6.2 Accounting for Purchases
Here we focus on documenting and recording purchases. We cover how to record purchases under different accounting systems and how to handle returns and discounts.
All purchases should be supported by a purchase order. This document initiates the transaction that ends in the delivery of product and subsequent billing. The following is a purchase order from Simple Simon Toys to The Learning Company. Notice that it is prenumbered so Simple Simon can keep track of outstanding orders. There’s also a line for an authorized signature—a safeguard that helps prevent unauthorized orders. The purchase order should also include shipping instructions ...