Receiving Materials:

The function of the receiving department is to: unload and unpack incoming materials; check quantities received against the shippers packing list; identify goods received with descriptions on the purchase order; prepare a receiving report; notify the purchasing department of descriptions discovered; arrange for inspection when necessary; notify the traffic department and the purchasing department of any damage in transit; and rout accepted materials to the appropriate factory location.
The receiving report shows the purchase order number, the account number to be charged, the name of the vendor, details relating to transportation, and the quantity and type of the goods receive. The form also provides a space for the inspection department to note either the complete approval of the shipment or the quantity rejected and the reason for the rejection, in inspection does not take place immediately after receipt of the materials, the receiving report is distributed as follows:

1. The receiving department keeps one copy and sends another copy to the purchasing department as notice of the arrival of the materials
2. All other copies go to the inspection department, and are distributed when inspection is completed. After inspection, one copy of the receiving report, with the inspection result noted thereon, is sent to the accounting department, where it is matched with the purchase order and the venders invoice and the paid. Other copies go to various departments such as materials and production planning. One copy accompanies the materials, so that the storekeeper knows the quantity and the kind of materials received.

Invoice Approval and Data Processing:

By the time materials reach the receiving department, the company unusually will have received the invoice from the vendor.
This invoice and a copy of the purchase order are filled in the accounting department. When the receiving report with its inspection reports arrives, the receiving report and the invoice are compared to see that materials received meet purchase order specifications as to items, quantities, price extensions, discount and credit terms, shipping instruction, and other possible conditions. I the invoice is found to be correct or has been adjusted because of rejects as noted by the inspection department, the invoice clerk approves it, attaches it to the purchase order and the receiving report, and sends these papers to another clerk for the preparation of the voucher.
Invoice approval 
is an important step in materials control procedure, since it certifies that the goods have been received as ordered and the payment can be made. The invoice approval information is often built into a rubber stamp and each invoice is stamped.
The verification procedure is handed by responsible invoice clerks, thus assuring systematic examination and handling of the paper work necessary for adequate control of materials purchases. The preparation of the voucher is based on the information taken from the invoice approval stamp.
The voucher data are entered first in the purchases journal and are posted to the subsidiary records. They are then entered in the cash payments journal according to the due date for payment. The original voucher and two copies are sent to the treasurer for issuance of the check. The treasurer mails the check with the original voucher to the vendor, files a voucher copy, and returns one voucher copy to the accounting department for the vendors file. Purchase transactions entered in the purchases journal affect the control accounts and the subsidiary records as shown in the chart below:

Transaction	General Ledger Control		Subsidiary Records
	Debit	Credit
Materials purchased for stock	Materials	Accounts Payable	Entry in the received section in the materials ledger card
Materials purchased for a particular job or department	Work in process	Accounts Payable	Entry in the direct materials section of the production or the job order
Materials and supplies purchased for factory overhead purposes	Materials	Accounts Payable	Entry in the received section of the materials ledger card
Supplies purchased for marketing and administrative office	Materials Marketing expenses control Administrative expenses control	Accounts Payable	Entry in the received section of the materials ledger card or in the proper columns of the marketing or administrative expenses analysis sheets
Purchases of services or repairs	Factory Overhead Marketing expenses control Administrative expenses control	Accounts Payable	Entry in the proper account columns of the expenses analysis sheet
Purchase of equipment	Equipment	Accounts Payable	Entry on the equipment ledger card