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Unit 4: Revenue and Receipt cycle - Coggle Diagram
Unit 4: Revenue and Receipt cycle
Functions
the money/profit generating cycle in any business
credit sales, receipts from debtors and sale adjustments.
Documents
Customer Order
Internal sales order (hereafter known as ISO)
Price list
Credit application form
Credit bureau information
Goods returned vouchers;
Credit note returns and allowances journals;
Debtors journal;
General ledger.
Control objectives
Occurrence/Validity;
Authorisation;
Completeness;
Accuracy;
Recording;
Classification;
Cut off.
Internal controls
Basic controls;
Controls over cash;
Controls over bank account.
Good returned
Adjustments
Controls
Test of controls
enquire
Observe
Test
Inspect
Substantive procedures
Nature
Timing
Extent of testing
Possible weakness
Not having a credit application process
Possible risks
Giving credit to a client who isn't credit worthy will result in bad debts