BUS 426 Chapter Notes - Chapter 18: Accounts Payable, Computer File, Trial Balance

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Published on 19 Sep 2012
School
Simon Fraser University
Department
Business Administration
Course
BUS 426
Chapter 18 - Audit of the Acquisition and Payment Cycle
The Nature of the Acquisition and Payment Cycle
Acquisition and Payment Cycle: The transaction cycle that includes
the acquisition of and payment for goods and services outside the
organization
Processing Purchase Orders
Purchase Requisition: A written request for goods and services
by an authorized employee
Purchase Order: A document prepared by the purchasing
department indicating the description, quantity, and related
information for goods and services that the company intends to
purchase
Vendor Master File: Sums acquisitions, cash disbursements and
acquisition returns and allowances for each vendor
Purchase Order Transaction File
Internal Controls
Receiving Goods and Services
Receiving Report: A document prepared by the receiving
department at the time tangible goods are received, indicating the
description of the goods, the quantity received, the date received
and other relevant data; part of the documentation necessary for
payment to be made
Internal Controls
Recognizing the Liability
Acquisitions Journal, lists the acquisition transactions
Summary Acquisitions Report
Vendor’s Invoice: A document that specifies the details of an
acquisition transaction and amount of money owed to the vendor
for an acquisition
Debit Memo: A document indicating a reduction in the amount
owed to a vendor because of returned goods or an allowance
granted
Vendor Transaction File
Voucher
Vendor Master File: A computer file for maintaining a record for
each vendor of individual acquisitions, cash disbursements, and
acquisition returns and allowances, and vendor balances
Accounts Payable Trial Balance: A listing by each vendor of the
amount owed at a point in time, prepared directly from the
accounts payable master file
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Document Summary

The nature of the acquisition and payment cycle. Acquisition and payment cycle: the transaction cycle that includes the acquisition of and payment for goods and services outside the organization. Purchase requisition: a written request for goods and services by an authorized employee. Purchase order: a document prepared by the purchasing department indicating the description, quantity, and related information for goods and services that the company intends to purchase. Vendor master file: sums acquisitions, cash disbursements and acquisition returns and allowances for each vendor. Vendor"s invoice: a document that specifies the details of an acquisition transaction and amount of money owed to the vendor for an acquisition. Debit memo: a document indicating a reduction in the amount owed to a vendor because of returned goods or an allowance granted. Vendor master file: a computer file for maintaining a record for each vendor of individual acquisitions, cash disbursements, and acquisition returns and allowances, and vendor balances.

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