Answered: Why does billing receive a copy of the…

Why does billing receive a copy of the sales order when the order is approved but does not bill until the goods are shipped?

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter10: Auditing Cash, Marketable Securities, And Complex Financial Instruments

Section: Chapter Questions

Problem 9CYBK

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Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

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Why does billing receive a copy of the sales order when the order is approved but does not bill until the goods are shipped?

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Which one of the following documents is not needed to process a payment to a vendor? A. vendor invoice B. packing slip C. check request D. purchase order
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Which function should the billing department NOT perform? a. record the sales in the sales journal b. send the ledger copy of the sales order to accounts receivable c. send the stock release document and the shipping notice to the billing department as proof of shipment d. send the stock release document to inventory control
Which of the following statements concerning internal control procedures for merchandise sales is not correct? a.Accounting for a sale begins with the receipt of a purchase order or some similar document from a customer. b.Shipping and billing documents are prepared based on the order document. c.A sale and its associated receivable are recorded only when the order, shipping, and billing documents are all present. d.The order document is not necessary for the buyer to be obligated to accept and pay for the ordered goods.
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The billing department prepares the customers' invoices and records the sale in the sales journal, is this considered improper segregation of functions, why or why not?
In the case of sales where the customer is billed before delivery of the goods, the seller should always recognize revenue before the products are delivered to the customer. the goods belong to the customer and revenue recognition is deferred until delivery. the seller may recognize revenue if control of the goods has been transferred to the customer even though physical delivery has not taken place. revenue will not be recognized until the goods are shipped to the customer.
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What purpose is served by prenumbering sales orders, shipping documents, and sales invoices?
Which one of the following departments does not have a copy of the purchase order?a. the purchasing departmentb. the receiving departmentc. accounts payabled. general ledger
When a customer returns merchandise previously purchased on credit, the entry for the seller to record the return requires a debit to the _________ account and a credit to the __________ account? Save for Later
What happens after the shipping department verifies that the quantities and descriptions of goods prepared for shipment are consistent with the sales order?