The general ledger function receives the ap account summary from cash disbursements. quizlet

Typical begin in inventory control (monitoring of inventory levels)
-should be monitoring over this process bc we don't want to order things we don't need or have stock-outs and miss out on sales

Purchase requisition = need to order
-usually done on a PER ITEM BASIS (important). If we need 8 items, we have 8 purchase requisitions

Purchase order (need to pick a vendor before)
-by vendor
-multicopy (ideally one copy that goes to receiving is referred to as a blind copy)

Blind copy of a purchase order = the quantity is left out so it forces the receiving ppl to not be lazy and count what is in the box and fill in the quantity themselves

Receiving = where physical supervision is needed (things are likely to go missing or if someone orders something they shouldn't they try and intercept it)

Receiving report - 1 copy must go to ________ and 1 copy must go to A/R? (bare minimum)

Receive invoice control verification (3 way match agrees to receiving, billing, ___)

Invoice will trigger recording of the liability (debit expense or asset, credit AP)
-tricky spot for auditor bc concerned about unrecorded liabilities

Recording in AP

When there is a separate AP and CD department, that is typically when you will see a voucher or voucher packet

AP does recording and monitors due dates, then send voucher to CD and says its time to send the check

Voucher packet = batch of bills to be paid that day

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Durham Company uses a job-order costing system. The following transactions took place last year: a. Raw materials requisitioned for use in production, $40,000 (80% direct and 20% indirect). b. Factory utility costs incurred,$14,600. c. Depreciation recorded on plant and equipment, 28.000.Three−four thsofthedepreciationrelatestofactoryequipment,an dtheremainderrelatestosellingandadministrativeequi pment.d.Costsforsalariesandwageswereincurredas follows:28.000. Three-fourths of the depreciation relates to factory equipment, and the remainder relates to selling and administrative equipment. d. Costs for salaries and wages were incurred as follows:

Direct labor$ 40.000Indirect labor$ 18.000Sales commissions$ 10.400Administrative salaries$ 25.000\begin{matrix} \text{Direct labor} & \text{\$ 40.000}\\ \text{Indirect labor} & \text{\$ 18.000}\\ \text{Sales commissions} & \text{\$ 10.400}\\ \text{Administrative salaries} & \text{\$ 25.000}\\ \end{matrix}

$e. Insurance costs incurred,$3,000 (80% relates to factory operations, and 20% relates to selling and administrative activities). f. miscellaneous selling and administrative expenses incurred, $18.000. g. Manufacturing overhead was applied to production. The company applies overhead on the basis of 150% of direct labor cost. h. Goods that cost$130.000 to manufacture according to their job cost sheets were transferred to the finished goods warehouse. i. Goods that had cost $120.000 to manufacture according to their job cost sheets were sold for$200.000. 1. Determine the underapplied or overapplied overhead for the year. 2. Prepare an income statement for the year.