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Chapter 11

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					Ch. 11 The Revenue Cycle                   `                                     SM 11-1



                                   Chapter 11
                                The Revenue Cycle

                             REVIEW QUESTIONS
1.
The typical events in a revenue cycle are:
(a) respond to customer inquiries,
(b) develop agreements with customers to provide goods and services in the future,
(c) provide services or ship goods to the customer,
(d) recognize claim for goods and services provided,
(e) collect cash,
(f) deposit cash in bank,
(g) prepare reports.

2.
The types of revenue cycles can be characterized according to ordering, payment timing
and form of payment. There are two alternatives for ordering: order before delivery, or
immediate customer pickup (no order). The timing of payment can be before delivery, at
the time of delivery or after delivery of goods or services. The form of payment can be
cash, check, credit/debit card or sale on account.
        The configuration that would require the most record keeping is one where
goods or services are ordered before delivery, payment is after delivery and the sale
is ‘on account.’ With this arrangement, the organization must keep a record of the
order, the delivery, the billing, and the collection. Thus there will be an order table,
shipping/delivery table, invoice table, inventory table (to help in taking orders) and
a customer table (to help in billing customers). In addition, customer statements
must be mailed.
        The configuration that would require the least amount of record keeping is one
where the customer simply picks up what is needed from the store or shop floor, and pays
cash (currency) to the company. This type of arrangement is known as ―cash and carry.‖
There would be no need to track orders, keep a record of customers, create and store
invoices, or send customer statements.


3.
The swimlanes in an overview activity diagram indicate who is responsible for events in
that lane. This indicates segregation of duties. The order in which the events occur is
plainly indicated in the diagram with arrows. This shows the required sequence of
events. The documents produced by one event can be seen as input into the next event,
showing the use of information from prior events. There are also some aspects of
overview diagrams that lead one to consider workflow controls. For example, the
document symbols can remind the user to consider prenumbering those documents. The
swimlanes may lead to a plan for assuring accountability for events that occur in an
individual’s swimlane.
SM 11-2                       Part III Transaction Cycles and Accounting Applications


4.
There are very few opportunities for automatic checking in customer maintenance. Most
of the data is reference data that is not stored in other tables. It is not really possible to
validate the name and address that is entered since there is no related information
available in the system. The exception to this is the zip code, which can be validated,
given the town and state. Most of the automatic editing that can be done is format
checking. For example, a social security number, zip code and telephone number should
have nine, five, and ten digits, respectively. Only numbers, not letters can be entered in
these fields. There may also be a maximum figure above which a credit limit would not
be permitted. The balance due, or other cumulative quantities are not part of file
maintenance because only reference data can be added, deleted or changed by file
maintenance. One field that could be constrained by referential integrity is the default
general ledger code for sales that a system might include in the customer master record.
In addition the identification number assigned to a customer can be checked to make sure
that it is not used by any other customers in the table. In many cases, the best way to
control customer maintenance is simply by being very careful. In some cases, it might be
worth requiring the data entry clerk to enter the same reference data twice to catch typing
mistakes.
         The situation is similar for inventory file maintenance, although there are a few
more opportunities for control, especially for a merchandiser. If the inventory item is a
standard item that is sold by others, the company may be able to use a standard number
that has been determined by the vendor or an organization. For example, book sellers use
the ISBN (International Standard Book Number) to identify books, a standard number
that for American publishers, is assigned by the U.S. ISBN agency. Given an ISBN, on-
line resources are available for obtaining the title and author and can be used to enter
information in the author and title fields of inventory record. Uniform Product Codes
(UPCs) for manufactured products are also obtainable from the Uniform Code Council.
Data entry in an inventory master record can also be constrained by creating validation
rules. For example, a unit-of-measure field can be constrained to ―each‖, ―dozen‖,
―gross‖, etc. and maximum limits can be set for allowable reorder points. As with the
customer maintenance, data entry of default general ledger codes for sales and cost of
goods sold can be limited to accounts in the existing general ledger by enforcing
referential integrity.


