Objective: The objective of this assignment is to learn to effectively research a technical aspect of
accounting and communicate professional advice to a client. Using the Accounting Standard to consider which topic is suitable for AASB
Topic 1:
A large number of customers buy our products on a wholesale basis for their sales outlets and have set up credit facilities with us. As a company that prides itself in preserving and pickling fresh produce we like to make sure that our products reach as many people as possible. So, in addition to the retail customers (Customer Type A) and supplying wholesale distributors (Customer Type B), we also entered into agreements with a number of cafes, motels and souvenirs style shops that sell Australian made products to tourists (Customer Type C). These customers hold our products on their shelves and when our representative visits them on a monthly basis, they return any items that are unsold and accept another batch of products from us. They are then invoiced for the items sold by them and payment is made within a month after the date of the invoice. At present, we record the sales entry on receipt of the money from all types of customers as that seems to be the most consistent way to do this. The moment we receive the cash we enter the sale in our books and then bank the cash received. The newly appointed Finance Director has informed the board that he thinks this is incorrect and should be changed and Charade Flam the financial controller thinks he may be correct. Do we need to change the way in which we account for sales revenue and if so what does it involve?
The topic 1: When you recognize revenue and What is suitable for customer type A,B and c
Giving the recommendation what they have to do. What AASB associate with this topic? Your answer only 1 page.
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