chap008 - Chapter 8 The Sales/Collection Business Process...

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Chapter 8 The Sales/Collection Business Process Review Questions R1. List three objectives of the sales/collection process. Minimize the amount of time between the selection of products and services and the collection of cash. Minimize the amount of cash that is not collected from customers for goods and services provided. Structure product quality and price to balance customer value and organization profitability. R2. How is the sales/collection process related to the conversion process, the acquisition payment process, and the financing process? The interaction between the sales/collection process and other business processes is fairly straightforward. Inventory made available by the conversion and acquisition/payment processes is sold in the sales/collection process. The cash receipts generated by the sales/collection process are made available to the financing process. The number of units expected to be sold in the sales/collection process, adjusted for desired changes in inventory balances, determines the number of units that an organization should plan to produce in the conversion process. Planned production drives the amount of materials and other resources to be acquired in the acquisition/payment process, as well as personnel resources used and paid for through the human resource process. This planning determines the financial resources that an organization must secure and manage through the financing process. R3. What is the difference between a customer order and a sales order? The difference between a customer order and a sales order is based on the origination of the source documents and the status of an order. A customer order is an external source document — it was created by the customer and has the customer’s format and reference number. A sales order is an internal document — it has an organization’s own format and internal reference number. Customer order data is simply copied onto the sales order document. In addition, some organizations refer to a sales order as a customer order that has been reviewed and approved (e.g., the organization has performed a credit check and an inventory availability check). 104 Solutions Manual to accompany Dunn, Enterprise Information Systems: A Pattern Based Approach, 3e
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Chapter 8 R4. Explain the difference between a sales order and a sales invoice. A sales order document is used to record the items ordered by the customer and the reviews and approvals of a customer order. A sales invoice document is used to bill the customer for the items shipped. It is also used as the basis for calculating and recording sales revenue. In a traditional accounting system, the sales invoice is used to record the entry in the sales journal. No journal entry is made as a result of an order. R5.
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chap008 - Chapter 8 The Sales/Collection Business Process...

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