5.
A third-party credit card processor performs the following services for a merchant
(assuming that the merchant has a terminal that is on-line with the processor): (1)
validate a customer’s credit card (could be any one of a variety of cards --- Visa,
MasterCard, etc.), (2) receive a batch of transactions from the merchant and
disperse the transactions to the correct credit card companies, (3) consolidate the
funds sent by the credit card company banks, and electronically deposit the funds in
the merchant’s bank.
Ch. 11 The Revenue Cycle                     `                                     SM 11-3


6.
It is unlikely that a customer will be billed for a product different than the one shipped
because the product’s identification number is recorded in the Shipping_Detail Table and
the invoice is based on data that comes from that table. The shipping records are likely to
be accurate because they are compared to the order by the shipper, and because product
numbers are taken by default from the order that was recorded for the customer.

7.
The sales journal lists the sales for a particular period, such as one day. The
journal, of course, provides information to managers who want to track the
company’s sales success. It is also a control device. The total on the sales journal
can be compared to a batch control of sales transactions, if one had been calculated.
The sales journal also provides information needed for making a journal entry,
involving, for example, a debit to accounts receivable and credit to cash. Since it
also lists individual invoices, it provides an audit trail between the original invoice
and the amount of sales in the general ledger.
        The same comments apply to the cash receipts journal. It lists the cash
receipts over a period of time, such as a day, and provides information for those
responsible for managing cash. It can be a control device in the same way as the
sales journal, providing a total amount to be compared to a batch control total, and
providing information needed to make a journal entry. It also provides an audit
trail between deposits to the bank and the original cash receipt transactions.

8.
The General_Ledger_Transfer Table accumulates journal-entry records from
revenue cycle and acquisition cycle transactions. For example, a sale of $100 of
merchandise to customer# 135 would be recorded in the revenue cycle module. The
system can be established so that when the sale is recorded in the revenue cycle
module, a general ledger transfer record is also created indicating the general ledger
accounts to debit and credit as well as the amounts. After records have
accumulated in the General_Ledger_Transfer Table, they can be posted from
within the general ledger module. The posting process results in updating the
balances of the accounts in the general ledger master records.


9.
The post menu option can be used in two ways. After sales invoice or cash receipt
records have been recorded they can be posted to the customer master records in the
revenue cycle module. The sales invoice would increase the customer’s balance, and the
cash receipt would reduce it. A different option within the post menu can be used to
update the general ledger account balances (accounts receivable, sales, cash) for the
changes caused by sales and receipts.
       The purge records menu item is used to remove unneeded transaction records
from on-line storage space. When an order has been filled, the customer has been billed,
and the cash has been collected, the company can copy the related sales order, shipment,
SM 11-4                       Part III Transaction Cycles and Accounting Applications


invoice and cash receipt records to an off-line storage medium such as magnetic tape and
then delete the records from the files that are stored on-line.

10.
There are several controls that can prevent a company from sending more inventory items
than ordered. The control starts with order entry. If the wrong quantity is recorded as
ordered in the first place, it will be difficult to prevent sending too much inventory. In a
real-time system, there is really no substitute for simply being careful. A validation rule
that sets a maximum limit for the quantity ordered could help here, but this control is
really a rather blunt instrument. If orders are taken from customers on the web, the
responsibility for the correct recording falls to the consumer who may be more accurate
because he is more familiar with the transaction and realizes that he will be charged for
the quantity ordered. Once the correct order quantity is captured in the system, a system
could print a picking ticket based on the information in the order. The chance for error is
small because the quantity of inventory shown on the picking ticket is taken directly from
the order record. If the warehouse employee were to accidentally pick too many items for
an order, the shipper may detect the error when the quantity presented is compared to the
packing slip (which is also based on the quantity in the original order record).




