Page 262 - Accounting Information Systems

C H A P TER 5 The Expenditure Cycle Part I: Purchases and Cash Disbursements Procedures 233

FI G U R E
5-13 CASH DISBURSEMENTS SYSTEM

Accounts Payable Cash Disbursements General Ledger

Open
Voucher PO
File RR
Invoice Prepare
Search Open Checks
Voucher File for Purchase Cash Disb.
Items Due Order Voucher Check
Receiving Register A Summary Journal
Report Voucher
Journal
Invoice 3 Voucher
2
Cash Disb. 1 Post to GL
from Journal
Voucher Check
Voucher and
Reconcile GL
to Summary
PO
PO RR Summary General
RR Invoice Ledger
Invoice Journal
Cash Disb.
Cash Disb. Voucher Voucher
Voucher
Sign
Checks
Close File
Voucher Voucher PO Check
Register and File RR (Copy)
Invoice
Summary PO Cash Disb.
RR Voucher
Invoice Check File
CD (Copy) Check
A Voucher
Check
(Copy)
Supplier
Closed
Voucher
File
General Ledger Department
Based on the journal voucher from cash disbursements and the account summary from AP, the general
ledger clerk posts to the general ledger control accounts and files the documents. This concludes the cash
disbursements procedures.

Concluding Remarks
We conclude our discussion of manual systems with two points of observation. First, notice how manual
expenditure cycle systems generate a great deal of paper documentation. Buying, preparing, transporting,
and filing physical documents add considerably to the cost of system operation. As we shall see in the
next section, their elimination or reduction is a primary objective of computer-based systems design.
Second, for purposes of internal control, many functions such as the inventory control, purchasing,
AP, cash disbursements, and the general ledger are located in physically separate departments. These
labor-intensive activities also add greatly to the cost of system operation. In computer-based systems,
computer programs perform these clerical tasks, which is much cheaper and far less prone to error.
Although the classic department structure may still exist in computer-based environments, personnel
responsibilities are refocused. Rather than being involved in day-to-day transaction processing, these
departments are now involved with financial analysis and exception-based problem solving. As a result,
these departments are smaller and more efficient than their manual system counterpart.