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    Purchase System

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    reigne carlit
    The document outlines the key steps in a purchase processing system: 1. Inventory levels are monitored and a purchase requisition is created when inventory drops below reorder points. A purchase order is then prepared. 2. Upon receiving goods, a receiving report is prepared reconciling quantities received to the purchase order. Inventory and accounts payable records are then updated. 3. The accounts payable department reconciles receiving reports, purchase orders and vendor invoices in a three-way match. Payments are processed by preparing checks and updating accounts payable records. 4. Journal entries are made to record transactions in the general ledger, updating inventory, accounts payable and cash accounts.

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    Purchase System

    Uploaded by

    reigne carlit
    2 views2 pages
    The document outlines the key steps in a purchase processing system: 1. Inventory levels are monitored and a purchase requisition is created when inventory drops below reorder points. A purchase order is then prepared. 2. Upon receiving goods, a receiving report is prepared reconciling quantities received to the purchase order. Inventory and accounts payable records are then updated. 3. The accounts payable department reconciles receiving reports, purchase orders and vendor invoices in a three-way match. Payments are processed by preparing checks and updating accounts payable records. 4. Journal entries are made to record transactions in the general ledger, updating inventory, accounts payable and cash accounts.

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    The document outlines the key steps in a purchase processing system: 1. Inventory levels are monitored and a purchase requisition is created when inventory drops below reorder points. A purchase order is then prepared. 2. Upon receiving goods, a receiving report is prepared reconciling quantities received to the purchase order. Inventory and accounts payable records are then updated. 3. The accounts payable department reconciles receiving reports, purchase orders and vendor invoices in a three-way match. Payments are processed by preparing checks and updating accounts payable records. 4. Journal entries are made to record transactions in the general ledger, updating inventory, accounts payable and cash accounts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    2 views2 pages

    Purchase System

    Uploaded by

    reigne carlit
    The document outlines the key steps in a purchase processing system: 1. Inventory levels are monitored and a purchase requisition is created when inventory drops below reorder points. A purchase order is then prepared. 2. Upon receiving goods, a receiving report is prepared reconciling quantities received to the purchase order. Inventory and accounts payable records are then updated. 3. The accounts payable department reconciles receiving reports, purchase orders and vendor invoices in a three-way match. Payments are processed by preparing checks and updating accounts payable records. 4. Journal entries are made to record transactions in the general ledger, updating inventory, accounts payable and cash accounts.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    PURCHASE PROCESSING  Upon completion of the physical count and inspection, the receiving

    Purchases procedures include the tasks involved in


    clerk prepares a receiving report stating the quantity and condition
    identifying inventory needs – monitor inventory so that if umabot na of the inventories.
    sya sa reorder point or na meet na ung threshold kung kalian  A receiving report is prepared and copies send to the open/closed
    kailngan magorder PO file, raw materials storeroom, receiving report file, update
    reorder point- it tells you when to place an order so you won't run out Inventory records, AP department
    of stock
    placing the order – through the purchasing department UPDATE INVENTORY RECORD
    receiving the inventory,
    recognizing the liability. When we have the legal responsibility The quantity received will be recorded inventory subsidiary ledger
    and inventory summary in the general ledger. Organizations that
    MONITOR INVENTORY RECORDS.
     Firms deplete their inventories by transferring raw materials into use a standard cost system carry their inventories at a
    the production process (the conversion cycle) and by selling finished predetermined standard value regardless of the price actually paid
    goods to customers (revenue cycle.). When inventories drop to a to the vendor. Posting to a standard cost inventory ledger requires
    predetermined reorder point, a purchase requisition is prepared only information about the quantities received.
    and sent to the prepare purchase order function to initiate the
    purchase process SET UP ACOUNTS PAYABLE
    -purchase requisition –  when employee within your organization  When the invoice arrives, the AP clerk reconciles the financial
    creates to request a purchase of goods or services information with the receiving report and PO in the pending file.
    -purchase order –  official document issued by a buyer committing  three-way match, which verifies that what was ordered,(PO) was
    to pay the seller for the sale of specific products or services to be received(RR) and is fairly priced(invoice-actual amount).
    delivered in the future  Once the reconciliation is complete, the transaction is recorded in
    -valid vendor file -  a complete record of the supplier's relevant the purchases journal and posted to the supplier’s account in the AP
    information subsidiary ledger to recognize liability