                                      EXERCISES
E11.1. ELERBE, Inc.
   a. Event records: All of the event records have a Date field. Four out of the five
       event records have an Employee# field. The Shipment and Sales_Invoice records
       have a field that refers to a previous record in the sequence of events.
   b. Detail records: Each of the detail records has a field that makes reference to the
       related event record (e.g., Sales_Order_Detail record includes the Order# of the
       related record in the Sales_Order Table). Each detail record has a quantity or
       amount field.
   c. Master records: There is one master record for each customer in the Customer
       Table, and one master record for each inventory item in the Inventory Table.
       Each record has reference data (e.g., name, address, author, title) and summary
       data (e.g., Balance_Due, Quantity_on_Hand, Quantity_Allocated, and
       YTD_Quantity Sold).
   d. Accountability: The Employee# fields in the Sales_Order, Shipment,
       Cash_Receipt and Deposit Tables makes it possible to hold employees
       accountable for recording these events.
   e. General ledger accounts: The general ledger sales field in the Customer table is
       the default account number for recording journal entries involving sales with this
       customer.
   f. General ledger accounts: The general ledger cost-of-goods sold field in the
       Inventory table is the default account number for recording the cost-of-goods sold
       resulting from a sales transaction.
Ch. 11 The Revenue Cycle                      `                                      SM 11-5


E11.2 ELERBE, Inc.
If an inventory record indicates 300 units in the quantity on-hand field, and 35 units in
the quantity allocated field, there are 265 units available for sale.

E11.3 ELERBE, Inc.
This problem could have been caused by
(a) the picker who may have failed to mark the actual quantity picked on the picking
ticket;
(b) the shipper who either relied on an incorrect picking ticket (see ―a‖ above) or
recorded the shipment accepting the default quantities (which are the amounts ordered);
or
(c) the accounts receivable clerk.
The accounts receivable clerk is less likely to have been responsible for the problem since
the clerk cannot see how many items have been shipped. However, if the shipper had
sent a correct packing slip to the clerk, with the 10 items sent, but failed to record the
correct amount on the shipping record, the accounts receivable clerk should have
discovered the error by comparison of the shipping records and packing slip.


E11.4 ELERBE, Inc.
The events are shown in the proper order, with descriptions below.
    Accept customer order. The order entry clerk accepts a customer’s order (if
      the customer is qualified and if inventory is available) and records the
      information in the sales order and sales order detail records. A picking
      ticket is printed. A packing slip is printed.
    Pick goods. The warehouse employee picks the items on the picking ticket
      and presents the ticket and the goods to the shipper.
    Ship goods. The shipper receives the goods from the warehouse employee,
      updates the packing slip and creates a bill of lading. The package is given to
      the carrier.
    Bill customer. The accounts receivable clerk uses the information from the
      shipper to bill the customer for goods actually delivered.
    Collect cash. The mail clerk opens the mail (with another employee present),
      prepares a remittance list and gives one copy of the list with the checks to the
      cashier, and another copy of the list with the remittance advice to the
      accounts receivable clerk.
    Deposit cash. The cashier uses the system to review the list of new cash
      receipts and to print a deposit slip. The cashier takes the deposit slip and the
      checks to the bank. One copy of the deposit slip goes to the controller.


E11.5
    The sales journal provides a basis for verifying the amount of sales. The
      amount of sales in the income statement should agree with the sales account
      in the general ledger, and the postings to the general ledger account should
      agree with the amounts on the sales journal. Further, since the sales journal
SM 11-6                       Part III Transaction Cycles and Accounting Applications


