Concept explainers
Explain the difference between a customer’s order and a sales order, as these terms might be used by a manufacturing company making sales on credit.
Differentiate between the customer’s order and a sales order.
Explanation of Solution
Customer’s order:
The customer’s order is nothing but the purchase order given by the customer. This document will have the specification of the goods or services to be delivered to the customers from their end.
Sales order:
The sales order is the document created based on the purchase order of the customer. This document will have all the specification for the different departments involved in delivering the goods or services to the customers such as credit department, shipping department, billing department, and accounts receivable department.
Difference between the customer’s order and sales order:
The major difference between the customer’s order and the sales order is the details of the documents. As the customer’s order is the external order created by the customer whereas sales order is the internal order created based on the purchase order.
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Chapter 11 Solutions
Principles Of Auditing & Other Assurance Services
- Explain the difference between external transactions and internal transactions. If a company purchases supplies from a local vendor, would this be classified as an external or internal transaction?arrow_forwardMost of the accounting cycles have journal entries that accompany the activities of each cycle. Which of the below expenditure or revenue cycle activities will not have journal entries? Processing the sales orderBilling the customerPaying a supplierReceiving payment from the customerReturning inventory to supplierarrow_forwardMost of the accounting cycles have journal entries that accompany activities of each cycle.Which of the below expenditure or revenue cycle activities will not have journal entries? Processing the sales orderBilling the customerPaying a supplierReceiving payment from the customerReturning inventory to supplierarrow_forward
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