Chapter 10 - Marketing/sales/collection/customer support process: Recording and evaluating revenue process activities. After completing this chapter, students will be able to: Describe how revenue activities are analyzed and recorded in the accounting system, explain how cost of goods sold activities are analyzed and recorded in the accounting system using FIFO and/or LIFO costing, discuss how uncollectible accounts are recorded,. | Chapter 10 Marketing/Sales/ Collection/ Customer Support Process: Recording and Evaluating Revenue Process Activities Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 10- What are the Primary Activities in the Revenue Process? Determine marketing and distribution channels Receive and accept orders Deliver goods/services Receive payment from customers Provide customer support 10- Which of the Revenue Process Activities are Accounting Events? Deliver goods/services Increase sales revenue Increase accounts receivable Increase cost of goods sold Decrease inventory Receive payment from customers Increase cash Decrease accounts receivable Provide customer support Various effects, depending on the support provided, see Chapter 8 for employee events 10- What is the Basic Flow of Information in the Revenue Process? Customer places an order and credit manager approves credit Warehouse releases goods and notifies shipping Shipping prepares shipping documents and ships the goods to the customer Billing prepares the sales invoice based on the sales order and the shipping notice Inventory, accounts receivable, and sales records are updated 10- Information Flow Continued The mail room receives payment and remittance advice from customers and prepares a remittance list Remittance list is used to update cash receipts and accounts receivable records The checks are deposited in the bank. 10- When are Revenues Recognized? When earned, regardless of when cash is received. Assume a December 31 year-end for the following examples. Example #1—provided services in November, send out bills in December, recognize revenue in ? November Example #2—received payment in November for services to be provided in December, recognize revenue in ? December, if services are provided Example #3—provided services and received payment in November, recognize revenue in ? November 10- What are the Accounts Used in the Revenue Process? . | Chapter 10 Marketing/Sales/ Collection/ Customer Support Process: Recording and Evaluating Revenue Process Activities Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 10- What are the Primary Activities in the Revenue Process? Determine marketing and distribution channels Receive and accept orders Deliver goods/services Receive payment from customers Provide customer support 10- Which of the Revenue Process Activities are Accounting Events? Deliver goods/services Increase sales revenue Increase accounts receivable Increase cost of goods sold Decrease inventory Receive payment from customers Increase cash Decrease accounts receivable Provide customer support Various effects, depending on the support provided, see Chapter 8 for employee events 10- What is the Basic Flow of Information in the Revenue Process? Customer places an order and credit manager approves credit Warehouse releases goods and notifies shipping Shipping prepares .
