Page 185 - Accounting Information Systems

156 PART II Transaction Cycles and Business Processes

FI GU RE
4-2 SALES ORDER

CREDIT SALE INVOICE

MONTEREY PENINSULA CO-OP INVOICE NUMBER
527 River Road
Chicago, IL 60612
(312) 555-0407

SOLD TO
FIRM NAME INVOICE DATE
ATTENTION OF PREPARED BY
ADDRESS CREDIT TERMS
CITY
STATE ZIP
CUSTOMER PURCHASE ORDER
NUMBER SHIPMENT DATE
DATE SHIPPED VIA
SIGNED BY B.O.L. NO.

QUANTITY PRODUCT QUANTITY UNIT
ORDERED NUMBER DESCRIPTION SHIPPED PRICE TOTAL

TOTAL SALE
CUSTOMER
ACCT. NO.
VERIFICATION

must be located and picked from the warehouse shelves. It also provides formal authorization for ware-
house personnel to release the specified items. After picking the stock, the order is verified for accuracy
and the goods and verified stock release document are sent to the ship goods task. If inventory levels are
insufficient to fill the order, a warehouse employee adjusts the verified stock release to reflect the amount
actually going to the customer. The employee then prepares a back-order record, which stays on file until
the inventories arrive from the supplier (not shown in Figure 4-1). Back-ordered items are shipped before
new sales are processed.
Finally, the warehouse employee adjusts the stock records to reflect the reduction in inventory. These
stock records are not the formal accounting records for controlling inventory assets. They are used for
warehouse management purposes only. Assigning asset custody and accounting record-keeping responsi-
bility to the warehouse clerk would violate a key principle of internal control. The inventory control func-
tion, discussed later, maintains the formal accounting inventory records.