10e Appendix 11 - ROMNMC11_0131475916.QXD 2/7/05 2:48 PM...

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Order Goods (Purchasing) 449 Appendix AOE’s Legacy Expenditure Cycle System AOE’s legacy expenditure cycle system was characterized by distinct subsystems to support each of the three basic expenditure cycle activities. Order Goods (Purchasing) As shown in Figure 11A-1, the receipt of a purchase requisition triggers the process of ordering goods and supplies. Approved purchase requisitions arrive daily from inventory control and various user departments. The purchasing agent uses an online Purchase requisition Purchase order (signed) 1 2 3 4 5 Purchasing Computer Operations Purchase requisition Purchase requisition User departments and inventory stores Review and sign N Open P.O. N Enter purchase data By purchasing manager At end of day Inventory master Open purchase orders Purchase orders (temporary) Vendor master Create purchase orders file Print purchase orders Accounts payable (Fig. 11A-3) Receiving (Fig. 11A-2) Requisitioner Vendor Purchase order 1 2 3 4 5 Figure 11A-1 Flowchart of the purchasing system
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450 Chapter 11: The Expenditure Cycle terminal to enter the requisition data and create a purchase order. After the item num- ber is entered, the system searches the inventory master file to identify the preferred vendor for that item. The system proceeds to create a purchase order record by retriev- ing data from the inventory and vendor master files and prompting the purchase agent to enter the remaining data such as quantity needed and desired delivery date. Then the purchase requisition is filed temporarily in numerical order. The system stores the completed purchase order record in a temporary disk file. At the end of the day, all items to be ordered from the same vendor are consolidated into a single purchase order record. Each of these records is assigned a purchase order number and added to the open purchase order file, and five copies of the purchase order are printed. The five copies of the purchase order are sent to the purchasing manager for review and approval. After the purchase orders have been signed, the original is sent to the vendor. Copy 2 goes to the receiving department to inform them of anticipated deliveries. Copy 3 goes to accounts payable to notify them of a pending financial commitment. Copy 4 of the purchase order goes to the department that generated the purchase requisition to let it know that its request has been approved. Finally, copy 5 is retained in purchasing, where it is attached to the purchase req- uisition and filed numerically, by purchase order number, in the open purchase order file. Receive and Store Goods Figure 11A-2 (see next page) shows that the receiving department files the copy of the purchase order sent from the purchasing department alphabetically by vendor. When a delivery arrives, a receiving clerk verifies that the goods were ordered by comparing the purchase order number referenced on the vendor’s packing slip with the copy of the purchase order sent earlier by the purchasing department. The receiving clerk then
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This note was uploaded on 10/26/2010 for the course ACCTG 322 taught by Professor Gill during the Spring '08 term at San Diego State.

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10e Appendix 11 - ROMNMC11_0131475916.QXD 2/7/05 2:48 PM...

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