The Voucher System

Chapter 23

2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater

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Purchasing Goods
Payment Verifying Numbers Receiving Goods Purchase Invoice Purchase Order

Purchase Requisition

2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater

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

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

Learning Objective 1

Preparing vouchers, recording them in a voucher register, and recording payment of vouchers in a check register.

2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater

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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
2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater 23 - 6

Learning Unit 23-1 (Handling Transactions)

Jones Supply Co. Ordered from: Beam Enterprise Date Needed: November 28, 20x8 Ship via: Rail Purchase Order: 0732 Date: November 3, 20x8 Ship to: [Same as Above] F.O.B. Terms Destination 2/10, n/30 Unit Price $ 5.00 20.00 Amount $ 500 4,000 $4,500

Quantity Ordered Received Description 100 V1342 Staplers 200 V3918 Calculators Total By: Original Purchase Order

Bill Small Authorized Signature

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2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater

Learning Unit 23-1 (Handling Transactions)

Beam Enterprise Sold to: Jones Supply Co. Your Purchase Order Inv. No. Salesman Number: 0732 B20 Munroe Quantity Ordered Received Description 100 100 V1342 Staplers 200 200 V3918 Calculators Total Original Invoice
2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater 23 - 8

Invoice Number: B20 Date: Nov. 28, 20x8 Ship to: [Same] Terms 2/10, n/30 Unit Price $ 5.00 20.00 Shipped via Rail Amount $ 500 4,000 $4,500

Learning Unit 23-1 (Handling Transactions)

Jones Supply Co. Invoice Number and Date: B20 November 28, 20x8 Purchase Order Number: 0732 Voucher No. 23 Date check needed: December 5, 20x8 Payable to: Beam Enterprise Invoice Amount $4,500 Less: Discount 90 Net Amount Due $4,410 Approved by: JS BM BJ PS Date 12/1/x8 12/1/x8 12/1/x8 12/3/x8
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Verification Steps: (1) Invoice compared with purchase requisition and purchase order (2) Invoice compared with receiving report (3) Extensions and footings done (4) Approved for payment

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.
2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater 23 - 10

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.
2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater 23 - 11

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.

2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater

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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.
2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater 23 - 13

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.
2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater 23 - 14

Learning Objective 2

Recording revised vouchers to handle nonroutine transactions in a voucher system.

2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater

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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

2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater

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Learning Objective 3

Using the net amount method to record invoices and payment.

2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater

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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.
2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater 23 - 18

Learning Unit 23-2 (Recording Additional Transactions)

Mill Company buys merchandise on account for $8,000, 2/10, n/30.

Gross method: Purchases Vouchers Payable

Net method: Purchases Vouchers Payable

8,000 8,000

7,840 7,840
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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 Purchases Discount Cash Net method: Vouchers Payable Cash

8,000
160 7,840

7,840 7,840
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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 Cash Net method: Vouchers Payable Discount Lost Cash

8,000
8,000

7,840 160 8,000

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2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater

End of Chapter 23

2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater

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