Accounting Information Systems: The Processes and Controls, 2nd Edition

SALES PROCESSES (STUDY OBJECTIVE 2)

The business process map in Exhibit 8-2 depicts the activities related to sales processes. Exhibit 8-3 shows a document flowchart for the sales process, and Exhibit 8-4 shows the sales process in a data flow diagram (DFD). The process begins when a buyer, or customer, places an order with the company. The form designating this order is referred to differently by the customer and seller. From the customer's perspective, this order is called a purchase order (because it is making a purchase), while the seller refers to this same order as a sales order (because it is making a sale). A customer's purchase order is the source document that conveys the details about the order. When a customer's purchase order is received, it must be entered into the seller's system as a sales order. Depending on the extent of computerization of the seller's system, this could be either manually entered or read automatically by the system.

Sales orders are calculated on the basis of current selling prices of the items sold. The source of these prices is the price list. A price list is the entire set of preestablished and approved prices for each product. In most accounting software systems, selling prices are attached to each product in the company's inventory. Exhibit 8-5 (on page 307) shows a price list for a product in Microsoft Dynamics^®. Notice that the same item includes different prices for sales by the case and sales by the individual unit.

Once a sales order ...