College Accounting, by Heintz and Parry

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College Accounting, by Heintz and Parry

• Chapter 13
• The Voucher System

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During the first month at the shop, Eddie noticed
that there werent always good internal controls.
Internal controls are procedures designed to
prevent 1) stealing 2) incorrect numbers,
and 3) bad business decisions.The store was
so disorganized about paying bills that they
almost paid one twice, once from the invoice and
once from the monthly statement. Eddie talked to
Nick Flannery about the three important elements
for controlling expenditures1) Segregation of
duties (splitting related tasks between
people),2) Authorization procedures (making
sure that decisions are approved by the proper
people), and 3) Adequate documents and records.
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Nick and Eddie decided that what the store needed
was a voucher system. This system requires that
every payment be supported by a voucher, a
document that verifies the expenditure and
properly authorizes payment. In this case, Nick
would always be the one to approve the purchase,
and Eddie would always verify that the right
accounts are debited and credited. When using
such a system, the company uses a new journal
called a voucher register. This journal
documents every voucher and thus sets up a
liability for every cash payment that is to be
made.Question What journal does the voucher
register replace?
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Answer The voucher register replaces the
Purchases Journal. Below is Aprils voucher
register before month-end processing. General
debits have been posted during the month. This
document and the unpaid vouchers file frequently
replace the accounts payable ledger. In the
general ledger, VR1 would be the posting
reference. Lines with no payment date or check
number represent the vouchers payable on April
30. Voucher
Register Page 1
Date Voucher Issued
To Purchases Supplies Wage Exp.

Number
Debit Debit Debit
2000Apr. 2 100 Springfield Gas
Elec. 4 101 Bettys Offices
Stuff 12 102 Breaking Records
326.00
General Debit Vouchers Pay.
Payment Account P.R. Amount
Credit Date Ck.
Utility Exp. 541 98.50
98.50 4/9 109
Furniture Fix. 131 210.00
210.00
326.00
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One other journal would change under the voucher
system. A Check Register would be used to list
every check in numerical order and account for
its use (even if it is voided). Each check should
also have a voucher that it is paying. If no
suppliers were offering purchase discounts, this
register could have just one amount column,
similar to the Purchases Journal you used in
chapter 12. Questions 1) What journal does
the check register replace?2) What accounts
should always be debited and credited when using
the check register?
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Answers 1) The check register replaces the Cash
Payments Journal.2) In the check register, you
will always debit vouchers payable and credit
cash. Check
Register
Page 1 Date Ck.
Payee Vouch.Pay. Dr. Pur.
Disct. Cash
Amt.
Credit Credit 2000Apr. 9 109
Springfield Gas Elec. 100 98.50
98.50 11 110 Round
Flat Records 98 2,876.00
28.76 2,847.24

2,974.50 28.76 2,945.74

(211) (511.1)
(111) This is Aprils check register for the
store. The posting reference in the general
ledger would be CK1.Question Why not use CR1
as the posting reference?
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Answer The cash receipts journal already uses
CR as its posting reference.Summary One of
the tasks that really requires judgment and
creativity on the part of accountants is the
design and analysis of internal controls. The
goal is to find the proper balance between
efficiency (dont create extra steps when they
arent needed) and protection of the firms
assets.

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