Chapter 3A, Before Moving On - Sage 50 Flashcards
Name the types of transactions that are recorded in the PAYABLES module.
1) Purchase on credit from vendors (suppliers).
2) Purchase on company credit card from various suppliers.
3) Purchase returns.
4) Purchases with payments.
5) Payments to suppliers: with or without discounts, and full or partial payments.
6) Prepayments to suppliers for future invoices.
Describe the procedure for approving vendor invoices from the time they are received until they are paid.
What is the significance of this procedure?
When vendor (supplier) invoices are received, they are normally stamped with the date that they are received, plus an approval stamp.
The invoice may be matched with other documents that add support to the invoice; e.g., a shipping document. The approval stamp allows an authorized person to code the invoice with a G/L account for posting & to initial the invoice to approve the payment.
The Accounting Department then processes the invoice for payment.
The complete package of documents is sometimes attached to a cheque, for further approval when the cheque is signed.
After the cheque is released, the invoice should be stamped “PAID” to avoid a double posting.
The significance of this procedure is to ensure that only approved invoices are paid.
What types of entries are not recorded in the PAYABLES module?
(Ignore Sales entries)
The type of entries that are not recorded in the PAYABLES module are:
bank adjustments, such as service charges, NSF cheques from customers, regular bank lease payments, bank loan payments, etc.
These entries do not require a cheque to be issued as the bank has taken the funds from the account.
The following entries are also not recorded in the PAYABLES module:
Normal monthly adjustments for non-vendor or non-customer transactions such as depreciation of equipment, expense portion of prepaid items, various accruals, etc.
When journalizing non-merchandise purchases with HST, how is the HST recorded?
The HST is recorded to the HST Paid on Purchases account.
Give the journal entry for a merchandise purchase return of $300.00, plus HST of $39.00.
For merchandise for resale:
DR Account Payable 339.00
CR Inventory 300.00
CR HST on Purchases 39.00
The Purchase Return must be entered in the PAYABLES module as a negative invoice.
Describe briefly the steps in recording an invoice payment in full, net of a cash discount.
Assume that:
A) merchandise for resale was purchased
B)discounts are calculated on pre-tax amounts.
For merchandise for resale.
Use the Payments icon option to record the payment against the original invoice(s) and the discount will be calculated by Sage 50 Accounting if the appropriate terms were entered when purchased.
The actual payment entry would be: (assuming selling price of $300.00 plus HST and discount based on selling prices only):
DR Account Payable 339.00
CR Purchase Discounts 6.00
CR Cash 333.00
What happens when you post journal transactions in the PAYABLES module?
The vendor records are updated and the General ledger accounts affected are also updated.
When journalizing non-merchandise purchases with HST, on what amount is HST based?
The HST is calculated based on the cost of the items, before any other taxes.