          lists each individual invoice, the auditor can go back to original invoice and
          shipping records, if desired.
         The cash receipts journal may be helpful for auditing the cash balance, but it
          is not directly relevant to the sales and accounts receivable balances.
          However, a month or two after the cutoff date for the aged accounts
          receivable report, the auditor could determine whether reported accounts
          receivable balances were actually collected in cash. If not, further
          investigation may be undertaken to determine whether the sales were real.
         The aged accounts receivable report provides a good basis for auditing the
          amount of accounts receivable shown on the balance sheet. If all customers
          are included in an aging reported showing transactions up to and including
          the end of the fiscal year, the total amount on the report should agree with
          the amount of accounts receivable in the general ledger. However, even
          when the totals agree, the auditor is concerned that some of the customers
          could be fictitious, or some of the balances could be incorrectly recorded. To
          overcome this problem, the auditor can use the report to select a sample of
          customers and then send letters asking customers how much they owed at the
          end of the fiscal year.
         The open customer orders report is not of great interest to the auditor. A
          sales order is not an accounting transaction and has no consequence until the
          order is filled.


E11.6
The following documents appear in the order in which they usually occur, with
descriptions.
    picking ticket. A document listing the items and quantities on a particular
       customer order. Used by an employee to pick the required quantities from
       the warehouse.
    packing slip. A document placed within or attached to the outside of a
       package that lists the details of the contents in one or more packages.
    bill of lading. A contract between the owner of the goods and the carrier. It
       identifies a shipment by providing such information as a count of the number
       of boxes, ship-from and ship-to addresses, freight charges, name of the seller,
       carrier, and customer.
    sales invoice. A bill sent to a customer representing a single sale that has
       been completed. It indicates what goods were shipped or services provided,
       the amount owed, the due-date and the discount date if any.
    remittance advice. A removable portion of a sales invoice or customer
       statement. It includes the customer#, sales invoice# (if open items system),
       and invoice amount(s). It is enclosed with a check in an envelope and mailed
       by the customer to the company.
    deposit slip. A document that is used to make a deposit at a bank. It
       indicates the total amount of the deposit as well as the currency and
       individual check amounts to be deposited
Ch. 11 The Revenue Cycle                              `                                             SM 11-7


        customer statement. A bill sent to a customer with the total amount due for
         all unpaid invoices. In an open item statement, all unpaid bills are
         individually listed. In a balance forward statement, only the current
         period’s (e.g., month’s) transactions are individually listed. The balance is
         computed based on the balance forward from the last period, and the current
         period’s transactions.




E11.7 ELERBE, Inc.
                                            ELERBE , INC
                                       SALES INVOICE
                                                                                     5
                                                              Invoice #          3003
                     6       Customer#           1                                       5
        Educate, Inc .                        3451            Invoice Date       5/12/06
                         6                                                               5
        Fairhaven,MA                                          Due Date           6/11/06
                                   3
        Order #              219
                                   5
        Shipment#            831

                              Quantity         Quantity                           Extended
              ISBN                                                 Price
                              Ordered          Shipped                              price
                         4               2                4                  2                  8
        0-256-12596-7                  15            14            $78.35          $1096.90
                         4               2                4                  2                  8
        0-146-18976-4                  1              1            $70.00               70.00
        Subtotal
                                                                                                8
                                                                                   $1166.90
        Freight
                                                                                                3
                                                                                         3.00
        Tax
                                                                                                8
                                                                                         0.00
                                                                                                8
        Amount due                                                                 $1169.90
         Name of table that was the source of the above information: 1 = Sales_Order, 2 =
         Sales_Order_Detail, 3 = Shipment, 4 = Shipment_Detail, 5 = Invoice,6=Customer Table, 8 =
         Calculated amount.
SM 11-8                      Part III Transaction Cycles and Accounting Applications


E11-8 Christmas Emporium
The number of records added to the tables below are indicated.
   a. The Sales_Order Table: 2 (one from Sherry, one from Sue).
   b. The Sales_Order_Detail Table: 4 (two items on Sherry’s order, two items on
      Sue’s).
   c. The Shipment Table: 3 (one for each delivery).
   d. The Shipment_Detail Table: 5 (two on Sherry’s first delivery, one on Sue’s
      delivery, and one on Sherry’s last delivery).
   e. The Sales_Invoice Table: 3 (one for each delivery).




