The Revenue Cycle

Chapter 4
The Conceptual System
• Overview of Revenue Cycle Activities
• Sales Order Procedures
• Receive Order
• Check Credit
• Pick Goods
• Ship Goods
• Bill Customer
• Update Inventory Records
• Update Accounts Receivable Records
• Post to General Ledger
• Sales Return Procedures
• Prepare Return Slip
• Prepare Credit Memo
• Approve Credit Memo
• Update Sales Journal
• Update Inventory and AR Records
• Update General Ledger
• Cash Receipts Procedures
• Open Mail and Prepare Remittance List
• Record and Deposit Checks
• Update Accounts Receivable Records
• Update General Ledger
• Reconcile Cash Receipts and Deposits
Physical Systems
• Basic Technology Revenue Cycle
• Basic Technology Sales Order Processing System
• Sales Department
• Credit Department Approval
• Warehouse Procedures
• The Shipping Department
• The Billing Department
• Accounts Receivable, Inventory Control, and General Ledger Departments
• Basic Technology Cash Receipts System
• Mail Room
• Cash Receipts
• Accounts Receivable
• General Ledger Department
• Controller’s Office
• Advanced Technology Revenue Cycle
• Integrated Sales Order Processing System
• Sales Procedures
• Integrated Cash Receipts System
• Mail Room
• Cash Receipts Department
• Automatic Data Processing Procedures
• Controller’s Office
• Revenue Cycle Risks and Internal Controls
• Risk of Selling to Un-Creditworthy Customers
• Physical Controls
• Transaction Authorization
• Segregation of Duties
• IT Controls
• Automated Credit Checking
• Risk of Shipping Customers Incorrect Items or Quantities
• Physical Controls
• Independent Verification
• IT Controls
• Scanner Technology
• Automated Inventory Ordering
• Risk of Inaccurately Recording Transactions in Journals and Accounts
• Physical Controls
• Transaction Authorization
• Accounting Records
• Prenumbered Documents
• Special Journals
• Special Journals
• Subsidiary Ledgers
• General Ledgers
• Files
• Independent Verification
• IT Controls
• Data Input Edits
• Automated Posting to Subsidiary and GL Accounts
• File Backup
• Risk of Misappropriation of Cash Receipts and Inventory
• Physical Controls
• Transaction Authorization
• Supervision
• Access Controls
• Segregation of Duties
• IT Controls
• Multilevel Security
• Risk of Unauthorized Access to Accounting Records and Reports
• Physical Controls
• Access Controls
• Segregation of Duties
• IT Controls
• Passwords
• Multilevel Security
Point-of-Sale (POS) Systems
• Daily Procedures
• End-of-Day Procedures
• Point-of-Sale Control Issues
• Authorization
• Supervision
• Access Control
• Accounting Records
• Independent Verification
• Reengineering Using EDI
• Doing Business via EDI
• Reengineering Using the Internet
• Doing Business on the Internet