The Voucher System

1. The Voucher System Chapter 24

2. 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.

3. Characteristics of a Voucher System • All vouchers are supported by documents and records. • Cross-referencing and cross-checking is part of the voucher system. • Transactions are traced throughout the system.

4. Preparing vouchers, recording them in a voucher register, and recording payment of vouchers in a check register. Learning Objective 1

5. Learning Unit 24-1 • What are the elements of voucher system? • Vouchers • Voucher register • Unpaid voucherfile • Check register • Paid voucher file

6. Learning Unit 24-1 Jones Supply Co. Purchase Order# 0732 Date: November 3, 20x8 Ordered from Beam Co. Date Needed Ship via F.O.B. Terms Nov. 28, 20x8 Rail Destination 2/10, n/30 Quantity Unit OrderedReceived Description Price Amount 100 V3421 Staplers $ 5.00 $ 500 200 V3918 Calculators 20.00 4,000 Total $4,500

7. Learning Unit 24-1 Beam Co. (Salesman, Munroe) Invoice Number:B20 Sold to: Jones Supply Co. Date: November 3, 20x8 Your Purchase Shipped via: F.O.B. Terms Order #: 0732 Rail Destination 2/10, n/30 Quantity Unit OrderedReceived Description Price Amount 100 V3421 Staplers $ 5.00 $ 500 200 V3918 Calculators 20.00 4,000 Total $4,500

8. Learning Unit 24-1 Jones Supply Co. Voucher No. 23 Invoice Number: B20 Check needed: Dec. 5, 20x8 November 28, 20x8 Payable to: Beam Co. Purchase Order #: 0732 Invoice amount $4,500 Less discount 10 Net Amount Due $4,410 Verification Steps: Date (1) Invoice compared with purchase order 12/1/x8 (2) Invoice compared with receiving report 12/1/x8 (3) Extension and footing done 12/1/x8 (4) Approved for payment 12/3/x8

9. Learning Unit 24-1 • All vouchers are pre-numbered. • 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.

10. Learning Unit 24-1 • 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.

11. Learning Unit 24-1 • 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.

12. Learning Unit 24-1 • 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.

13. Learning Unit 24-1 • 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.

14. Recording revised vouchers to handle nonroutine transactions in a voucher system. Learning Objective 2

15. Learning Unit 24-2 • How do some companies record the following additional transactions? • Purchase returns and allowances after the voucher has been recorded. • Partial payment plans that adjust the voucher prepared for full payment. • Cancel the old voucher and prepare a new one with the correct amount.

16. Using the net amount method to record invoices and payment. Learning Objective 3

17. Learning Unit 24-2 • 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.

18. Learning Unit 24-2 • Mill Company buys merchandise on account for $8,000, 2/10, n/30. Gross method Purchases 8,000 Vouchers Payable 8,000 Net method Purchases 7,840 Vouchers Payable 7,840

19. Learning Unit 24-2 • What if the discount is taken on time? Gross method Vouchers Payable 8,000 Purchases Discount 160 Cash 7,840 Net method Vouchers Payable 7,840 Cash 7,840

20. Learning Unit 24-2 • What if the discount is missed? Gross method Vouchers Payable 8,000 Cash 8,000 Net method Vouchers Payable 7,840 Discount Lost 160 Cash 8,000

21. End of Chapter 24