Description

The Purchasing Expenditure Cycle of a business is focused on the functions that:

• Acquire property, goods and services
• Pay for them
• Classify, summarize and report what was acquired and what was paid

This cycle included the acquisition of, and payment for:

• Property, plant and equipment
• Goods (inventories) used directly in the production process or in the providing of services or acquired for resale
• Supplies and other services.

A significant part of the accounting effort in an expenditure cycle usually is spent classifying the acquisition of resources among various asset and expense accounts. Due to the timing differences between the receipt of resources and the expenditure of cash, accounts payable and various accrued liabilities also are affected directly by the expenditure cycle.

Course Key Concepts: Internal Accounting Controls, SOX 404, ICFR, Internal Control over Financial Reporting, Independent Public Accountants, Internal Auditors, Business Cycles, Treasury, Expenditure, Purchasing, Payroll, Conversion, Revenue.