acc big notes
Receipt Confirmation Process
A report from the company confirms:
Items were received.
Items are undamaged.
Items were delivered on time.
Role of Accounting Department
The accounting department is responsible for:
Reporting the purchase.
Approving payment after confirming all documents are in order.
Verifying information across all documents (matching them up).
Matching Documents
Essential documents to check:
Purchase Requisition: Confirm it matches the Purchase Order.
Ensure the same type and number of units are requested.
Invoice: Verify correctness of the amount invoiced.
Common issues:
Being charged for items not purchased.
Being billed for unauthorized items.
This verification process is known as Invoice Approval or Check Authorization.
Payment Process
After verification:
The next step is to send payment (e.g., issuing a check).
Comparison to personal ordering process:
When ordering from places like Amazon, the process is quicker; you verify receipt after payment is made.
In business transactions, payment is made after receipt, often with negotiated terms (e.g., pay in 30 to 60 days).
Invoice and Payment Approval Checklist
Checklist of steps necessary for approving invoices:
Historically, these processes relied on paper forms but have transitioned to electronic systems.
Voucher System:
A voucher is completed once an invoice has been checked, approved, and recorded.
Specific information required:
Inside the voucher.
Outside the voucher.
Processing Documents:
Previously, documents were organized in physical expandable folders (e.g., purchase requisitions, purchase orders, receiving reports).
Modern practice involves electronic organization:
Documents can be sent electronically or processed through electronic systems.
Electronic Processing
Electronic improvements:
A typical voucher in a digital system includes folders storing related transaction information.
Examples of tasks in modern systems include:
Zapping documents electronically between departments.
Dragging and dropping images into the voucher.
Changing Textbooks and Methods
Discussion about updating textbooks to reflect modern practices:
Some textbooks remain outdated despite having newer editions.
Perpetual Inventory System:
Use of QR codes and bar codes for inventory management (example given related to concert entry systems).
Ability to print barcodes and utilize devices for scanning and managing inventory.
Importance of knowing inventory costs and pricing for profit calculations.
Account Management and Receivables
Importance of tracking bills.
Bad bookkeeping can lead to issues when collecting payments or track who owes money.
Aging of Receivables:
Utilize subsidiary ledgers to monitor receivables and who owes money.
Note Receivables Introduction
Principal and interest received upon maturity of notes (examined through an example):
Example Information:
Principal: $600
Interest Rate: 15%
Note term: 60 days.
Calculate interest using formula:
Total received: Principal + Interest = $600 + $25 = $625.
Handling Dishonored Notes
Definition: A dishonored note signifies that the payment has not been made.
Maker remains obligated to repay principal and interest.
Example of accounting treatment when a note is dishonored:
Accounts Receivable is created to track the debt owed after a note fails to get paid.
Importance of following up on payments and maintaining detailed records.
Common Practice Reflections
Discussion on practices used in accounting and finance processes:
Includes experiences with billing and payment processes.
Examples of real-world impacts of good and poor bookkeeping practices.