testing Sales figure

First, if testing Receivables, you include tests for assessing bad debt provision and ensuring customer credit limits have not been breached. But is there any place for these tests when asked to test only the Sales figure for Completeness & Accuracy. Not really audit sales separately from receivables

Does assessment of bad debt provision impact on the Sales figure (as opposed to the Receivables fig.)? No. The double entry would be CR Receivables (for a writeoff) or CR Provision and Dr Bad debt expense appropriately.

Second, if bad debts are assessed at x dollars, then should x dollars be deducted from the Sales figure (not just the Receivables) in the FS?No – as above

Third, if goods are returned after the year end, should they be deducted from the previous years sales figure? In general, yes. Although the return happened after year end this would be evidence that the sale had not really been successful and so should be adjusted

Fourth, what is the exact point at which a sale is recognised? Is it after invoicing or after supply of goods/services? It rather depends on the law and the contract. The most common time would be when the goods are despatched

Reason I ask is I’ve just done a practice question with a van rental Co. and the invoices were produced and posted to sales ledger before the date of the hiring/provision of service. I would have thought you shouldn’t include any as a sale until the van was physically hired out (after all, the customer might cancel their booking…), but the question simply acted as if the production of the invoice was the point the sale took place, even if it was ages until the service was actually supplied.I would tend to agree, but you would also need to take into account the accounting policies. I would argue that normal matching rules would strongly support your view that the sale takes place when the hiring happens