    PREPARE PURCHASE ORDER. POST TO GENERAL LEDGER


     The prepare purchase order function receives the purchase  The general ledger function posts from the journal voucher to the
    requisitions. Purchasing dept will prepare a purchase order and is inventory and AP control accounts and reconciles the inventory
    sent to supplies, sent to the set up accounts payable (AP) function, control account and the inventory subsidiary summary.
    blind copy of purchase order is sent to the receive goods function,
    and to open/ closed purchase order file.

    RECEIVE GOODS. .
     Goods arriving from the vendor are reconciled with the blind copy
    of the PO. The blind copy, contains no quantity or price information CASH DISBURSEMENT SYSTEM
    about the products being received. The purpose of the blind copy is - The principal objective of this system is to ensure that only valid creditors
    to force the receiving clerk to count and inspect inventories prior to receive payment and that amounts paid are timely and correct.
    completing the receiving report. - to avoid making payments early, the firm forgoes interest income that it
    could have earned on the funds. I(maximize credit)
    - to avoid paying of obligations are obligations are paid late, however, the  Begins in Inventory control when inventory levels drop to reorder
    firm will lose purchase discounts or may damage its credit standing. levels
     A purchase requisition is prepared and copies sent to Purchasing
    Identify Liabilities Due. PR- purchase request form
     the cash disbursements process begins in the AP department  Purchasing prepares a purchase order for each vendor and send
    by identifying items that have come due. Each day, the AP function reviews copies to inventory control, AP and Receiving
     Upon receipt, receiving clerk will coun and inspect the goods
    the open AP file (or vouchers payable file) for such items and sends
    -a blind copy of PO is used to force workers to count the goods
    payment approval in the form of a voucher packet (the voucher and/or
     A receiving report id prepared and copes send to the raw materials
    supporting documents) to the cash disbursements department.
    storeroom, open/closed PO file, Purchasing, Inventory control, AP
    department and receiving report file.
    Prepare Cash Disbursement (to pay supplier using check)  AP eventually receives copies of the PR, PO, receiving report and
     The cash disbursements clerk receives the voucher packet and suppliers invoice
    reviews the documents for completeness and clerical accuracy. For  AP reconciles these documents, post to the purchases journal and
    each disbursement, the clerk prepares a check and records the record liability in the accounts payble subsidiary ledger
    check number, dollar amount, voucher number, and other pertinent  General ledger dept posts from the accounts payable journal
    data in the check register, which is also called the cash voucher to general ledger. Reconciles the inventor amount with the
    disbursements journal account summary receive from inceventory school

    CASH DISBURSEMENT SYSTEM


    Update AP Record.
     Upon receipt of the voucher pocket , the AP clerk removes the  Periodically, AP searcher the open vouchers payable file for items
    liability by debiting the AP subsidiary account or by recording the with payments due:
    check number and payment date in the voucher register. The -AP send the voucher and supporting ledger tp CASh disburesemnt
    voucher packet is filed in the closed voucher file, and an account -AP update the a account payable subisidiary ledger
    summary is prepared and sent to the general ledger function. Cash Disbursemnt. – prepares check, record infor, returns paid voucher to
    accounts payable, mails the check to the supplier, sends journal voucher
    Post to General Ledger.
     The general ledger function receives the journal voucher from * GL dept receives the journal voucher from cash disbusrment.
    cash disbursements and the account summary from AP. The Summary of the AP
    * the journal voucher is used to update the general ledger
    voucher shows the total reductions in the firm’s obligations and
    * the AP control account is reconciled with the subsirairy summary
    cash account as a result of payments to suppliers. These numbers
    are reconciled with the AP summary, and the AP control and cash
    accounts in the general ledger are updated accordingly. The
    approved journal voucher is then filed.

    PURCHASE SYSTEM

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