Ch 9-10

• Accounts receivable (AR) subsidiary ledger


  It contains details about the customer records.
• Analytical review


  It provides the auditor with an overall perspective for trends in sales, cash receipts, sales returns, and AR.
• Approved credit memo


  In cases in which specific authorization is required, the credit memo goes to the credit manager for approval. The credit manager evaluates the circumstances of the return and makes a judgment to grant (or disapprove) credit.
• Approved sales order:


  Triggers the continuation of the sales process by releasing sales order information simultaneously to various tasks.
• Batch controls


  Effective method of managing high volumes of transaction data through a system.
• Back-order


  The employee prepares a back- order record, which stays on file until the inventories arrive from the supplier. It is an order for a good or service that cannot be filled immediately due to a lack of available supplies.
• Bill of Lading:


  a formal contract between the seller and the shipping company (carrier) to transport the goods to the customer. This document establishes legal ownership and responsibility for assets in transit
• Cash receipts file


  When customer cash payments are received, they are matched to the open invoice record, which is then closed by placing the current date in the Closed Date field. At that time a record is added to the Cash Receipts File.
• Cash receipts journal


  All cash receipts transactions, including cash sales, miscellaneous cash receipts, and cash received on account, are recorded in the cash receipts journal.
• Confirmation of accounts receivable controller


  This test involves direct written contract between the auditors and the client’s customers to confirm account balances and transactions.
• Credit authorization


  A step in the revenue cycle where the copy of the sales order is sent to the credit department for approval.
• Credit memo


  Upon receipt of the return slip, the sales employee prepares a credit memo. This document is the authorization for the customer to receive credit for the merchandise returned
• Customer open order file


  : File containing a copy of the sales order.
• Customer order


  : Document that indicates the type and quantity of merchandise being requested.
• Deposit slip


  : Shows the amount of the day’s receipts and forwards this along with the checks to the bank.
• File copy


  : Prior to the arrival of the goods and the stock release copy, the shipping department receives a file copy, the packing slip, and shipping notice copies of the sales order from the sales department.
• Inventory subsidiary ledger


  : It updates inventory subsidiary ledger accounts from information contained in the stock release document and has its own record in the ledger
• Journal voucher file: 


  Processed in the current period file provides a record of all general ledger transactions and replaces the traditional general journal.
• Ledger copy: 


  Copying data from one ledger type to another.
• Negative confirmation: 


  This technique is used primarily when AR consist of a large number of low-value balances and the control risk of misstatement is considered to be low.
• Open-invoice system


  : Invoices are recorded individually rather than being summarized or grouped by creditor.
• Packing slip: 


  The slip will ultimately travel with the goods to the customer to describe the contents of the order
• Positive confirmation


  : Recipients are asked to respond whether their records agree or disagree with the amount stated.
• POS systems: 


  A point-of-sale (POS) system is used extensively in grocery stores, department stores, and other types of retail organizations. It is the hardware and software that enables you to make sales, accept payments, and check out customers.
• Remittance advices: 


  It contains information needed to service individual customers’ accounts
• Remittance list


  : The clerk who records each check on a form called a remittance list (or cash prelist), where all cash received is logged
• Return slip: 


  When items are returned, the receiving department employee counts, inspects, and prepares a return slip describing the items.
• Runs:


  The programs, called runs, each process a batch of sales order transactions in its entirety and then pass the batch to the next run.
• Sales invoice: 


  It is a tool that indicates the quantity and price of each product delivered to clients.
• Sales invoice file: 


  Along with the Line Item file, captures sales transaction data for the period. The Sales invoice file contains summary data for each invoice
• Sales journal


  : A special journal used for recording completed sales transactions. The details of sales invoices are entered in the journal individually.
• Sales journal voucher: 


  A voucher that includes the details of sales transactions and sales invoices
• Sales order: 


  Source document that captures such vital information as the name and address of the customer making the purchase; the customer’s account number; the name, number, and description of product; quantities and unit price of items sold; and other financial information.
• Shipping notice


  : Document that informs the billing department that the customer’s order has been filled and shipped
• S.O. pending file:


  Describes the products that were actually shipped to the customer.
• Stock records


  : These stock records are not the formal accounting records for controlling inventory assets. They are used for warehouse management purposes only.
• Stock release (picking ticket): 


  Document that identifies which items of inventory must be located and picked from the warehouse shelves.
• Universal product code (UPC)


  : UPCs identify and label products with barcodes. When all the UPCs are scanned, the system automatically calculates taxes, discounts, and the total for the transaction.
• Verified stock release

  : After picking the stock, the order is verified for accuracy and the goods and verified stock release document are sent to the ship goods task.
• Actual cost inventory ledger

  – It updates additional financial information, such as a copy of the supplier’s invoice when it arrives.