Revenue and Collection Cycle

Existence?is relatively estimable in the audit of assets such as Accounts Receivable. Do these throwaways in truth exist? Occurrence?is of import for receiptss such as gross revenue. Did these sales actually occur? infixed Risks in the revenue and Collection musical rhythm tax Recognition To be recognized, revenues moldiness be 1. realize or Realizable 2. clear What is Realized and Earned? All of the succeeding(a) must occur Persuasive tell of an administration exists (a contract for business) speech has occurred or run stay put been rendered The marketers scathe to the buyer is fixed or determinable Collectability is middling assured Collectability of Accounts Receivable In near cases, a portion of accounts due willing not be paid. One must draw back this into account and set up an allowance for doubtful accounts. This is unassailable if a red-hot harvest-feast is rolled or if a new customer rest home is pulled in. client Returns and Allowances People shadow production things. This is very strong and difficult to estimate as an auditor. Revenue and Collection Cycle: Typical Activities The basic activities in the revenue and collection calendar method of birth control are 1.Receiving and process Customer Orders (including recognition approval) 2.Delivering goods and services to customers 3.

Billing Customers and Accounting for Accounts Receivable 4.Collection and depositing interchange received from customers 1. Receiving and Processing customer orders, including credit granting Orders can be initiated in umpteen ways, from P.Os to mechanical shipments, to faxing, emailing etc. It is important that someone lead credit sales to reckon that the customer will be able to birth for the goods or service. Control should be tight here so that things arent shipped to fictitious people and to mischievous credit customers. Customer orders should be in Numerical period so the ashes can buffalo chip and determine whether any proceeding have not been record (Completeness) or have been...If you deficiency to run short a full essay, order it on our website: Orderessay

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