Principles Of Auditing & Other Assurance Services
Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Chapter 11, Problem 1RQ

Explain the difference between a customers order and a sales order, as these terms might be used by a manufacturing company making sales on credit.

Expert Solution & Answer
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To determine

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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Students have asked these similar questions
In the revenue cycle (for sales on credit), a customer places an order for a certain product. Which step does not occur before shipping the goods to the customer? Check inventory availabilityPick and pack the goodsCheck customer creditBill the customerObtain the customer order
Provide one example of a transaction that affect  service business and  merchandise business.
Which files do you usually find in a sales order module versus an account receivable (customer module)? Why does this difference exist?

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Principles Of Auditing & Other Assurance Services

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