PLEASE ANSWER ALL OF THESE QUESTIONS Assignment: Accounting for Purchases and Ca
ID: 2574859 • Letter: P
Question
PLEASE ANSWER ALL OF THESE QUESTIONS
Assignment: Accounting for Purchases and Cash Payments
Part 1
List four procedures that a business should use to control its cash payments.
1)
2)
3)
4)
Part 2 (9 points)
Determine the due dates and discount amount for the following example:
A software company frequently purchases merchandise on account. When it receives an invoice, a clerk puts a processing stamp on the invoice indicating the due date, the amount of any discount, and the amount to be paid.
The following invoices were received during March:
S. No
Invoice Number
Invoice Date
Credit Terms
Invoice Amounts
1.
2456
January 5
2/10, n/30
$3,000.00
2.
7895
January 7
3/10, n/30
$5,500.00
3.
6785
January 12
2/15, n/60
$729.95
4.
7859
January 23
2/10, n/30
$1,526.50
Instructions: The first invoice has been completed as an example. Prepare a form similar to the one that follows using your spreadsheet software. For each invoice do the following:
Determine the due date. Assume that the software company always pays invoices within the discount period.
Calculate the discount amount, if any.
Calculate the amount to be paid.
Calculate the amount the software company will save by taking advantage of all discounts.
Invoice
Number
Invoice Date
Credit Terms
Invoice Amount
Due Date
Discount Amount
Amount to be Paid
1.
2456
Jan. 5
2/10, n/30
$3000.00
Jan. 15
$60.00
$2940.00
2.
3.
4.
S. No
Invoice Number
Invoice Date
Credit Terms
Invoice Amounts
1.
2456
January 5
2/10, n/30
$3,000.00
2.
7895
January 7
3/10, n/30
$5,500.00
3.
6785
January 12
2/15, n/60
$729.95
4.
7859
January 23
2/10, n/30
$1,526.50
Explanation / Answer
PART 1:
List four procedures that a business should use to control its cash payments:
1. USING PRENUMBERED CHECKS
2.REQUIRE PROPER AUTHORISATION OF ALL CASH PAYMENTS. KEEP EACH AND EVERY INVOICES OF PAYEMENTS TO SUPPORT EACH TRANSACTION.
3. ALLOW ONLY AUTHORIZED PERSONS TO SIGN CHECKS. WRITE CHECKS FOR ALL PAYMENTS.
4. RETAIN AND ACCOUNT FOR SPOILED CHECKS. KEEP THESE CHECKS SEPARATELY IN SEQUENCE DATEWISE.
PART 2:
714.85
S.NO INVOICE NUMBER INVOICE DATE CREDIT TERMS INVOICE AMOUNT DUE DATE DISCOUNT AMOUNT AMOUNT TO BE PAID 1 2456 JAN 5 2/10,N/30 3000.00 JAN 15 60.00 2940 2 7895 JAN 7 3/10,N/30 5500 JAN 17 165 (5500*3%) 5335 3 6785 JAN 12 2/15,N/60 729.95 JAN 27 14.60 (729.95*2%)714.85
4 7859 JAN 23 2/10,N/30 1526.50 FEB 2 30.53 (1526.95*2%) 1495.97Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.