved Sales Order From Stores From Sales Department N To Account Department To Customers Figure 20. 8 : Billing Department N Sales Ledger Sales Journal Bookkeeper records in Sales Ledger Bookkeeper records in Sales Journal 2

Sales Invoice From Billing Department Figure 20. 9 : Accounts Department Cheque P’list of Mail Rec. Remittance Adv. Clerk prepares Prelist of Mail Receipts and obtains approval from officer Cheque Remittance Adv. Received cheque and remittance advice (under supervision of an officer) To Cashier Figure 20. 11 : Mail Room D 1 Cash Register Reading Cash Cash C/Sheet 1 Cash C/Sheet 2 Clerk prepares Cash Count Sheet and obtains approval from Cashier Clerk agrees cash Register reading with the actual cash receipts Cash Received Cash To Accounts Department Figure 20. 12 : Cashier – Cash Sales TD TD 2 Deposit Slip Cash Cheque

Cashier prepares Deposit Slip Cheque P’list of Mail Rec. Remittance Adv. Cash Cash Count Sheet From Mail Room 1 To Bank Figure 20. 13 : Cashier – Deposit of Cash and Cheques 3 D Deposit Slip (validated copy) Cash Count Sheets P’list of Mail Rec. Remittance Adv. Match Documents Prelist of Mail Receipts Remittance Adv. Deposit Slip (validated copy) Cash Count Sheets TD 2 TD Figure 20. 14 : Cashier – Documents Matched 3 Remittance Advice Clerk prepared a pre-numbered Official Receipt and obtains approval from Cashier Remittance Adv. OR 3 OR 2 Official Receipt (OR) N To Accounts Department To Customers Figure 20. 5 : Cashier – Acknowledging Receipts from Credit Customers From Cashier From Cashier 2 Official Receipt 2 Cash Count Sheet Bookkeeper records in Cash Book Bookkeeper records in Sales Ledger Cash Book Sales Ledger D N Figure 20. 16 : Accounts Department Sales Journal Cash Book Bookkeeper totals up the recorded entries (monthly) Bookkeeper totals up the recorded entries (monthly) Bookkeeper posts the total monthly sales to the Sales ledger Control A/c Bookkeeper posts the total monthly receipt to the Sales Ledger Control A/c General Ledger Figure 20. 17 : Accounts Department Sales Ledger General Ledger Agree the Sales Ledger Control A/c balance with total of Sales Ledger blances Balance agree? No

Bookkeeper prepares Debtors Reconciliation Statement Debtors Reconciliation Statement Figure 20. 18 : Accounts Department Sales Ledger Bookkeeper prepares Debtors Aging Report and obtains approval from office Bookkeeper prepares Statement of Accounts and obtain approval from officer Debtors Aging Report Statement of Accounts To Customers Figure 20. 19 : Accounts Department Received Bank Statement Cash Book Bank Statement Bookkeeper ticks off the items that are the same and pick out the unpresented cheques and uncredited lodgement Bookkeeper prepares Bank Reconciliation Statement and obtains approval from officer Bank Reconciliation Statement Figure 20. 20 : Accounts Department

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