The Voucher System Chapter 24

Characteristics of a Voucher System Separation of duties is built into a voucher system. Authorization of transactions is separated from recording and execution of these activities. No purchases are made without an approved voucher.

Characteristics of a Voucher System All vouchers are supported by documents and records. Cross-referencing and cross-checking is part of the voucher system. Transactions are traced throughout the system.

Preparing vouchers, recording them in a voucher register, Learning Objective 1 Preparing vouchers, recording them in a voucher register, and recording payment of vouchers in a check register. 4

Learning Unit 24-1 What are the elements of voucher system? Vouchers Voucher register Unpaid voucher file Check register Paid voucher file

Learning Unit 24-1 Jones Supply Co. Purchase Order# 0732 Date: November 3, 20x8 Ordered from Beam Co. Date Needed Ship via F.O.B. Terms Nov. 28, 20x8 Rail Destination 2/10, n/30 Quantity Unit Ordered Received Description Price Amount 100 V3421 Staplers $ 5.00 $ 500 200 V3918 Calculators 20.00 4,000 Total $4,500

Learning Unit 24-1 Beam Co. (Salesman, Munroe) Invoice Number: B20 Sold to: Jones Supply Co. Date: November 3, 20x8 Your Purchase Shipped via: F.O.B. Terms Order #: 0732 Rail Destination 2/10, n/30 Quantity Unit Ordered Received Description Price Amount 100 V3421 Staplers $ 5.00 $ 500 200 V3918 Calculators 20.00 4,000 Total $4,500

Learning Unit 24-1 Jones Supply Co. Voucher No. 23 Invoice Number: B20 Check needed: Dec. 5, 20x8 November 28, 20x8 Payable to: Beam Co. Purchase Order #: 0732 Invoice amount $4,500 Less discount 10 Net Amount Due $4,410 Verification Steps: Date (1) Invoice compared with purchase order 12/1/x8 (2) Invoice compared with receiving report 12/1/x8 (3) Extension and footing done 12/1/x8 (4) Approved for payment 12/3/x8

Learning Unit 24-1 All vouchers are pre-numbered. Any voided vouchers must be kept on file. The invoice for a transaction is compared to the related purchase order, receiving report, and other supporting documentation. The voucher is prepared when all information is cross-referenced.

Learning Unit 24-1 The voucher register is a special journal that replaces the purchases journal. A voucher is entered into the register on the date the related liability is incurred. A check number is entered on the date of payment.

Learning Unit 24-1 Column totals for Vouchers Payable, Purchases, Supplies, etc. are posted at the end of the month. Individual amounts are posted to the subsidiary ledgers daily.

Learning Unit 24-1 Each voucher is recorded in the voucher register at the time a liability is incurred. It is then placed into a file in the order of the due date. Filing by due date is important in order to avoid any late payments. The voucher remains in this file until it is paid.

Learning Unit 24-1 The check register replaces the cash payments journal. The check register for a voucher system has many columns. The columns in this special register have account and number headings linked to the voucher register. The paid vouchers are filed in sequential order of voucher numbers.

Recording revised vouchers to handle nonroutine transactions Learning Objective 2 Recording revised vouchers to handle nonroutine transactions in a voucher system. 4

Learning Unit 24-2 How do some companies record the following additional transactions? Purchase returns and allowances after the voucher has been recorded. Partial payment plans that adjust the voucher prepared for full payment. Cancel the old voucher and prepare a new one with the correct amount.

Using the net amount method to record invoices and payment. Learning Objective 3 Using the net amount method to record invoices and payment. 4

Learning Unit 24-2 How do some companies record purchases at net amount? Vouchers are recorded at net amount. The applicable discount is subtracted first. A Purchases Discount Lost account is used to record missed discounts related to late payments.

Learning Unit 24-2 Mill Company buys merchandise on account for $8,000, 2/10, n/30. Gross method Purchases 8,000 Vouchers Payable 8,000 Net method Purchases 7,840 Vouchers Payable 7,840

Learning Unit 24-2 What if the discount is taken on time? Gross method Vouchers Payable 8,000 Purchases Discount 160 Cash 7,840 Net method Vouchers Payable 7,840 Cash 7,840

Learning Unit 24-2 What if the discount is missed? Gross method Vouchers Payable 8,000 Cash 8,000 Net method Vouchers Payable 7,840 Discount Lost 160 Cash 8,000

End of Chapter 24