2. 23 - 1 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater The Voucher System Chapter 23

3. 23 - 2 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Payment Purchasing Goods Verifying Numbers Receiving Goods Purchase Invoice Purchase Order PurchaseRequisition

4. 23 - 3 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater 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.

5. 23 - 4 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Characteristics of a Voucher System All vouchers are supported by documents and records. Cross-referencing and cross-checking are part of the voucher system. Transactions are traced throughout the system.

6. 23 - 5 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Preparing vouchers, recording them in a voucher register, and recording payment of vouchers in a check register. Learning Objective 1

7. 23 - 6 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Learning Unit 23-1 (Handling Transactions) What are the elements of a voucher system? Vouchers Voucher register Unpaid voucher file Check register Paid voucher file

8. 23 - 7 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Learning Unit 23-1 (Handling Transactions) Jones Supply Co.Purchase Order: 0732 Date: November 3, 20x8 Ordered from:Ship to: Beam Enterprise[Same as Above] Date Needed: November 28, 20x8 Quantity Quantity Ordered Received Ordered Received100200 Ship via: Rail Description Description V1342 Staplers V3918 Calculators Total Unit Unit Price Price $ 5.00 $ 5.00 20.00 20.00 Amount Amount $ 500 $ 500 4,000 4,000 $4,500 $4,500 F.O.B.DestinationTerms 2/10, n/30 By: Bill Small Original Purchase Order Authorized Signature

9. 23 - 8 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Learning Unit 23-1 (Handling Transactions) Beam EnterpriseInvoice Number: B20 Date: Nov. 28, 20x8 Sold to: Jones Supply Co.Ship to: [Same] Your Purchase Order Number: 0732 Quantity Quantity Ordered Received Ordered Received 100 100 200 200 Inv. No. B20 Description Description V1342 Staplers V3918 Calculators Total Unit Unit Price Price $ 5.00 $ 5.00 20.00 20.00 Amount Amount $ 500 $ 500 4,000 4,000 $4,500 $4,500 Terms 2/10, n/30 Shipped via Rail Original Invoice SalesmanMunroe

10. 23 - 9 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Learning Unit 23-1 (Handling Transactions) Jones Supply Co.Voucher No. 23 InvoiceDate check needed: Number and Date:December 5, 20x8 B20 November 28, 20x8Payable to: Beam Enterprise Invoice Amount$4,500 Invoice Amount$4,500 PurchaseLess: Discount 90 Order Number: 0732Net Amount Due$4,410 Verification Steps:Approved by: Date (1)Invoice compared with purchase requisition and purchase orderJS12/1/x8 (2)Invoice compared with receiving reportBM12/1/x8 (3)Extensions and footings doneBJ12/1/x8 (4)Approved for paymentPS12/3/x8

11. 23 - 10 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Learning Unit 23-1 (Handling Transactions) All vouchers are prenumbered. 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.

12. 23 - 11 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Learning Unit 23-1 (Handling Transactions) 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.

13. 23 - 12 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Learning Unit 23-1 (Handling Transactions) 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.

14. 23 - 13 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Learning Unit 23-1 (Handling Transactions) 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.

15. 23 - 14 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Learning Unit 23-1 (Handling Transactions) 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.

16. 23 - 15 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Recording revised vouchers to handle nonroutine transactions in a voucher system. Learning Objective 2

17. 23 - 16 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Learning Unit 23-2 (Recording Additional Transactions) Situation 1: Purchases returns and allowances after voucher has been recorded Situation 2: Partial payments planned after voucher prepared for full amount

18. 23 - 17 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Using the net amount method to record invoices and payment. Learning Objective 3

19. 23 - 18 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Learning Unit 23-2 (Recording Additional Transactions) 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.

20. 23 - 19 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Learning Unit 23-2 (Recording Additional Transactions) Mill Company buys merchandise on account for $8,000, 2/10, n/30. Gross method: Purchases 8,000 Vouchers Payable8,000 Net method: Purchases 7,840 Vouchers Payable7,840

21. 23 - 20 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Learning Unit 23-2 (Recording Additional Transactions) What if the discount is taken on time? Gross method: Vouchers Payable 8,000 Purchases Discount 160 Cash7,840 Net method: Vouchers Payable 7,840 Cash7,840

22. 23 - 21 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater Learning Unit 23-2 (Recording Additional Transactions) What if the discount is missed? Gross method: Vouchers Payable 8,000 Cash8,000 Net method: Vouchers Payable 7,840 Discount Lost 160 Cash8,000

23. 23 - 22 © 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater End of Chapter 23