How to Audit: Credit Sales
How to Audit: Credit Sales
Credit sales represent the primary goods of a trading company which are advanced to the consumers of the goods before the actual payment is received. In accounting, a debtor or customer account is created and it represents the amounts of credit sales of a company. Here is how you audit this account.
Consider this your very own checklist. It contains all the important aspects which you should consider as an auditor in a short and precise point wise manner for easy execution of work.
The credit sales should be verified by reference to copies of invoices issued to customers and, in the process, attention should be paid to the following matters-
- that each item of sales in this account relates to the accounting year under audit;
- that the goods are those that are normally dealt in by the concern, ie the primary trading goods. It should not be a one time sale.
- that the sale price has correctly arrived from the invoice including the requisition slip from the Sales department and the dispatch note of such good.
- that the amount of the invoice has been adjusted in an appropriate account; and
- that the sale has been authorised by a responsible official. He has initialed the invoice and in case of alterations, attests the invoice himself.
If you have any queries, please feel free to comment.
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