Refer to Exhibit 9.1. Which accounts are relevant in the revenue cycle? Identify the relationships among them.

Transcribed Image Text:

Exhibit 9.1 Revenue Cycle Accounts Directly Related Accounts Customer A Customer B Customer C etc. A/R Subsidiary Ledger Total Sales % of Sales Cash Sales Credit Sales Indirectly Related Accounts Warranty Expense Key: Beginning Balance -Cash Sales Collections Other Receipts Ending Balance Beginning Balance -Credit Sales Ending Balance Write-Offs Repair Costs Transaction flow Balances should agree Cash Accounts Receivable Collections Sales Discounts Returns and Allowances Write-Offs Disbursements Allowances for Doubtful Accounts Beginning Balance Provision Ending Balance Warranty Liability Est. Expense (% of Sales) -Sales Discounts Sales Discounts Sales Returns and Allowances Returns and Allowances Provision % of Sales Bad Debt Expense Sales Commission Expense