chap11 - The Revenue Cycle e e e e e e Respond to customer...

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1 The Revenue Cycle Respond to customer inquiries e Develop agreements with customers to provide goods and services in the future e Provide services or ship goods to the customer e Recognize claim for goods and services provided e Collect cash e Deposit cash in bank e Prepare reports
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2 Alternative Revenue Systems Characteristic System Requirements Alternative Ordering Methods 1. Order before delivery Track orders 2. Immediate customer pickup (no order) No need to track orders Alternative Payment Timing 1. Before delivery Track advance payments by customers 2. At the time of delivery Record cash collections, but may need to maintain customer balances 3. After delivery Track amounts owed by customers Alternative Forms of Payment 1. Cash Must reconcile cash collections with sales or reductions in A/R 2. Check Same as cash requirements If a check is returned nonsufficient-funds, must track amount owed by customers 3. Credit or debit card Must have equipment that can determine card validity Must send transactions to a third party Must save signed receipts for credit card purchase 4. Sales on account Must track amounts owed by store credit customers Must bill owners Must collect cash after sale Order Method Payment Timing Form of Payment Restaurant Order before delivery After service Cash, check or card Convenience Store No order At time of purchase Cash only Magazine Publisher Order (subscription) Before receipt Check or card Chapter Focus
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3 Revenue Cycle Events Accept order (El) A bookstore manager (customer) sends an order with details of all books (ISBN, author, title,  publication year, and quantity). The order entry clerk enters the order data into the computer. The  computer system checks whether the order is from an existing customer. If the order is from a  new customer, the clerk creates a customer record in the  Customer Table  in the computer  system. Then, the system checks the  Inventory Table  to determine whether inventory is  available. The order information is recorded in the Order and  Order_Detail  tables by ELERBE’s  computer system. The computer system also updates the Quantity_Allocated field in the  Inventory Table . The clerk prints two copies of the sales order.  One copy of the sales order is  sent to the warehouse to serve as a picking ticket. The second copy serves as a packing slip and is  sent to the Shipping Department. Pick goods (E2) A warehouse employee uses the picking ticket to locate goods to be picked. In addition to the  products and quantities, the picking ticket identifies warehouse locations to make it easy for  warehouse employees to assemble the order. The employee picks the goods from the warehouse  for shipping, packs the goods in a package, notes the actual amounts packed on the picking ticket,  and the package to the Shipping Department.
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This note was uploaded on 01/04/2012 for the course H 531 taught by Professor Dr.johnbutler during the Spring '11 term at Ohio State.

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chap11 - The Revenue Cycle e e e e e e Respond to customer...

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