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goods and services
sold are 
correctly invoiced
. 

All 
invoices
raised 
relate to goods and services
that have been 
supplied
by 
the business.

Credit notes
are only given for 
valid reasons
. 
Recording, 
accounting and 
credit control

All sales that have been 
invoiced
are 
recorded
in the general and receivables 
ledgers. 

All 
credit notes
that have been 
issued
are 
recorded
in the general and 
receivables ledgers. 

All 
entries
in the receivables ledger are 
made
to the 
correct
receivables ledger 
accounts
. 

Cut-off
is applied correctly to the receivables ledger.

Potentially 
doubtful debts
are 
identified
. 
BPP Tutor Toolkit Copy

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CHAPTER 8
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THE ROLE OF ACCOUNTING 
 
223 
6.3.2 Controls 
The tests of controls of the 
sales system
will be based around:

Selling 
(authorisation) 

Accounting 
(recording) 

Goods outwards (custody) 
6.4 Controlling cash 
Cash and petty cash must be regularly reconciled.
Although we still talk in terms of cash, very few business transactions involve its use. Even at the retail 
level, many purchases are now being made by debit and credit card. 
When we consider sales and purchases made on credit between businesses, transfer of funds will 
probably be by: 

Company 
cheque 

Internet transfer, or in some cases 

Bank 
transfer 

Standing order/direct debit 
The only use of cash in non-retail businesses will probably be for petty cash. So what controls need to 
be in place? 
6.4.1 Control over receipts 
In any business controls over cash