AUD-Lesson 3_Spending Cycle_Internal Control Continued

Question 1

What is the order of the documents in the Spending Cycle?

Answer 1

Purchase Requisition
Purchase Order
Receving Report
Purchase Invoice
Voucher

Question 2

What is the Purchase Requisition?

Answer 2

Approved by department head to purchase goods.

• One copy is retained by the Department
• One copy goes to Purchasing Deparment

Question 3

What is the Purchase Order?

Answer 3

Is the Authorization for purchase of goods
Prepared by Purchasing Department after receipt of Purchase Requisition
-One copy goes to Department Head
-One copy goes to A/P
-One copy goes to the Receiving Department
-The Receiving Department copy has the number of items purchased blanked out; this makes the Receiving Department count the received inventory (Receiving Report)

Question 4

What is the Receiving Report?

Answer 4

When the Receiving Department receives goods, they inspect and count the goods and generate a Receiving Report
-One copy goes to A/P so that it can be compared to the Purchase Order

Question 5

What is the Purchase Invoice?

Answer 5

Goes to A/P

-A/P compares Purchase Order, Receiving Report, and Purchase Invoice

Question 6

What is the Payment Voucher?

Answer 6

Check request that is prepared by A/P so that payment can be issued to the vendor.