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Dear Kim,
Please consider this extract and the following questions:
EXTRACT (Ref: Q229 AMBERJACK; Kaplan Kit):
“Due to the recent growth of the company, and as there are a large number of sales invoices,
additional temporary staff members have been appointed to help the sales clerks to produce
the sales invoices. The sales invoices are prepared using quantities from the GDNs and prices
from the authorised sales prices list, which is updated every six months. ”QUESTION:
Why is the fact that the invoices are prepared using only the quantities on the GDNs not a deficiency?
Shouldn’t there be a 3-way match to ensure that the quantity despatched matches the quantity actually ordered (which can only be confirmed from the sales order form)?
P.S.: In my attempt to answer the question, I treated it as a deficient control, but the examiner’s comment clearly stated that it was not, but it never explained “why”.
Moreover, I’ve attempted questions which stressed on matching the order form, the GDNs and the invoices, and the information in this scenario is not so different.
In practice 3-way matching is a payment verification technique – i.e. before you pay a supplier you agree that what you have been invoiced for is what you received – and what you ordered.
Whether thinking about a sales or purchases system and invoice s/be matched to goods despatched/received – which should be matched to an order BUT many businesses won’t hold up invoicing customers/accepting invoices from suppliers if the quantity despatched/received does not match the order. This wil typically happen where the supplier does not have sufficient quantity in stock to fulfil an order. Eg – customer orders 100, only 70 in inventory – GDN says 70 and invoice based on 70. There’s no point matching to the order.
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