ACCA AA Syllabus C. Internal Control - Revenue (Sales Cycle) - Notes 2 / 7
Objective to ensure all valid sales recorded accurately and cash received promptly
Tests of Control - Sales Cycle
These include:
Review new customers’ files for references, credit checks, authorisation by senior staff
Ensure credit limits for customers are not exceeded by trying to post a sale which is beyond the credit limit
Match GDN with sales invoices checking prices, quantities, arithmetical accuracy, VAT and postings
Verify credit notes with correspondence, original invoices, amounts and authorisation
Check numerical sequence of invoices, credit notes, GDN’s and sales orders – enquire into missing numbers
Review sales ledger reconciliations
Agree sample of accounts in sales ledger re-performing additions and balances carried down
Inspect correspondence on overdue accounts
Review process for dispatch of statements and ensure regularly sent
Ensure bad debt write offs are authorised by managers