Purchase Cycle

Figure 21.1 : Purchases Cycle

Received Purchase Requisition from

Purchase Requisition

Approved Suppliers Quotations

Clerk prepares a pre-numbered Purchases Order and obtains

PO

Purchase Requisition

4

PO 3

PO 2

1

Purchase order (PO)

N To Supplier

To Store

To Accounting Department

Figure 21.4 : Purchases Department

From Purchas es

Received goods and delivery note from

Approved Purchase Order

Delivery Note

Match documents

App PO 3 Delivery Note

Storekeeper checks the goods

Storekeeper prepares prenumbered receiving report and obtains approval from

App. SO 3 Receiving Rpt. 2 1 Receiving To Bin Card N To Accounts Department

Figure 21.5 : Stores-Receiving of Goods from Supplier

From Purchase Departm

From Stores

Received purchase invoice

2 Purchase Order

2 Delivery Note

Purchase Invoice

Match Docume

Clerk obtains approval from officer

Purchase Order Receiving Rpt. 2 Purchase Invoice

N

Figure 20.16 : Accounts Department

Purchase Invoice

Bookkeeper records in Purchase Journal

Bookkeeper records in Purchase Ledger

Purchase Journal

Purchase Ledger

N

Figure 21.7 : Journalising and Posting the Sales

N

Receive Remittance

Purchase Invoice

Remittance Advice

Match docume

Prepare and obtain approval of Payment Voucher

Purchase Invoice Remittance Adv. Payment Vouch. 3 Payment Vouch. 2 1 Payment Voucher

To Cashier

N

Figure 21.8 : Approving payment vouchers.

From Accounts Departm ent

Purchase Invoice

Remittance Adv. Payment Vouch. 3 Payment Vouch. 2 1 Payment Voucher

Prepare and obtain

Purchase Invoice Remittance Adv. Payment Vouch. 3 Payment Vouch. 2 Payment Vouch. 1 Cheque To Accounts Department

N

To Supplier

Figure 21.9 : Cashier-Approving Cheques

Payment Voucher

Bookkeeper records in Cash Book

Bookkeeper records in Purchase

Cash Book

Purchas e Ledger

N

Figure 21.10 : Accounts Department

Purchase Journal

Cash Book

Bookkeeper totals up the record entries (monthly)

Bookkeeper totals up the recorded entries (monthly)

Bookkeeper posts the total monthly sales to the Purchase

Bookkeeper posts the total monthly receipt to the Purchase

General Ledger

Figure 21.11 : Accounts Department

General Ledger

Purchase Ledger

Agree the Purchase Ledger Control A/c balance with total of Purchase Ledger

Bala nce agre

No

Bookkeeper prepares Creditors Reconciliation

Creditors Reconciliation Statement

Figure 21.12 : Accounts Department

General Ledger

Receive Statement of Account from

Statement of Account

Agree the Purchase Ledger Control A/c balance with

Balan ce agree

No

Bookkeeper prepares Creditors Reconciliation

Creditors Reconciliation

Figure 21.13 : Accounts Departments

Received Bank Statement

Bank Statements

Bookkeeper ticks off the items that are the same and pick out the unpresented cheques and un-

Cash Book

Bookkeeper prepares Bank Reconciliation Statement and obtains

Bank Reconciliation Statement

Figure 21.14 : Accounts Department