ACCA Applied Knowledge · Business and Technology · Financial systems and technology
A retailer's sales cycle begins when a customer places an order. Which of the following sequences shows the usual order of documents in the sales cycle?
The usual order is sales order, despatch note, sales invoice, then receipt of payment. The order is recorded first, goods are sent, the customer is billed, and finally cash is collected and recorded against the receivable.
- AInvoice, sales order, despatch note, credit check
- BSales order, despatch note, sales invoice, receipt of paymentCorrect
- CDespatch note, sales order, receipt of payment, invoice
- DSales order, receipt of payment, invoice, despatch note
Explanation
The customer's order is recorded first, goods are then despatched with a despatch note, an invoice is issued, and payment follows. The other sequences place documents in an illogical order, for example invoicing before the order exists.
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