ACCOUNT RECEIVABLES BUSINESS PROCESS AND CASH SALES. SISTEM INFORMASI AKUNTANSI. Describe the customer account management business process. Learning Objective 1. Customer Account Management Business Process. The customer account management business process includes accounts
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AND CASH SALES
SISTEM INFORMASI AKUNTANSI
The customer account management
business process includes accounts
receivable processing through
the collection of customer
payments on account.
Accounts receivable also
maintains customer credit and
payment history information.
This information is essential in
the customer order management
A subsidiary ledger of individual
accounts is maintained, with a
control account in the general ledger.
Remittance advices are routed
from the cash receipts functions.
Credit memos and other invoice adjustments
are routed from the billing department.
There are two basic approaches to
an accounts receivable application.
What are these approaches?
1. Open-item processing
2. Balance-forward processing
PostControls in the AccountsReceivable Business Process
memoControls in the AccountsReceivable Business Process
StatementsControls in the AccountsReceivable Business Process
The basic feature in a write-off process
is an analysis of past-due accounts.
This is usually done with an
aged trial balance report.
Confirmation of write-off sent to customerWrite-Off Accounts Receivable
A cash-received-on-account business
process is used when there is an
existing customer account balance.
Cash received on account typically
comes into a business through the
mail or is paid in person to a
central cashier or a cash window.
Customer payments should
always be acknowledged.
The recorded receivable that exists
prior to the payment enhances
control over payments received.
The major control feature of cash-received-
on-account business process is the
separation of the following functions:
What is float?
It is the time between the signing of the
payment check by the customer and the
moment the firm has use of the funds.
A lock-box system reduces the float by
having the checks deposited to a firm’s
account before the firm processes them.
The significant difference between a cash
sales business process and a cash-received-
on-account business process is that there
is no previous asset record in a cash
sales business process.
Cash sales are recorded in a cash register or
other secure device to provide documentation.
What is customer audit?
It is a general term used to describe
procedures in which the customer
acts as a control over the initial
documentation of a transaction.
What are some of these procedures?
Pricing in such a way that
the customer expects change
Awarding a customer free
items if the receipt has a mark