1. GLENCOE / McGraw-Hill

2. Internal Control and the Voucher System

3. 3.Prepare vouchers. 4.Record vouchers in a voucher register. 5.Record payment of approved vouchers. 6.Record transactions that require special treatment in a voucher system. Using the Voucher System Section Objectives

4. Steps in the Voucher System 1.Verify receipt of merchandise. 2.Verify prices. 3.Verify computations. 4.Prepare and approve voucher. 5.Record and file the unpaid voucher according to due date. 6.Pay the voucher. 7.File the paid voucher. Page 953

5. What is a voucher register? QUESTION: A voucher register is a journal used to record liabilities arising from business transactions. ANSWER: Page 955

6. A voucher register is a customized journal providing for accounts used frequently. Each voucher entered is a credit to Accounts Payable. All entries in the Other Accounts section are posted individually. Page 955

7. VOUCHER REGISTER PAID ACCTS. FREIGHT VOU. CK. PAYABLE PURCH. IN DATE NO. PAYABLE TO DATE NO. CREDIT DEBIT DEBIT Mar. 1 3-04 Gulf Shores Clothiers 3/10 304 782.10 782.10 10 3-10 Southern Express 3/12 305 65.00 65.00 10 3-11 Cotton Inc. 3/19 311 4,675.00 4,675.00 10 3-12 Eastern Truckers 3/13 306 75.00 75.00 Page 956 Voucher Register with Purchases and Freight-In Columns

8. VOUCHER REGISTER PAID ACCTS. SOC. SEC. MEDICARE EMP. INC. VOU. CK. PAYABLE TAX PAY. TAX PAY. TAX. PAY. DATE NO. PAYABLE TO DATE NO. CREDIT CREDIT CREDIT CREDIT Mar. 12 3-14 Nadia Khan 3/15 307 576.45 43.40 10.15 70.00 15 3-15 Beth Spencer 3/15 308 658.80 49.60 11.60 80.00 15 3-16 Robert Ramirez 3/15 309 648.80 49.60 11.60 90.00 Page 956 Voucher Register with Payroll Transactions

9. Issuing Checks for Vouchers Record entry in the check register, debiting Accounts Payable and crediting Cash. Make notation in the voucher register showing date paid and check number. In a voucher system, the check register replaces the cash payments journal. Page 956

10. Page 958 Check Register CHECK REGISTER ACCOUNTS PURCHASES CK. VOU. PAYABLE DISCOUNTS CASH DATENO. PAYABLE TO NO. DEBIT CREDIT CREDIT 20-- Mar. 1301 Business Rentals 3-01 1,000.00 1,000.00 1302 Beth Spencer 3-02 100.00 100.00 1303 Nadia Khan 3-03 125.00 125.00 10304 Gulf Shores Clothiers 3-04 782.10 15.64 766.46 29315 Mike Youngblood 3-27 1,000.00 1,000.00 29316 Sumay Chen 3-28 950.00 950.00 30317 Nadia Khan 3-29 65.00 65.00 18,105.20 123.45 17,981.75

11. Schedule of Vouchers Payable At the end of the month, a list of all unpaid vouchers is prepared. Compare the list to the entries in the voucher register. Ensure that the total of the schedule equals the balance of Accounts Payable. Page 958

12. Page 958 Schedule of Vouchers Payable Voucher Number Payable to Amount 2-29 Cotton Inc.$3,000.00 3-05 Southern Paper Company 225.00 3-06 P&S Office Products 75.00 3-07 Henry Villas, Attorney 500.00 3-08 PHB, CPAs 250.00 3-13 Little Insurance Company 500.00 3-17 Paper Box Company 195.00 3-18 Eastside Utilities 35.00 3-19 Southern Gas 155.00 3-20 Gulf Shores Clothiers 3,300.00 3-21 Public Telephone Company 125.00 3-22 Truth Publishing Company 450.00 3-23 On-Time Delivery 179.00 Total $8,989.00 CLOTHING CORPORATION Schedule of Vouchers Payable March 31, 20--

13. Partial payments Notes payable Purchases returns and allowances Purchases discounts lost Transactions Requiring Special Treatment Page 959

14. 1.Cancel the original voucher. 2.Issue new vouchers for partial payments. Partial Payment of Previously Recorded Voucher Page 960

15. If a business issues a note payable for an unpaid invoice, debit Accounts Payable and credit Notes Payable—Trade. In the voucher register, enter the date of the note and enter the words “By note” in the Check Number column. Payment of Notes Payable Page 960

16. Method 1: Issue a new voucher and cancel the original voucher. Method 2: Make a notation for the allowance. Recording Purchases Returns and Allowances Page 961

17. 1.Record purchase invoices in the voucher register net of discount. 2.If an invoice is paid after the discount period, the difference is recorded in the check register by debiting Discounts Lost. Recording Cash Discounts Lost Page 961

18. REVIEWREVIEW A ______________ is a journal used to record liabilities arising from business transactions. Because vouchers are used to record business liabilities, most vouchers are credited to ________________. In a voucher system, the check register replaces the _____________ journal. cash payments Accounts Payable voucher register Complete the following sentences:

19. REVIEWREVIEW Unpaid vouchers should be filed according to ________. The balance of ________________ should equal the total of the schedule of vouchers payable. Record purchase invoices _____________ to identify “lost” discounts. net of discount Accounts Payable due date Complete the following sentences:

20. Thank You for using College Accounting, Tenth Edition Price Haddock Brock