Ch.7+Slides - REVENUE AND COLLECTIONS CYCLE Chapter 7...

Info icon This preview shows pages 1–6. Sign up to view the full content.

REVENUE AND COLLECTIONS CYCLE Chapter 7
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Accounts in the AR/Revenue Cycle Accounts Receivable Sales Revenue Cost of Goods Sold Inventory Cash Accounts Receivable What journal entries are associated with the revenue cycle? Bad Debt Expense Allowance for Doubtful Accounts Sales Returns and Discounts Accounts Receivable
Image of page 2
Audit Risk Model – By Account AR = IR x CR x DR ? ? ? Debt? Revenue / Sales? Accounts Receivable? Allowance for Bad Debt? Which assertion(s) most important? (What could go wrong?)
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Basic Functions of the Revenue Cycle 1. Receiving and Processing Orders 2. Delivery 3. Billing and Accounting for AR 4. Collections and Deposits of Cash
Image of page 4
Revenue Recognition Must be (1) realized or realizable and (2) earned Four Criteria for Recognition 1. Persuasive evidence of an arrangement exists 2. Delivery has occurred or services have been rendered 3. The seller's price to the buyer is fixed or determinable 4. Collectability is reasonably assured 7-5 Review customer order/contract for existence and accuracy
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern