An auditor's working papers include the following narrative description of the sales cycle for Lomax Corporation, a wholesaler of specialty plumbing supplies. Its customers are solely contractors. Assume that all sales are made via customer orders. Narrative Typically, a customer calls into the sales department to inquiry about parts availability and prices. If parts are wanted, a salesperson prepares a sales order which includes a price that is automatically taken from the master price list file. The pre- numbered sales order has two copies: one goes to the credit department and one goes to the shipping department. The copy that goes to the credit department is used to determine whether credit will be granted to the customer. If the customer's existing credit limit is exceeded, then credit will be denied. For new customers, approval by the credit manager is based on the manager's familiarity with the contractor's reputation. After credit is approved, the sales order with a notation of credit approval is forwarded to accounting for preparation of the invoice. chinning