1Classes of Transactions in the Sales and Collection Cycle
The categories of transactions for the sales and collection cycle in a typical company: sales, cash receipts, sales returns and allowances, write-off of uncollectible accounts, and bad debt expense
2Sales and Collection Cycle
Involves the decisions and processes necessary for the transfer of the ownership of goods and services to customers after they are made available for sale; it begins with a request by a customer and ends with the conversion of material or service into an account receivable and ultimately into cash
3Business Functions for the Sales and Collection Cycle
The key activities that an organization must complete to execute and record business transactions for sales, cash receipts, sales returns and allowances, write-off of uncollectible accounts, and bad debt expense
4Direction of Tests
The starting point for testing the occurence and completeness transaction-related audit objectives; vouching from journals to source documents tests for occurence and tracing from source documents to journals tests for completeness.
5Design Format Audit Program
The audit procedures resulting from the auditor's decisions about the appropriate audit procedures for each audit objective; this audit program is used to prepare a performance format audit program.
6Performance Format Audit Program
The audit procedures for a class of transactions organized in the format in which they will be performed; this audit program is prepared from a design format audit program.
7Proof of Cash Receipts
An audit procedure to test whether all recorded cash receipts have been deposited in the bank account by reconciling the total cash receipts recorded in the cash receipts journal for a given period with the actual deposits made to the bank.
8Lapping of Accounts Receivable
The postponement of entries for the collection of receivables to conceal an existing cash shortage.