Accounting Information Program 3

 Accounting Data System a few Essay

Section 5 The Expenditure Circuit Part 1: Purchases and Cash Disbursements Procedures Accounting Information Devices, 5th model James A. Hall

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Objectives for Chapter your five

• Duties performed during purchases and cash payment processes • Departments involved in purchases and cash disbursement activities and the flow of such transactions through the organization • Documents, journals, and accounts that provide examine trails, encourage the maintenance of records, and support making decisions and monetary reporting • Risks associated with purchase and cash payments activities plus the controls that reduce these kinds of risks • Operational features and the control implications of technology employed in purchases and cash payment systems

Buy Requisition 1


Money Disbursements a few

Receiving/ Inspection 3

Accounts Payable four


Goals of the Costs Cycle

• The goal of rendering needed solutions to corporation can be split up into a number of objectives: – – – – – – – purchase from trustworthy vendors order high quality products obtain best possible price purchase just items that are properly official have assets available when they are needed get only those items ordered ensure items are not shed, stolen, or perhaps broken – pay for the items in a timely manner

DFD of Acquisitions System

A Manual Acquisitions System

• Begins in Inventory Control when products on hand levels drop to reorder levels • A purchase requisition (PR) can be prepared and copies to sent to Getting and Accounts Payable (A/P) • Getting prepares a purchase order (PO) for each merchant and transmits copies to Inventory Control, A/P, and becoming


A Manual Purchases System

• Upon receipt, Receiving matters and inspects the goods.

– A impaired copy in the PO is used to pressure workers to count the products.

• A receiving statement is well prepared and replications sent to the raw materials store, Purchasing, Inventory Control, and A/P.

A Manual Purchases System

• A/P ultimately receives replications of the PUBLIC RELATIONS, PO, obtaining report, and the supplier's bill. • A/P reconciles these kinds of documents, posts the purchases journal, and records liability in the accounts payable additional ledger.

A Manual Buys System

• A/P regularly summarizes the entries in the purchases diary as a log voucher which can be sent to the General Ledger (G/L) department.

Inv-Control or Purchases


Accts Payable-Control CR • A/P also works on a money disbursements voucher and content it inside the voucher enroll.


A Manual Purchases System

• G/L division: – articles from the accounts payable log voucher for the general journal – reconciles the products on hand amount while using account brief summary received coming from inventory control

Manual Purchases Flowchart

DFD of Cash Disbursements System


Manual Money Disbursements Program

• Routinely, A/P queries the wide open vouchers payable file for items with repayments due: – A/P directs the voucher and supporting documents to Cash Disbursements – A/P updates the accounts payable subsidiary journal

Manual Funds Disbursements Program

• Cash Disbursements:

– prepares the check – records the info in a check register (cash disbursements journal) – returns paid discount vouchers to accounts payable, estafette the examine to the dealer – transmits a record voucher to G/L: Accounts Payable DOCTOR Cash CR

Manual Cash Disbursements Program

• G/L department gets:

– the journal coupon from money disbursements – a summary of the accounts payable subsidiary ledger from A/P

• The journal coupon is used to update the overall ledger. • The accounts payable control account is usually reconciled with the subsidiary summary.


Cash Disbursements Program

Computer-Based Accounting Systems

• CBAS technology can be viewed as a continuum with...

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