On the first picture is the basic concepts of a flowchart and I believe also the
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Question
On the first picture is the basic concepts of a flowchart and I believe also the payment cycle if someone can confirm.
On the second picture is the flowchart for the aquisition & payment cycle for XYZ company.
Now my question is On the second picture which has the official aquisition & payment cycle for XYZ company, my question is I want to know what each section in the second picture falls in the concepts of the 1st picture. For example, does (vendor issues shipment) fall into (cash disbursements journal) concept in picture 1?
Thanks.
Journals Transactions Acquisition of goods & services Acquisitions Journal Ledgers, Trial Balance, and Financial Statements -General Ledger and subsidiary . Cash records Disbursements Journal General Ledger trial balance o Financial Statements . General JournalExplanation / Answer
The first flowchart is not of the payment cycle. It is a flow showing abstraction levels while recording a simple transaction of acquisition of goods & services.
Mapping of the second Image process flow against the first one -
1. "Employee initiation for requisition" to "vendor issues shipment" = Don't fall into the process given in first picture. These are not financial transactions.
2. Receives shipment & complete 3 way match...= (Assuming the invoice is being received alongwith the shipment) = Here the "transaction" (Acquisition of goods) occures. Here "Acquisition journal" is hit.
3. Apply for payment = Not a financial transaction again.
3. Payment issue to vendor = Here the trannsaction "payment" occures. Now the "Cash disbursement journal" is hit.
In the system, while the transactions happen as shown above, ledgers are created simultaneously. Trial balannce & finnancial statements are also prepared which are balances of these ledgers.
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