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C H A P TER 5 The Expenditure Cycle Part I: Purchases and Cash Disbursements Procedures 241

4. Vendor mailing information is retrieved from the valid vendor file.
5. Purchase orders are prepared and added to the open PO file.
6. A transaction listing of POs is sent to the purchasing department for review.
Receiving Department
When the goods arrive, the receiving clerk accesses the open PO file in real time by entering the PO num-
ber taken from the packing slip. The receiving screen, illustrated in Figure 5-18, then prompts the clerk to
enter the quantities received for each item on the PO.

Data Processing
The following tasks are performed automatically by the system.

1. Quantities of items received are matched against the open PO record, and a Y value is placed in a
logical field to indicate the receipt of inventories.
2. A record is added to the receiving report file.
3. The inventory subsidiary records are updated to reflect the receipt of the inventory items.
4. The general ledger inventory control account is updated.
5. The record is removed from the open PO file and added to the open AP file, and a due date for pay-
ment is established.
Each day, the DUE DATE fields of the AP records are scanned for items due to be paid. The following
procedures are performed for the selected items.

1. Checks are automatically printed, signed, and distributed to the mail room for mailing to vendors.
EDI vendors receive payment by electronic funds transfer (EFT). EFT is discussed in the appendix to
Chapter 12.
2. The payments are recorded in the check register file.
3. Items paid are transferred from the open AP file to the closed AP file.
4. The general ledger AP and cash accounts are updated.
5. Reports detailing these transactions are transmitted via terminal to the AP and cash disbursements
departments for management review and filing.
Because the financial information about purchases is known in advance from the trading partner agree-
ment, the vendor’s invoice provides no critical information that cannot be derived from the receiving

FI G U R E
5-18 RECEIVING SCREEN

DATE: 12/15/09 PURCH. ORDER # 567 CLERK ID MD

ITEM # QTY RECVD QTY ORDER Discrepancy

Displays after Qty Recvd
has been entered
45-709 50 55 5

MANUAL ENTRY =