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Revenue and Receipts Cycle
money/profit generating cycle in any business,…
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- Internal controls Weakness *
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Distinct Functions:
Credit Sales
Receipts from debtors
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Documentation
Receipts in terms of bank
Cancelled cheques
Cheque requisitions
Deposit slips
Bank statements
Bank confirmation letter
Cash book
Bank reconciliation
Receipts in terms of Cash
Cash register reading
Cash advance documents
Cash summaries
Receipts
Physical cash counts
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Occurrence/Validity:
- All entries in the sales journal are supported by:
:check: internal sales order
:check: delivery note
:check: invoice
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Authorization:
:check: Credit limits are determined for all credit clients after approving their creditworthiness:
:check: No credit granted for non-creditworthy clients
:check: ISO authorized by credit manager
:check: Sales manager signs order as proof of authorization
Completeness
:check: An internal sales order is made out on receipt of the client's order.
:check: After the sale has been authorized, a delivery note is prepared.
:check: On receipt of a signed delivery note a numerical invoice is made out.
:check: delivery note market off in the register.
:check: All unmatched delivery notes frequently followed up.
:check: numerical list of delivery notes and invoices frequently produced.
:check: Gate control: guard counts goods and agrees it with the delivery note
Accuracy
:check:Quantities on the invoices are obtained from the delivery notes.
:check: The price on the invoice is obtained from the official price list
:check: Calculations are reviewed by an independent person
Recording/Classification /Cut off
:check: The sales journal recorded from the sales invoices
Sales journal are posted to:
:check: individual debtor's account in the debtors ledger.
:check: total sales to the debtors control account.
:check: sales account in the
general ledger.
:check: debtors control account is reconciled monthly with the debtor’s ledger.
:check: External and internal sales classified as such.
:check: Invoices are made out from the delivery notes in respect of the date of delivery