6. Revenue System

Question 1

Which two of the following are risks associated with the sales system

a) Orders may be taken from customers who are not able to pay

b) Invoices may be cancelled by valid credit notes

c) Goods may be received but not invoiced

d) Sales might be recorded in the wrong period

Answer 1

a & d

c is related to purchases

Question 2

Assuming all controls are operating effectively, which one of the following procedures is most likely to ensure that customers are invoiced for goods that are despatched?

a) Use of pre-printed sequentially numbered sales order documentation

b) Matching of sales orders with despatch notes

c) Matching of despatch records with sales invoices

d) Requiring customers to sign for orders received

Answer 2

c

Despatch records are evidence of goods delivered - matching these to invoices means all goods have been invoiced for

a and b relate to the completeness of the sales order process - ensuring they are despatched but not ensuring invoices

d confirms delivery only, not invoice