Accounting Procedures 3 rd Edition Steven M. Bragg
Chapter 1 Overview of Accounting Procedures... 1 Learning Objectives... 1 Introduction... 1 The Nature of a Procedure... 1 The Need for Procedures... 1 The Number of Procedures to Develop... 2 Obtaining Buy-In... 3 The Mechanics of Procedure Production... 4 Procedure Production Steps... 4 Formatting Steps... 4 Procedure Design Tips... 5 Dissemination of Procedures... 6 Retrieval of Procedures... 7 Procedural Updates... 8 Enforcement of Procedures... 8 Carrot Activities... 8 Stick Activities... 9 Deviations from Procedures... 9 The Procedure Writer... 10 The Need for Policies... 10 Subsequent Chapters... 10 Review Questions... 12 Review Answers... 13 Chapter 2 Order Entry Procedures... 15 Learning Objectives... 15 Introduction... 15 Forms: Sales Order Form... 15 Forms: Return Merchandise Authorization... 16 The Order Entry Procedure (Manual System)... 17 The Order Entry Procedure (Integrated System)... 19 The Granting of Return Merchandise Authorizations... 21 Summary... 23 Review Questions... 24 Review Answers... 25 Chapter 3 Credit Procedures... 27 Learning Objectives... 27 Introduction... 27 Forms: Sales Order Form... 27 Forms: Credit Application... 28 The Credit Examination Procedure (Manual System)... 29 The Credit Examination Procedure (Integrated System)... 33 Summary... 37 Review Questions... 38 Review Answers... 39 Chapter 4 Shipping Procedures... 41 Learning Objectives... 41 Introduction... 41 Forms: Sales Order Form... 41 Forms: Pick List... 42 Forms: Packing Slip... 43 The Shipping Procedure (Manual System)... 44
The Shipping Procedure (Integrated System)... 47 The Drop Shipping Procedure... 50 Summary... 50 Review Questions... 51 Review Answers... 52 Chapter 5 Customer Billing Procedures... 53 Learning Objectives... 53 Introduction... 53 Forms: The Invoice... 53 Forms: The Credit Memo... 54 Forms: The Statement of Account... 57 The Billing Procedure... 57 Additional Manual Billing Steps... 61 Variations on the Billing Procedure... 63 The Credit Memo Procedure... 66 The Statement of Account Procedure... 67 Cash Sales... 69 Summary... 70 Review Questions... 71 Review Answers... 72 Chapter 6 Collection Procedures... 73 Learning Objectives... 73 Introduction... 73 Forms: The Credit Memo Approval Form... 73 The Collection Procedure... 74 The Credit Memo Request Procedure... 77 The Allowance for Doubtful Accounts Calculation Procedure... 77 Summary... 79 Review Questions... 80 Review Answers... 81 Chapter 7 Cash Receipts Procedures... 83 Learning Objectives... 83 Introduction... 83 Forms: Sales Receipt... 83 Forms: Mailroom Check Receipts List... 84 The Cash Receipts Processing Procedure... 85 The Check Receipts Processing Procedure... 87 The Process Credit Card Receipts Procedure... 90 The Process Lockbox Receipts Procedure... 92 The Remote Deposit Capture Procedure... 93 Summary... 96 Review Questions... 97 Review Answers... 98 Chapter 8 Purchasing Procedures... 99 Learning Objectives... 99 Introduction... 99 Forms: Purchase Requisition... 99 Forms: Purchase Order... 100 Forms: Blanket Purchase Order Release... 101 The Purchase Requisition Procedure... 102 The Purchasing Procedure... 104 Variations on the Purchasing Procedure... 107 The Bidding Procedure... 108 ii
Summary... 110 Review Questions... 111 Review Answers... 112 Chapter 9 Procurement Card Procedures... 113 Learning Objectives... 113 Introduction... 113 Forms: Reconciliation Checklist... 113 Forms: Missing Receipts Form... 114 Forms: Disputed Expenditure Form... 114 Forms: Lost Card Notification Form... 115 The Card Reconciliation Procedure... 116 The Lost Card Procedure... 119 Summary... 120 Review Questions... 121 Review Answers... 122 Chapter 10 Expense Report Procedures... 123 Learning Objectives... 123 Introduction... 123 Forms: Expense Report Form... 123 The Expense Report Submission Procedure (Manual System)... 