Part II (a) Seven (7) generated documents that would be required to satisfy the minimum requirements of a basic system and the number of copies of each document that would be needed: Generated documents | Number of copies needed | 1) Purchase order- the first document issued by buyer to supplier which indicates types, quantities, and agreed prices for products or services. | 4 copies needed, each copy will be sent to the department, receiving department, accounts payable department, and supplier. | 2) Invoice- a document issued by supplier to buyer. It relates to a sale transaction and indicates the products, quantities and agreed price provided by the supplier. | Company makes a duplicate copy of invoice to be recorded in the ledger. | 3) Purchase requisition- Document generated by a user department or storeroom-personnel to notify the purchasing department of items it needs to order, their quantity, and the timeframe. | One copy is generated and sent to the purchasing department to create the purchase order. | 4) Receiving report- an internal document used to record what materials and inventory were received by the company. | When the report is filled out, one sheet can be sent to accounting for recording, one sheet is sent to purchasing to verify the order was purchased and received, and one sheet is sent to the department that requested the order. The receiving department also keeps a copy of each receiving report on file. | 5) Voucher- a pre-numbered form made by account payable department. | Account payables prepare three copies of voucher after received supplier’s invoice and matched with purchase order. | 6) Debit memo- informal invoice issued by supplier to a customer showing that there is an additional amount owed due to previous error. | One copy needed to be hand out to the customer for the errors made. | 7) Packing slip- a document listing the items in a shipment. | Two copies is needed for the vendors, one copy is for the order and the rest for the records of items that had been shipped. |

b) Explain how all these documents should interrelate and flow among the various departments, including the final destination or file for each copy:

Expenditure cycle is a recurring set of business activities and related information processing operations associated with the purchase of and payment for goods and services. This flowchart illustrates the flow of process starting from purchasing goods or services until to cash disbursement.
For procurement process, the preparation of purchase requisition is important to inform the purchasing department of items it needs to order, quantity, and the time frame, which generated by an internal organization. The request sent to the purchasing department to acquire goods or services. It is created and authorized by the department requiring the goods or services.
Next, the company will make an order of goods or services from their supplier. They will issue a purchase order to supplier which formally requests the supplier to sell and deliver specified products at designated prices. The purchase order includes the names of supplier and purchasing agent, and the order and requested delivery dates, location and information about the items ordered. Four copies is prepared and will be issued to the supplier for order, account payable department, receiving department and also to be kept in file.
After the supplier received the purchase order, in return they will issue invoice to buyer stating the details about materials needed with agreed price provided by the supplier. Then, the invoice received will be sent to the account payable department to be matched with the required documents and to be record in the ledger.
Once the invoice is received from supplier, account payable department will match the invoice with all documents required which are purchase requisition, purchase order, and receiving report. As all these documents are approved, the department will prepare three copies of voucher as a proof of the purchase.
Receiving report is created to record amount of goods or raw material received when delivery had been accepted. Then, the receiving department will prepare four copies of receiving reports and distributes each copy to account payable, purchasing to verify the order was purchased and received, as well as head department that requested the order. The receiving department also keeps a copy of each receiving report on file.
When shipment arrives, the inventory supervisor will check off on the packing slip that accompanies the shipment. Packing slip is important in order to show the item included in the packages of delivery.

Purchasing | Receiving | Accounts Payable | Department
Department
Approved 1 requisition form
Approved 1 requisition form 2 2
Assures best price is obtain & request is within budget limit
Assures best price is obtain & request is within budget limit
Verifies inadequency of vender’s Past records & prepares 5 copies of P.O
Verifies inadequency of vender’s Past records & prepares 5 copies of P.O
Requisition 4
Requisition 4
P.O 3
P.O 3
P.O 4
P.O 4
By P.O #
By P.O #
P.O 3
P.O 3
Requisition 1
Requisition 1
P.O 2
P.O 2 Purchase 1 Order (Prenumbered)
Purchase 1 Order (Prenumbered) To Rec. D
To Rec. D
To A/C Pay.
To A/C Pay.
To Dept. Head
To Dept. Head
To vendor
To vendor | To A/C Pay
To A/C Pay
Rec. Report 4
Rec. Report 4
P.O 4
P.O 4
Rec. Report 3

Rec. Report 3

Rec. Report 2

Rec. Report 2

By P.O #
By P.O #
To dept. Head or Quality Control
To dept. Head or Quality Control
Rec. Report 1 (Prenumbered)

Rec. Report 1 (Prenumbered)

Prepares 5 copies of Rec. Report
Prepares 5 copies of Rec. Report
Goods received & counted independently
Goods received & counted independently
From Purchasing
From Purchasing
Purchase order
Purchase order
To purchasing
To purchasing | Voucher 2
Voucher 2
By voucher
By voucher
Voucher 2
Voucher 2
To general a/c
To general a/c
Received to vendor reports & independently recommended monthly in current a/c
Received to vendor reports & independently recommended monthly in current a/c
Rec. Report 2
Rec. Report 2
Requisition 2
Requisition 2
Invoice
Invoice
Voucher 2
Voucher 2
Approves & prepare 3 copy voucher (prenumbered)
Approves & prepare 3 copy voucher (prenumbered)
Compares invoice quantity & price to P.O & report quality
Compares invoice quantity & price to P.O & report quality
Matches 4 doc. & recomputes math accuracy of invoices
Matches 4 doc. & recomputes math accuracy of invoices
By vendor pending invoice receiving
By vendor pending invoice receiving
P.O 4
P.O 4
Requisition 4
Requisition 4
From vendor
From vendor
From purchasing
From purchasing
From receiving
From receiving
Rec. Report 3
Rec. Report 3
Invoice
Invoice |