Accounting Information System 3

1513 Words Jan 29th, 2011 7 Pages
Chapter 5 The Expenditure Cycle Part 1: Purchases and Cash Disbursements Procedures
Accounting Information Systems, 5th edition James A. Hall

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Objectives for Chapter 5
• Tasks performed during purchases and cash disbursement processes • Departments involved in purchases and cash disbursement activities and the flow of these transactions through the organization • Documents, journals, and accounts that provide audit trails, promote the maintenance of records, and support decision making and financial reporting • Risks associated with purchase and cash disbursements activities
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performs routine accounting tasks. • Purchasing - a computer program identifies inventory requirements • The following methods are used for authorizing and ordering inventories:
– the system prepares POs and sends them to Purchases for review, signing, and distributing – the system distributes POs directly to the vendors and internal users, bypassing Purchases – the system uses electronic data interchange (EDI) and electronically places the order without POs

Computer-Based Purchases
• Other tasks performed automatically by the computer: – updates the inventory subsidiary file from the receiving
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