124 The On-Line Expense Report Submission Procedure... 128 The Expense Report Review Procedure... 129 Summary... 131 Review Questions... 132 Review Answers... 133 Chapter 11 Petty Cash Procedures... 135 Learning Objectives... 135 Introduction... 135 Forms: Petty Cash Transfer Form... 135 Forms: Petty Cash Voucher... 136 Forms: Petty Cash Book... 136 Forms: Petty Cash Reconciliation... 137 The Petty Cash Funding Procedure... 138 The Petty Cash Disbursement Procedure... 140 The Petty Cash Review Procedure... 142 Summary... 144 Review Questions... 145 Review Answers... 146 Chapter 12 Receiving Procedures... 147 Learning Objectives... 147 Introduction... 147 Forms: Receiving Report... 147 Forms: Return Merchandise Authorization... 148 Forms: RMA Receipt Notification... 148 The Receiving Procedure (Manual System)... 149 The Receiving Procedure (Computerized System)... 152 The Receiving Returned Goods Procedure... 155 Summary... 156 Review Questions... 157 Review Answers... 158 Chapter 13 Accounts Payable Procedures... 159 Learning Objectives... 159 iii
Introduction... 159 Forms: Check Request Form... 159 Forms: Adjustment Letter... 160 The Supplier Invoice Processing Procedure (Manual System)... 161 The Supplier Invoice Processing Procedure (Integrated System)... 163 Accounts Payable Credits Processing Procedure... 165 The Evaluated Receipts Processing Procedure... 167 The Check Payment Issuance Procedure... 168 Payment Alternatives... 172 The Void Checks Procedure... 172 Summary... 173 Review Questions... 174 Review Answers... 175 Chapter 14 Inventory Procedures... 177 Learning Objectives... 177 Introduction... 177 Forms: Inventory Count Tag... 177 The Physical Inventory Count Procedure... 178 The Cycle Counting Procedure... 181 The Obsolete Inventory Investigation Procedure... 183 The Inventory Valuation Procedure... 185 Summary... 189 Review Questions... 190 Review Answers... 191 Chapter 15 Payroll Procedures... 193 Learning Objectives... 193 Introduction... 193 Forms: For the New Hire... 193 Forms: The Timecard... 196 Forms: The Paycheck and Remittance Advice... 199 The Adding an Employee Procedure... 199 The Timecard Data Collection Procedure... 201 The Commission Calculation Procedure... 205 The Payroll Processing Procedure... 206 The Employee Payment Procedure... 211 Summary... 213 Review Questions... 214 Review Answers... 215 Chapter 16 Fixed Asset Procedures... 217 Learning Objectives... 217 Introduction... 217 Forms: Capital Request Form... 217 Forms: Asset Disposal Form... 218 The Capital Request Form Completion Procedure... 219 The Capital Request Form Analysis Procedure... 221 The Post Installation Review Procedure... 225 The Asset Recognition Procedure... 227 The Interest Capitalization Procedure... 229 The Fixed Asset Record Creation Procedure... 231 The Asset Revaluation Procedure... 234 The Asset Exchange Procedure... 236 The Depreciation Procedure... 238 The Impairment Analysis Procedure... 239 The Asset Retirement Obligation Procedure... 242 iv
The Intangible Asset Analysis Procedure... 244 The Asset Tracking Procedure... 246 The Asset Disposal Procedure... 249 Summary... 251 Review Questions... 252 Review Answers... 253 Chapter 17 Treasury Procedures... 255 Learning Objectives... 255 Introduction... 255 Forms: Cash Forecast... 255 Forms: Investment Quote Sheet... 256 Forms: Drawdown/Repayment Form... 257 The Cash Forecasting Procedure... 258 The Funds Investment Procedure... 260 The Cash Concentration Procedure... 262 The Line of Credit Borrowing Procedure... 265 The Foreign Exchange Hedging Procedure... 266 Summary... 269 Review Questions... 270 Review Answers... 271 Chapter 18 Closing the Books Procedures... 273 Learning Objectives... 273 Introduction... 273 Closing the Books Private Company... 273 Closing the Books Public Company... 278 Summary... 280 Review Questions... 281 Review Answers... 282 Glossary... 283 Index... 289 v