Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA BT – FIA FBT › Purchase cycle control
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Ken Garrett.
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- October 22, 2022 at 7:56 am #669510
for each of the stages in the purchasing system provided below, identify what could go wrong and what controls the system designer could implement to try and deal with these problems.
Stage:
goods receivedAdministration:
goods received note is issued in put to four copies to accounts, ordered, warehouse and purchasing departmentWhat could go wrong:
goods received note not allocated to supplier account.Control measures:
GRN to be processed as soon as received and matched to purchase orders to be investigated.
Check condition of the goods received.
regular purchase ledger reconciliation.stage:
goods paid or returnedAdministration:
payment processed or credit note receivedWhat could go wrong:
incorrect payment made(in error or fraudulently)
payment or return not allocated to supplier account.Control measures:
match payment amount to original invoice
regular purchase ledger reconciliations
ensure that payment is correctly authorised.questions:
In good received stage good received note not allocate to supplier account
what items should supplier account include? why GRN not allocated to supplier account is a mistake?In goods paid or returned stage, payment or return not allocated to supplier account is mistake,
what is supplier account? where it is from? why payment and return should allocate to supplier account?October 24, 2022 at 1:30 pm #669826GRN indicates that goods are received and should be matched to the order to ensure they were legitimate receipts. Invoices should be paid only for ordered, received goods. If the GRN is not processed invoices won’t be paid and no one knows if the goods were ordered and received.
The supplier account shows what you owe the supplier. CR with approved invoices; most of these will eventually be paid. Dr on payment or if the goods are subsequently returned so that the liability for those goods is cancelled.
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