Optimal Document Preparation and Entry Recording in the Sales and Cash Receipts Cycle

Understanding the Correct Order for Document Preparation and Entry Recording

At Waren Sports Supply, the correct order for document preparation and entry recording in the sales and cash receipts cycle is crucial for maintaining accurate financial records and ensuring smooth transactions. The following options were presented:

1. Option (a): customer order, bill of lading, sales invoice, entry in sales and accounts receivable subsidiary ledgers
2. Option (b): customer order, bill of lading, entry in sales and accounts receivable subsidiary ledgers, sales invoice
3. Option (c): customer order, entry in sales and accounts receivable subsidiary ledgers, sales invoice, bill of lading
4. Option (d): customer order, sales invoice, bill of lading, entry in sales and accounts receivable subsidiary ledgers
5. Option (e): customer order, sales invoice, entry in sales and accounts receivable subsidiary ledgers, bill of lading

Based on the information provided, the correct sequence for document preparation and entry recording is Option (a): customer order, bill of lading, sales invoice, entry in sales and accounts receivable subsidiary ledgers.

Understanding Cash Sales and Document Preparation Process

The term "Cash Sales" refers to transactions where customers pay for goods or services using cash instead of credit or other payment methods. In the sales and cash receipts cycle, the document preparation and entry recording process typically follows a specific sequence:

1. Customer order: The initial step where the customer places an order for goods or services.
2. Bill of lading: Document prepared to accompany the shipment of goods to the customer.
3. Sales invoice: Detailed invoice prepared outlining the transaction and amount owed by the customer.
4. Entry in sales and accounts receivable subsidiary ledgers: Recording the transaction in the company's ledgers to track sales and accounts receivable.

By following this sequence, companies like Waren Sports Supply can ensure accurate documentation of transactions and maintain organized financial records.

At Waren Sports Supply, which of the following is the correct order for document preparation and entry recording in the sales and cash receipts cycle?

The correct sequence at Waren Sports Supply starts with a customer order, followed by the preparation of a sales invoice, then the bill of lading, and ends with the entry into sales and accounts receivable subsidiary ledgers.