6: Revenue system

Question 1

What are the stages of a revenue/sales system and the I/C procedure for each stage

Answer 1

1. Receipt of customer order - Pre-numbered sequential standardised order forms created to ensure orders not lost.
   - Credit checks/limits to prevent bad debts
2. Dispatch of goods to the customers - Pre-numbered sequential goods dispatched notes (GDN) created as goods leave warehouse to identify what was sent, customer signs.
3. Invoice the customer - creation of a pre-numbered sales invoice to help ensure completeness, match it to GDN to ensure correct invoicing. Send out reminders to pay.
4. Receipt of payment from customer - Match funds received against invoice being paid. Record and bank any cash/cheques promptly to detect and prevent misappropriation

Question 2

What is a control objective?

Answer 2

The aim or goal or intention of the I/C.

Question 3

Give an internal control to reduce bad debt risk

Answer 3

Ensure sales made to creditworthy customers

Question 4

Give an i/c to keep customers happy

Answer 4

Ensure orders can be fufilled before accepted

Question 5

give an i/c to protect business assets

Answer 5

Ensure invoicing is correct

Question 6

Give i/c for cut off period

Answer 6

Ensure sale is recorded in the correct period