Invoice Approval and Data Processing:
By the time materials reach the receiving
department, the company unusually will have received the invoice from the
vendor.
This invoice and a copy of the purchase order are filled in the
accounting department. When the receiving report with its inspection reports
arrives, the receiving report and the invoice are compared to see that
materials received meet purchase order specifications as to items,
quantities, price extensions, discount and credit terms, shipping
instruction, and other possible conditions. I the invoice is found to be
correct or has been adjusted because of rejects as noted by the inspection
department, the invoice clerk approves it, attaches it to the purchase order
and the receiving report, and sends these papers to another clerk for the
preparation of the voucher.
Invoice approval is an important step in
materials control procedure, since it certifies that the goods have been
received as ordered and the payment can be made. The invoice approval
information is often built into a rubber stamp and each invoice is stamped.
The verification procedure is handed by
responsible invoice clerks, thus assuring systematic examination and
handling of the paper work necessary for adequate control of materials
purchases. The preparation of the voucher is based on the information taken
from the invoice approval stamp.
The voucher data are entered first in the
purchases journal and are posted to the subsidiary records. They are then
entered in the cash payments journal according to the due date for payment.
The original voucher and two copies are sent to the treasurer for issuance
of the check. The treasurer mails the check with the original voucher to the
vendor, files a voucher copy, and returns one voucher copy to the accounting
department for the vendors file. Purchase transactions entered in the
purchases journal affect the control accounts and the subsidiary records as
shown in the chart below:
|
Transaction |
General Ledger Control |
Subsidiary Records |
|
Debit |
Credit |
|
Materials
purchased for stock |
Materials |
Accounts Payable |
Entry in the
received section in the materials ledger card |
|
Materials
purchased for a particular job or department |
Work in process |
Accounts Payable |
Entry in the
direct materials section of the production or the job order
|
|
Materials and
supplies purchased for factory overhead purposes |
Materials |
Accounts Payable |
Entry in the
received section of the materials ledger card |
|
Supplies purchased
for marketing and administrative office |
Materials
Marketing expenses control
Administrative expenses control |
Accounts Payable |
Entry in the
received section of the materials ledger card or in the proper
columns of the marketing or administrative expenses analysis
sheets |
|
Purchases of
services or repairs |
Factory Overhead
Marketing expenses control
Administrative expenses control
|
Accounts Payable |
Entry in the
proper account columns of the expenses analysis sheet |
|
Purchase of
equipment |
Equipment |
Accounts Payable |
Entry on the
equipment ledger card |
|
|
