The purchasing process is very important to a business, as manufacturers can’t make goods without raw materials and retailers can’t sell goods without first buying them. Even service providers must acquire goods or services to provide services (e.g., accounting firms need to purchase tax preparation software and law firms purchase software to research legal cases). Before auditing the purchasing process, the auditor needs to get an overview of the activities that make up a company’s purchasing process. The purchasing process consists of the following steps: 1. Requisitioning goods or services 2. Purchasing goods or services 3. Receiving goods or services 4. Processing invoices 5. Making disbursements 6. Updating records 0:00 Introduction 0:22 Requisitioning goods or services 1:19 Purchasing goods or services 4:09 Receiving goods or services 5:37 Processing invoices 7:57 Making disbursements 8:40 Updating records — Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage …
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When a company grants share-based compensation that has a performance condition (which means a certain sales, profit, or other performance condition must be met in order for the share-based compensation to vest), the company must assess at the end of each period whether it is probable that the performance condition will be met. If it is not probable that the performance condition will be met, the company must reverse any compensation expense previously recorded for this share-based compensation (if no compensation expense was previously recorded, the company wouldn't make a journal entry). If it is probable that the performance condition will be met, the company should record compensation expense. Note that for share-based compensation with a MARKET condition (based on the stock price) instead of a performance condition, the company should record compensation expense whether or not it is probable that the market condition will be met. — Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education freely available to the world. — SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS, PLUS: • A 23-PAGE GUIDE TO MANAGERIAL ACCOUNTING • A 44-PAGE GUIDE TO U.S. TAXATION • A 75-PAGE GUIDE TO FINANCIAL STATEMENT ANALYSIS • MANY MORE FREE PDF GUIDES AND SPREADSHEETS * http://eepurl.com/dIaa5z — SUPPORT EDSPIRA ON PATREON *https://www.patreon.com/prof_mclaughlin — GET CERTIFIED IN FINANCIAL STATEMENT ANALYSIS, IFRS 16, AND ASSET-LIABILITY MANAGEMENT * https://edspira.thinkific.com — LISTEN TO THE SCHEME PODCAST * Apple Podcasts: https://podcasts.apple.com/us/podcast/scheme/id1522352725 * Spotify: https://open.spotify.com/show/4WaNTqVFxISHlgcSWNT1kc * Website: https://www.edspira.com/podcast-2/ — GET TAX TIPS ON TIKTOK * https://www.tiktok.com/@prof_mclaughlin — ACCESS INDEX OF VIDEOS * https://www.edspira.com/index — CONNECT WITH EDSPIRA * Facebook: https://www.facebook.com/Edspira * Instagram: https://www.instagram.com/edspiradotcom * LinkedIn: https://www.linkedin.com/company/edspira — CONNECT WITH MICHAEL * Twitter: https://www.twitter.com/Prof_McLaughlin * LinkedIn: https://www.linkedin.com/in/prof-michael-mclaughlin — ABOUT EDSPIRA AND ITS CREATOR * https://www.edspira.com/about/ * https://michaelmclaughlin.com