Page 62 - Auditinf Electronic System

Sales Returns and Allowances Transaction

Sales R&A 6. Processing and recording ▪ Credit memo

Accounts receivable sales returns and ▪ Sales and returns and

allowances allowances journal

Write-off of Uncollectible Accounts Transaction

Allowance for 7. Writing off Uncollectible ▪ Uncollectible account

uncollectible accounts Accounts receivable authorization form

(AFDA) ▪ General journal

Accounts receivable

Bad debt expense transactions
▪ General Journal
Bad debt expense 8. Estimate Bad debt

Allowance for Expense

uncollectible

Accounts

1. Processing customer orders:

A customer`s request for goods initiates the cycle. Legally it is un offer to buy goods

under specified terms. The receipt of a customer order results in immediate creation

of sales order

a. Customer order: a request of merchandise by a customer, received via
telephone, letter or printed form

b. Sales Order: a document for communicating the description, quantity and
related information for goods ordered by a customer in the company`s format

2. Granting credit:

Before goods are shipped, credit departments must approve credit to customer
for sales on account. An indication of credit approval on sales order often serves
as the approval to ship goods.

For cash sales approval of sales department is sufficient.

3. Shipping goods:

The shipping department is responsible for custody of goods

a. Shipping documents: Is prepared to initiate shipping of goods, indicating
the description of merchandise, the quantity of shipped and other relevant
data.

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‫جميع الحقوق محفوظة ـ الإعتداء على حق المؤلف بالنسخ أو الطباعة يعرض فاعله للمسائلة القانونية‬