answer a questions

A-1 PBC 2019 Trial Balance

A-2 PBC 2020 Trial Balance

(Example) Revenue Narative

Apollo Accounting and Control Systems: Revenue and Collection Cycle As evident in the company organization chart (A-3), Apollo has several departments and offices concerned with management, accounting, and control. The company also has an abbreviated accounting and control manual (C-2), although the manual has not been kept up to date. Officers and employees have described accounting and control procedures informally under the heading of several transaction cycles. Descriptions of the company's current revenue cycle activities appear below.   Credit Approval and Sales Processing Customer orders are received primarily via the company website, but also accepted in the mail, over the telephone, and over the counter by salesclerks in the marketing department. Online orders are assigned an order number (RC #1) when completed by the customer or sales associate. The sales order documents used in the office are not prenumbered but are assigned an electronic number as soon as they are entered into the system. The clerks prepare online sales orders for telephone and counter customers, printing and then signing each one and asking the counter customers to sign in person. All sales orders contain the customer name, a customer number (usually the phone number/assigned immediately for new customers), customer address, identification of products, and the quantity ordered (RC #2). Hard copies of sales order forms with signatures are kept in the salesclerks’ working area through which many people pass during the day. All sales orders are entered into the computer system daily by the salesclerks (RC #3).   The salesclerks prepare an estimate of the dollar amount of the order and write it on the form. For online orders this is done automatically. The sales orders are then sent to the credit manager, who is also in the marketing department. The credit manager manually checks new customers’ credit file information using a computer-based inquiry system. If credit is approved, the credit manager approves the sales order. Online orders for established customers are automatically checked based on thresholds set and managed by the credit manager (RC #4).   If credit is not approved, the customer is asked to pay in advance, and the sales order is held until notification of payment is received from the cashier (RC #5). The sales order is stamped or marked “paid” and sent to the billing department (RC #6). Likewise, when customers pay cash over the counter, the money is taken by the cashier, and the sales order is marked “paid” within the sales order system and sent to the billing department. For bookkeeping convenience, these “cash” sales are treated the same as credit sales, with the invoice amount being charged to an account receivable set up for the customer, and the customer’s payment being applied immediately to the same account.   After credit has been approved, or a payment received, the sales orders are sent to the billing department in the controller’s office. The billing clerks produce a sales invoice assigned an invoice number by the system. They double check the customer and product information from the customer order, the date, and the product unit prices from an approved price list (RC #7). Sales taxes, delivery charges, and the invoice total are computed and put on the invoice.    The sales invoice, the customer order, and the sales order are sent to the accounts receivable accounting department, which is also in the controller’s office. These e-documents are held in invoice numerical order in a “pending shipment” file, awaiting matching with the shipping forms (RC #8).   Shipment and Delivery Upon receipt of a sales order which serves as the authorization to move goods to the shipping area (RC #9), the inventory storekeeper supervises removal of shoe products from shelves and bins. Warehouse employees utilize tablets and cloud based inventory tracking software to fulfill orders. The tablet displays sales order, and product location (RFID scanning technology) for all customer orders. As products are picked they are scanned and entered into software which flows through to the shipping receipt which flows to the sales invoice, adjusts inventory levels, and produces shipping information (weights, destination etc.). Before the package is shipped all documentation is reviewed by an inventory manager (RC #10). If partial orders are shipped due to lack of in stock inventory the sales order with the remaining items is placed in an electronic que (master pending file) to fulfill the order when inventory becomes available. Shipping information, once complete is sent to the billing and accounts receivable department.    

(Example) Revenue Controls Test

A - Voucher #38488 was not stamped paid per RC-6. However it appears that the payment was made (pmt ID -Wg%yo2). Therefore it appears that this incident was a minor oversight. No further testing necessary.

C-1 Purchase Narative

Asset or Supply Purchase Requisition For each required purchase the department manager of the requesting department will review and approve an employee's written request. Then he/she will submit a request via the intranet system to purchasing. Once reviewed by the purchasing team it is approved by the purchasing manager. Once approved the request is assigned to a purchaser who then places the order with a vendor from an approved vendor list. Receipt of Goods Once an approved purchase has been received it is opened and all contents are compared to the original purchase order and documented by an individual in the warehouse. Once the receipt of goods is complete it is sent to purchasing for matching to relevant documents and forwarding to either accounts payable or to be filed as complete. The goods are forwarded on to the requesting department. Cash Disbursements All disbursements shall be made by check, signed by the treasurer, including reimbursements of the petty cash funds. Checks shall be made payable to a named payee and not to “cash.” Blank check stock shall be kept under lock and key in the accounts payable accounting department. Under no circumstances may blank checks be signed by the treasurer. Voided checks shall be transmitted to the treasurer for inspection and later filed in numerical order with paid checks. Cash disbursement journal entries shall be dated with the date of the check. The related monthly general ledger summary entries shall carry the date of the month summarized.

C-2 Purchase Controls Test

F-1 Liabilities Lead Sheet

Tickmark Legend F - Footed without exception M - Amount is considered immaterial (<$126,373), no further work necessary. TB - Agrees to Trial Balance without exception PY - Agrees to prior year audited financial statements without exception

F-2 Debt Confirmations

The following documents were received from Confirmation.com, a bank confirmation clearinghouse. Received on 01/22, additionally received confirmations for cash, documented in the audit for cash.

F-3 AP Aged Schedule

Tickmark Legend F - Footed without exception M - Amount is considered immaterial (<$126,373), no further work necessary. TB - Agrees to Trial Balance without exception. Per the Legal confirmation at J-1 incurred legal fees as of 12/31 included 3,600,000 which had been incurred but not yet billed to Apollo.

F-4 Cash Disbursements Journal

Tickmark Legend F - Footed without exception M - Amount is considered immaterial (<$126,373), no further work necessary. TB - Agrees to Trial Balance without exception

D-4 Cut-off Bank Statement