Question 11.3: Assume that a company needs 1000 packs of paper for their pr...
Assume that a company needs 1000 packs of paper for their printers. The firm issues a purchase order to the supplier at 6 € per pack, for delivery in 7 days. One copy of the purchase order is sent to the supplier, one copy goes to the person requisitioning the cartridges, one copy goes to the receiving department, one copy goes to accounts payable, and one copy is retained by the person preparing the purchase order. When the firm receives the paper, a receiving report is prepared.
The three-way match involves comparing the following information:
• The description, quantity, cost, and terms on the company’s purchase order.
• The description and quantity of goods shown on the receiving report.
• The description, quantity, cost, terms, and math on the vendor invoice.
After the match has been verified, it is possible to enter the invoice into the liability account accounts payable. The information entered into the accounting software will include invoice reference information, the amount to be credited to accounts payable, the amounts and accounts to be debited, and the date that the payment is to be made.