Question

เล. SYSTEM DOCIENTATON--EXPENDITURE CYCLE (MANUAL PROCEDURES) The folowing describes the expenditure cycle manual procedures for a hypothetical company. 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 fied. Upon receipt of the requisition, the purchasing clerk selects a supplier from the valid vendor file (reference fie) and prepares a three part purchase order Copy 1 is sent to the supplier, Copy 2 is sent to the accounts pay-able department where it is filed temporarily, and Copy 3 is fied in the purchases department. A few days after the supplier ships the order, the goods arrive at the receiving They are inspected, and the receving clenk prepares a three part receiving report describing the number and quality of the itoms reca Copy 1 of the receiving report accompanies the goods to the stores, where they are secured. Copy 2 is sent to inventory control, where the FLO wchar key el cts-o posts ttote nventry records and files the document Copy 3 is sent to the accounts payable department, where it s filed with the purchase arder. A day or two later, the accounts payable 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 account. On the payment due date, the accounts payable clerk posts to the accounts payable subsidiary account to remove the liability and prepares a voucher authorizing payment to the vendor. The voucher is then sent to the cash disbursements 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. Manua physica Comp the writ Required: Prepare a system flowchart only of the expenditure cycle procedures previously described. Use the following flowchart headings: Inventory Control Purchasing Receiving Accounts Payable Cash Disbursements

Answer 1

• Step 1: 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.
• Step 2 & 3: Upon receipt of the requisition, the purchasing clerk selects a supplier from the valid vendor file (reference file) and prepares a three- part purchase order. Copy 1 is sent to the supplier, Copy 2 is sent to the accounts pay-able department where it is filed temporarily, and Copy 3 is filed in the purchases department.
• Step 4: A few days after the supplier ships the order, the goods arrive at the receiving department.
• Step 5: 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 stores, where they are secured. Copy 2 is sent to inventory control, where the clerk posts it to the inventory records 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 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 account. On the payment due date, the accounts payable clerk posts to the accounts payable subsidiary account to remove the liability and prepares a voucher authorizing payment to the vendor.
• Step 6: The voucher is then sent to the cash disbursements clerk.
• Step 7: 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.

Account Purchasing Department Step 2: Purchase Order Department Step 1: Inventory Need Inventory Control Step 3: Purchase Order Step 6: Voucher Step 5: Report of inspection Step 7: Check to Supplier Supplier Cash Disbursement Step 5: Report of inspection Step 4: Goods sent in few days Receiving Department