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13 Cards in this Set

  • Front
  • Back
expenditure cycle
deals with the purchase of goods and services and paying for them, divided into purchases and cash payments
functions of the expenditure cycle
focuses on obtaining resources at a reasonable cost and paying the money owed to the vendors
expenditure cycle-departments
controller's (GL, a/p, cost acctg), logistics (purchase, warehouse, ship, receive), treasurer's (cash disbursements),
expenditure cycle-basic steps
determine when a product is needed, acquire the product, receive the goods and inspect, return or obtain purchase allowance if necessary, validate order, pay vendor cash
expenditure cycle-basic journal entries
record purchases, pay vendor (in or out of discount period), record return of goods
gross method
purchases are recorded at full amount
net method
purchases recorded at full amount less cash discount
inventory subledger
subsidiary ledger that details the specific goods that comprise the inventory account
expenditure cycle-control objectives
safeguard inventories and cash, authorize all purcahse transactions, record transactions accurately, safeguard records
credit purchases-documents
purchase requisition, purchase order, vendor invoice, vendor packing list, receiving report, journal voucher
purchase voucher/voucher packet
purchase requistion, purchase order, receiving report, vendor invoice
purchase returns-documents
debit memo-document indicating that the firm's account should be reduced because of a purchase r&a
cash disbursements-documents
purchase requisition, purchase order, receiving report, vendor invoice (purchase voucher package)