Discuss the four business functions that result in sales transactions in a typical sales and collection cycle and, for each function, state the key documents and records involved.

Discuss the four business functions that result in sales transactions in a typical sales and collection cycle and, for each function, state the key documents and records involved.

Answer:

The four business functions that result in sales transactions, and related documents and records, are:

• Processing customer orders. Key documents include customer order and sales order.
• Granting credit. Customer order or sales order.
• Shipping goods. Shipping document (bill of lading).
• Billing customers and recording sales. Sales invoice, sales journal, summary sales report, accounts receivable master file, accounts receivable trial balance, and monthly statements.