Revenue and Collection Cycle

Existence?is relatively serious in the audit of as quite a littles such as Accounts Receiv qualified. Do these throwaways actually exist? Occurrence?is Copernican for receiptss such as sales. Did these sales actually occur? in heady Risks in the revenue and prayer Cycle Revenue Recognition To be recognized, revenues moldiness be 1. completed or Realizable 2. clear What is Realized and Earned? All of the following must occur smooth-tongued evidence of an administration exists (a contract for business) Deli truly has occurred or visitation amaze been rendered The marketers price to the buyer is fixed or determinable Collectability is middling assured Collectability of Accounts Receivable In most cases, a portion of accounts receivable willing non be paid. One must take this into account and set up an allowance for doubtful accounts. This is hard if a voluptuary product is rolled or if a new guest base is pulled in. client Returns and Allowan ces People can production things. This is very hard and difficult to estimate as an auditor. Revenue and Collection Cycle: Typical Activities The basic activities in the revenue and aggregation cycle are 1.Receiving and process Customer Orders (including quotation approval) 2.Delivering goods and go to customers 3.

Billing Customers and Accounting for Accounts Receivable 4.Collection and depositing cash received from customers 1. Receiving and impact customer orders, including point of reference granting Orders can be initiated in many ways, from P.Os to automatic shipments, to faxing, emailing etc. It is important that someone authorize credit sale! s to ensure that the customer will be able to birth for the goods or service. Control should be tight here(predicate) so that things arent shipped to fictitious people and to bad credit customers. Customer orders should be in Numerical Sequence so the ashes can check and determine whether any transactions consent not been recorded (Completeness) or have been...If you want to hunt short a full essay, order it on our website: OrderCustomPaper.com

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