For a Firm That Practices Good Internal Controls in the Sales

question 48

Multiple Choice

For a firm that practices good internal controls in the sales and collections cycle, the function of indicating credit approval should be recorded on which of the following documents?

• A)Sales order
• B)Sales invoice
• C)Customer order
• D)Remittance advice

---

Definitions:

Sales Budget

An estimate of the expected sales revenue for a period, which serves as a foundation for a company's production and marketing planning.

Master Budget

An inclusive financial planning document that consolidates all individual budgets related to sales, cost of goods sold, operations, overheads, and capital expenditures.

Credit Sales

Sales made by a business where payment is delayed as per agreed terms with the buyer.

Cash Collections

The process of receiving cash payments from customers, typically for goods sold or services rendered.