Exam 23: The Voucher System

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement in which the account balance is reported, and in Column 4 the account's nature (permanent/temporary). -

Describe how the transactions listed would be handled applying the gross approach method and the net approach method. For example: A $750 invoice with a 3/10 net 30 discount.

The entry to record payment of a voucher, for an invoice within the discount period, under the net method will include:

The voucher system strengthens internal control because:

Written authorizations for cash payments are called vouchers.

A voucher register is:

In a voucher system, Accounts Payable is the controlling account for the subsidiary ledger Unpaid Vouchers.

Emerald Corporation uses a voucher system and completed the following transactions: Required: Prepare general journal entries to record the above transactions. Omit explanations.

The voucher register would contain a column for all except:

When there is a return after the original voucher has been prepared, the first step is to cancel the old voucher.

Which of the following business documents would not originate with the purchasing company?

Vouchers Payable is a liability account on the balance sheet.

On October 1, Oak Company purchased $12,000 of merchandise from City Seed Company, terms 2/10, n/30, and prepared voucher #222. Cottonwood paid the invoice on October 15. Required: Prepare journal entries to record the above transactions. Assume Oak uses the net approach method for recording purchases.

Which of the following is not a part of internal control?

Unpaid vouchers are arranged by the due date in a tickler file.

Using the gross method approach, record the payment of the following transaction in time to take the discount. Connect Company bought $4,000 of merchandise, terms 3/10, n/30:

Button Corporation uses a voucher system. Record the following transactions in general journal format. Omit the explanations.

In the voucher register "miscellaneous accounts" are classified as ________ accounts.

A cash discount of $24 taken under the net method approach is recorded in:

On June 2, Sandoval Corporation purchased $7,000 of merchandise from Johnston Company, terms 2/10, n/30 and prepared voucher #402. Sandoval returned $400 of the supplies on June 8, because of poor quality. Sandoval cancelled voucher #402 and replaced it with #415. Required: Prepare journal entries to record the above transactions. Assume Sandoval uses the net approach method for recording purchases. Omit explanations.