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how does “select a sample of GDN both pre and post year end; follow through to sales invoices in the correct accounting period” ensure the cut off is correct?
when should i recognise sales? is it when the goods are delivered or when the sales invoice is issued?
Sales are normally recognised when the goods are dispatched and this is indicated by the date on the dispatch note.
Noted!
but how does “selecting a sample of GDN around the year end and follow through to sales invoice” ensure cut off of revenue?If the despatch is before year end, the sale has been made before year end and should be included in revenue and receivables. The first stage in that would be ensuring that the invoices was raised and posted before year end.
Similarly, if the despatch was before year end no invoice should be posted to sales and receivables before year end.
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