VOUCHER SYSTEM

VOUCHER SYSTEM:

Voucher system is defined as Internal financial control system for cash or check payments that relies on vouchers to (1) establish the propriety of transactions, (2) establish the amount being paid, and (3) name the ledger account(s) in which the transaction is to be recorded.

Internal financial control system for cash or check payments that relies on vouchers to (1) establish the propriety of transactions, (2) establish the amount being paid, and (3) name the ledger account(s) in which the transaction is to be recorded.

Accounting systems .often facilitate the flow of accounting by the use of the journal voucher control.system, consisting of journal vouchers supported by the original transaction ,documents. In such systems, journal entries are made via the journal voucher, which represents the transactions that have occurred .during a given period and that have been identified with the chart of accounts. Essential to a journal vouchereontrol system is the •

voucher itself. Whether a manual, mechanized, or computerized accounting information system is utilized, the journal voucher is prepared for the purpose of summarizing the transactions in journals and posting them to the accounts.

The journal voucher format use is generally quite similar among organizations. Basically, it should indicate the voucher number, the date, the accounts with their aecount number or codes, the amounts to be debited and credited,: and approval (as illustrated belOw). When subsidiary ledgers or cost ledgers are involved, columns are added to meet the needs of the detailed expense and Cost subsidiary ledger requirements at the same time; subsidiary details may also be posted directly frbm the transaction documents.

Journal Voucher Evidencing Purchase of Materials on Account:   •

., Dade

JOURNAL VOUCIIER

‘                   .

No.

. 126

Month

Day -il

March

Approved

ACCOUNT

ACCT. NO.
OR CODE

AMOUNT

DEBIT.

CREDIT

Materials,

III

20,000

Accounts payable

212

20,000

 

CONTROL ACCOUNTS:

Cost accounting makes extensive use of control accounts. To illustrate, the materials account controls hundreds of different materials, and the factor overhead account controls indirect labour, supplies, rent insurance, taxes, repairs, and other factory expenses. The following schedule lists the generally used control.accounts with their subsidiary ledgers or records:

CONTROL ‘(‘COUNT

Materials

Factory Overhead

Work in Process

Finished Goods

Machinery and Equipment

SUBSIDIARY LEDGER OR RECORD

Materials ledger cards – perpetual inventory

Expense ledger or departmental expense analysis

sheets.

{

Cost sheets –job order costing

ProdUction reports – process costing

Finished goods ledger cards

Plant or equipment ledger

The control account-subsidiary record format- is used when it is desirable to maintain detailed information about general ledger accounts. Or A subsidiary Ledger contains a

separate account for each’of the items included in the balance of a general ledger account. For example, an account receivable subsidiary ledger contains a separate account for each credit customer. If the company has 400 credit customers, there are 400 accounts in the accounts receivable subsidiary ledger. The balance of these 400 subsidiary accounts add up to the balance ill the general ledgenaccount.

Use of control accounts in cost accounting is based on the same principles as those used in financial accounting. For instance, an entry is made in the purchases journal for materials purchased — debiting Materials and crediting Accounts Payable. The total of the Materials column is -posted at the end of the period. The individual items purchased are also entered on materials ledger cards. The total of the individual balances on the materials ledger cards must agree with the balance in the materials account in the general ledger.

A company’s cost procedure determines the type of subsidiary record that supports the work in process control account. With job order costing, job order cost sheets prepared for each job (or work order) receive the details that are posted in totals to the work in process account at the end of the month. With process costing, cost of production reports indicate the daily, weekly, or monthly figures that appear in Work in Process.

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