                   PROBLEM SOLVING ON YOUR OWN
PS11.1. Revenue Cycle Types
1. No order necessary, pay at time of service, pay by cash only.
2. Order nearly at time of service, pay nearly at time of service, pay by cash, check or
credit card.
3. Usually – order placed before service, pay at time of order, pay by credit card
4. Order placed before delivery, pay before delivery, pay by credit card
5. Usually - order placed before delivery, pay after delivery, purchase on account

PS11.2. ELERBE, Inc.
(a) Recording the employee# means that the employee is accountable for any errors.
(b) There could be a look-up table with valid employee numbers
(c) The employee must belong to the correct access group before the system will allow
him/her to record data.

PS11.3. Peachtree Sales Order Screen.
1. Data entered by user: Customer ID, Quantity, and Item.
2. Data displayed from other tables: Name and Bill To: (displayed as soon as Customer
ID was entered), Description and Unit Price (displayed as soon as the Item was entered).
Note: The SO# may be a serial number that is computer generated. The Date value is
probably a default using the current date.
    The Amount was calculated based on quantity times price.
Ch. 11 The Revenue Cycle                        `                                 SM 11-9


PS11.4. ELERBE, Inc.

1.      Open Item Customer Statement—August

                          ELERBE, Inc.
                     Customer Statement

Customer# 3451                               Statement period 08/01/06–08/31/06
Educate, Inc.
Fairhaven, MA

Date                          Document ID                    Amount
06/20/06                     Invoice# 4231               2,500.00
07/18/06                     Invoice# 4598                 700.00
08/15/06                     Payment on # 4231          (2,500.00)
08/30/06                     Invoice# 4903                 800.00
Balance Due                                             $1,500.00




2.Balance Forward Customer Statement—July

                             ELERBE, Inc.
                           Customer Statement

Customer# 3451                Statement period 08/01/06–08/31/06
Educate, Inc.
Fairhaven, MA
                       Balance Forward                  $3,200.00

Date                          Document ID
08/15/06                          Payment               (2,500.00)
08/30/06                     Invoice# 4903                 800.00
Balance Due                                             $1,500.00


PS11.5. ELERBE, Inc.
    Sales_Order Detail Table: Quantity shipped will increase to 8 for 0-256-12596-
      7, and will increase to 12 for 0-146-18976-4.
    Inventory Table: For 0-256-12596-7 Quantity_On_Hand will decrease to 22, and
      Quantity_Allocated will decrease to 14. For 0-146-18976-4, Quantity_On_Hand
      will decrease to 28 and Quantity_Allocated will decrease to 0.
SM 11-10                           Part III Transaction Cycles and Accounting Applications




                                   PROBLEMS
P11.1 Customer Statements
1. Customer Statement under open item system:

                                  XYZ Company
                                Customer Statement
                                March 1 - March 31

      Customer #            6614
      Name                  Fred Marcus
      Address               27 High Street
                            San Jose, CA

      Date of transaction   Invoice #        Payment#        Amount
            Feb 20          142                                20,000
            Feb 27          151                                 7,000
            Mar 10          178                                15,000
            Mar 23          142*                  398        (20,000)

              Amount due                                     $22,000

       *Under the open item system it is necessary to identify the invoice (using the
       Invoice#) that is being paid so that customers know to which invoice the payment
       is being applied. In April’s statement, this invoice will not be displayed.

