Accounting information flows through the various accounts in the sales and collection cycle in which order? 1. Sales (cash and sales on account)
2) Cash receipts
3) Providing for doubtful debts
4) Sales returns and allowances
5) Write- off of uncollectible accounts
A) 1, 2, 3, 4, 5
B) 1, 3, 2, 4, 5
C) 1, 2, 4, 5, 3
D) 1, 2, 3, 5, 4

Question

Quizplus · Accepted Answer

The sales and collection cycle starts with sales (cash and sales on account) and is followed by cash receipts. After this, any potential losses due to doubtful debts are provided for. Next, any sales returns or allowances are accounted for. Finally, any uncollectible accounts are written off. Therefore, the correct order is 1, 2, 4, 5, 3. The best choice is C.

Accounting Information Flows Through the Various Accounts in the Sales