Accounts Payable Setup and Recording Process

The firm records the liability as soon as the supplier's invoice is received.

If the estimated value of the obligation is materially incorrect, no adjusting entry is required.

The receipt of the invoice typically triggers Accounts Receivable (AR) procedures.

The three-way match involves verifying that what was ordered was received and is correctly priced.

The AP packet is the formal authority to make payment to the supplier.

The AP clerk prepares a journal voucher for the purchases journal at the beginning of the period.

The AP packet is filed in the open AP file.

The general ledger function receives the journal voucher from cash disbursements.

The AP control and cash accounts in the general ledger are not updated based on the reconciliation with the AP summary.

The journal voucher is not approved before being filed.

The general ledger function handles short-term operational tasks only.

The AP account summary is sent to the general ledger function for review.

Under the voucher payable system, each voucher is recorded in the voucher register.

A cash disbursement voucher is prepared by the AP clerk to approve payment under the voucher payable system.

The sum of the unpaid vouchers in the voucher register reflects the firm's total accounts receivable balance.

The general ledger function posts data contained in the journal voucher only to the inventory control account.

Using the perpetual inventory method, the journal entry involves Inventory-control and Accounts receivable-control.

Firms using a voucher payable system can write multiple checks to different suppliers on a single voucher.