   2. Record layout of Customer Table for an open item system:
      Customer#, Name, Address
Ch. 11 The Revenue Cycle                       `                           SM 11-11


    3. Customer statement under balance forward system.


                                        XYZ Company
                                      Company Statement
                                      March 1 - March 31

                Customer #               6614
                Name                     Fred Marcus
                Address                  27 High Street
                                         San Jose, CA

                Balance forward:                                $ 27,000

                Date of transaction      Document #             Amount
                      Mar 10             Invoice 178              15,000
                      Mar 23             Payment 398            (20,000)

                Total amount due                                $22,000



4. Record layout for balance forward system Customer#, Name, Address,
Balance_Forward


P11.2. Journal Entry

Cash                               1,982.47*
  Cash short/over                                        1.05
  Sales                                              1,911.00
  Sales tax payable                                     70.42

* $2,082.47 (Cash at end of day) - $100 (Cash at beginning of day)
SM 11-12                             Part III Transaction Cycles and Accounting Applications


P11.3 Bowden Building Supplies
1. Each of the workflow controls listed in Key Point 4.7 is considered in turn.

   a. Segregation of duties among order entry clerk (authorization and record),
   warehouse employee, driver (execution), and billing clerk (record).

   b. Using information from prior events. Delivery slip with order information is used
   by the warehouse employee to pick the goods. Driver compares goods to the delivery
   slip. Customer reviews delivery slip and then signs.

   c. Required sequence of events. The company requires this sequence of events: create
   delivery slip, pick goods, deliver goods, customer signature, bill customer. No other
   sequence is possible in this system.

   d. Following-up on events. The billing clerks compares the signed delivery slips to
   the original received from the order entry clerk. Any slips that were not followed by
   delivery can be investigated.

   e. Prenumbered documents. The delivery slips are pre-numbered facilitating the
   follow-up described above.

   f. Accountability --- recording of internal agent(s) responsible for an event. There is
   no indication of this in the system, except that the external agent (customer) must sign
   the delivery slip. More accountability could be created by also requiring the picker
   and delivery person to add their initials to the delivery slip.

   g. Limitation of access to assets and information. The narrative does not make this
   clear. However, access to the inventory could be limited to the warehouse employee,
   access to order entry records could be limited to the order entry clerk, and access to
   the truck could be limited to the driver.

   h. Reconciliation of records with physical evidence of assets. This is not in the
   system described.

2. Driver keeps cash and pockets delivery slip. The billing clerk would detect the
missing delivery slip when making sure that the sequence of prenumbered delivery slips
is complete.

3. Driver steals unordered goods. This could be prevented by not giving the driver
access to the warehouse.

4. Driver steals ordered goods: The customer will not sign the delivery slip.

5. Wrong recording of amount by billing clerk. She will catch her own error when she
compares her calculated batch control total with the information entered into the
computer.
Ch. 11 The Revenue Cycle                                `                                            SM 11-13




P11.4 Smith’s Video Shoppe
1. The system uses a real-time system to record rentals, but not returns.

2. The amount due is shown in the table below. Although the current date is 12/20/06, the earliest
that a customer could make a return is 12/21/06 since it is the end of the business day on 12/20.

    Customer#   Rental#    Actual or earliest       Date_Due   Days past   Late charge and
                           possible return date                due         amount due
    101         301        12/18/06                 12/17/06   1           1 x $2 = 2
                                                                                    Subtotal   $2

    102         303        12/21/06                 12/18/06   3           3 x $2 = $6
                304        12/21/06                 12/20/06   1           1 x $2 = $2
                                                                                    Subtotal   $8

    103         302        12/19/06                 12/17/06   2           2 x $2 = $4
                305        12/21/06                 12/18/06   3           3 x $2 = $6
                                                                                    Subtotal   $10

                                                                               Grand Total     $20



3. The need for the Returns Table could be eliminated by adding a ―Date_Returned‖ field to the
Rentals Table.


4. Data entry screen to record rentals.

          Customer# 105               Customer Name John Smith
          Date: 12/28/06

          Rental#          Video #                Video Title                     Price Due Date
          310              201                    Gone with the Wind              $5.00 12/31/06
          311              203                    Austin Powers                   $4.00 12/31/06

          Data in gray were provided by the system using defaults or information from
          other tables.

