The inventory control clerk examines the inventory records for items that must be replenished and prepares a two-part purchase requisition. Copy 1 of the requisition is sent to the purchasing department and Copy 2 is filed. Upon receipt of the requisition, the purchase clerk selects a supplier from the valid vendor journal (reference file) and prepares a three-part purchase order. Copy 1 is sent to the supplier, Copy 2 is sent to the accounts payable department where it is filed temporarily, and Copy 3 is filed in the purchasing department. A few days after the supplier ships the order, the goods arrive at the receiving department. They are inspected and the receiving clerk prepares a three-part receiving report describing the number and quality of the items received. Copy 1 of the receiving report accompanies the goods to the warehouse, where they are secured and the receiving report is filed. Copy 2 is sent to inventory control, where the clerk posts to the inventory records (journal) and files the document. Copy 3 is sent to the accounts payable department, where it is filed with the purchase order. A day or two later, the accounts payable (AP) clerk receives the supplier’s invoice (bill) for the items shipped. The clerk pulls the purchase order and receiving report from the temporary file and compares the quantity ordered, quantity received, and the price charged. After reconciling the three documents, the clerk enters the purchase in the purchases journal and posts the amount owed to the accounts payable subsidiary ledger. On the payment due date, the AP clerk posts to the AP subsidiary ledger to remove the liability and prepares a voucher authorizing payment to the vendor. The voucher is then sent to the cash disbursement clerk. Upon receipt of the voucher, the cash disbursements clerk prepares a check and sends it to the supplier. The clerk records the check in the check register and files a copy of the check in the department filing cabinet. Prepare a data flow diagram and document flow chart of the expenditure cycle procedures previously describe
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
The inventory control clerk examines the inventory records for items that must be
replenished and prepares a two-part purchase requisition. Copy 1 of the requisition is
sent to the purchasing department and Copy 2 is filed.
Upon receipt of the requisition, the purchase clerk selects a supplier from the valid
vendor journal (reference file) and prepares a three-part purchase order. Copy 1 is sent
to the supplier, Copy 2 is sent to the accounts payable department where it is filed
temporarily, and Copy 3 is filed in the purchasing department.
A few days after the supplier ships the order, the goods arrive at the receiving
department. They are inspected and the receiving clerk prepares a three-part receiving
report describing the number and quality of the items received. Copy 1 of the receiving
report accompanies the goods to the warehouse, where they are secured and the
receiving report is filed. Copy 2 is sent to inventory control, where the clerk posts to the
inventory records (journal) and files the document. Copy 3 is sent to the accounts
payable department, where it is filed with the purchase order.
A day or two later, the accounts payable (AP) clerk receives the supplier’s invoice (bill)
for the items shipped. The clerk pulls the purchase order and receiving report from the
temporary file and compares the quantity ordered, quantity received, and the price
charged. After reconciling the three documents, the clerk enters the purchase in the
purchases journal and posts the amount owed to the accounts payable subsidiary ledger.
On the payment due date, the AP clerk posts to the AP subsidiary ledger to remove the
liability and prepares a voucher authorizing payment to the vendor. The voucher is then
sent to the cash disbursement clerk.
Upon receipt of the voucher, the cash disbursements clerk prepares a check and sends it
to the supplier. The clerk records the check in the check register and files a copy of the
check in the department filing cabinet.
Prepare a data flow diagram and document flow chart of the expenditure cycle procedures previously describes
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