Page 268 - Accounting Information Systems

C H A P TER 5 The Expenditure Cycle Part I: Purchases and Cash Disbursements Procedures 239

Data Processing Department: Step 2
As explained in Figure 5-14, a copy of the PO is sent to data processing and used to create a record in the
open PO file. The associated requisitions are then transferred from the open purchase requisition file to
the closed purchase requisition file.

Receiving Department
When the goods arrive from vendors, the receiving clerk prepares a receiving report and sends copies to
the stores (with the goods), purchasing, AP, and data processing.

Data Processing Department: Step 3
The data processing department creates the receiving report file from data provided by the receiving
report documents. Then a batch program updates the inventory subsidiary file from the receiving report
file. The program removes the ‘‘On Order’’ flag from the updated inventory records and calculates batch
totals of inventory receipts, which will later be used in the general ledger update procedure. Finally, the
associated records in the open PO file are transferred to the closed PO file.

Accounts Payable
When the AP clerk receives the supplier’s invoice, he or she reconciles it with the supporting documents
that were previously placed in the AP pending file. The clerk then prepares a voucher, files it in the open
voucher file, and sends a copy of the voucher to data processing.

Data Processing Department: Step 4
The voucher file is created from the voucher documents. A batch program validates the voucher records
against the valid vendor file and adds them to the voucher register (open AP subsidiary file). Finally,
batch totals are prepared for subsequent posting to the AP control account in the general ledger.

CASH DISBURSEMENTS PROCEDURES
Data Processing Department
Each day, the system scans the DUE DATE field of the voucher register (see Figure 5-15) for items due.
Checks are printed for these items, and each check is recorded in the check register (cash disbursements
journal). The check number is recorded in the voucher register to close the voucher and transfer the items
to the closed AP file. The checks, along with a transaction listing, are sent to the cash disbursements
department. Finally, batch totals of closed AP and cash disbursements are prepared for the general ledger
update procedure.
At the end of the day, batch totals of open (unpaid) and closed (paid) AP, inventory increases, and
cash disbursements are posted to the AP control, inventory control, and cash accounts in the general
ledger. The totals of closed AP and cash disbursements should balance.
Cash Disbursements Department
The cash disbursements clerk reconciles the checks with the transaction listing and submits the negotiable
portion of the checks to management for signing. The checks are then mailed to the suppliers. One copy
of each check is sent to AP, and the other copy is filed in cash disbursements, along with the transaction
listing.

Accounts Payable Department
Upon receipt of the check copies, the AP clerk matches them with open vouchers and transfers these now
closed items to the closed voucher file. This concludes the expenditure cycle process.