A drop-down list taken from the Customer Table with Name and Customer# could be helpful in
entering the Customer#. Since it appears that the due date is frequently three days after the rental
date, a default Due_Date could be provided by the computer by adding three days to the current
date. Referential integrity could be enforced so that any Video_Title# entered during rental must
have a matching record in the Video_Titles table. The Rental# could be automatically assigned
by the computer.
SM 11-14                               Part III Transaction Cycles and Accounting Applications



5. Adding the clerk’s employee number to the RENTALS table would enhance accountability.


6. When the rental table records are posted (a) the fields in the Video_Title Table for
Copies_on_Loan and YTD_Rentals are increased and (b) the Post_Date field in the
Rentals Table is set to the date of posting.


                    ACCOUNTING SOFTWARE EXERCISES
All of the following questions were answered using Great Plains

A11.1. Revenue cycle menu
Below is an identification of the Great Plains menu items that are similar to the menu
items in ELERBE’s revenue cycle menu. In Great Plains the user moves through a series
of menus and submenus as described below.

 ELERBE’s Revenue Cycle Menu               Your software acquisition menu
 Enter sales orders                        Transactions --> Sales --> Sales Transaction Entry-->
                                           Enter Order *
 Enter shipments                           Transactions --> Sales --> Order Fulfillment
 Enter sales invoice                       Transactions --> Sales --> Invoice Entry
 Enter collections                         Transactions --> Sales --> Cash Receipts
 Enter deposits                            Transactions --> Financial --> Bank Deposit Entry
 Post sales invoices                       Transactions --> Sales --> Series Post
 Post collections                          Transactions --> Sales --> Series Post
 Purge records                             Routines --> Sales --> Paid Transactions Removal
       * The user first selects Transactions from the main menu, then Sales from the
       Transactions menu, then Sales Transaction Entry from the Sales Menu, and finally Enter
       Order.

A11.2. Revenue cycle reports
Below is an identification of the Great Plains sample reports that are similar to the reports
in ELERBE’s revenue cycle menu.

       Reports under ELERBE’s system                      Sample Reports from Great Plains
       Sales journal                                      Sales Posting Journal
       Cash receipts journal                              Cash Receipts Posting Journal
       Open customer orders report                        Sales Open Order Report
       Aged accounts receivable --- detail                Aging Report -- Detail , Receivables
                                                          Management
       Aged accounts receivable --- summary               Aged Trial Balance -- Summary,
                                                          Receivables Management
Ch. 11 The Revenue Cycle                        `                               SM 11-15


A11.3. Sales invoice identification
When the Enter Invoices window opens, and the user clicks in the Document field, an
invoice # is automatically entered.

A11.4. Applying collections to invoices
Collections are applied to invoices using the Apply Sales Documents form.

A11.5. General ledger distribution
You can record the general ledger account numbers and amounts for a particular sales
invoice by selecting the Distributions button on the Invoice Entry form.

A11.6. Deposits
After the Bank Deposit Entry form is opened, undeposited receipts are displayed. The
user then clicks on the particular receipt transactions that will be deposited.

A11.7. Open item and balance forward statements
Under Great Plains, you can create some customer accounts that use the open-item
system, and some accounts that use the balance forward system. When adding a
customer, the Customer Maintenance Options Form provides radio buttons to select
between Balance-Forward and Open-Item.

A11.8. Purging records
For open item customers, the procedure for deleting invoice and payment records that are
no longer needed is to choose Routines, then Sales, then Paid Transactions Removal. For
balance forward customers, at the end of a period, the user selects ―Balance Forward
Consolidation‖ within the Paid Transactions Removal form. This computes the current
balance, removes the transactions and updates the balance forward for the next period so
that it equals the current balance. In either case, deleted transaction records can be
archived in a history file.




                           COMPREHENSIVE CASE

See solution to entire case in separate file.

				
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