Expenditure/Disbursements

Question 1

Purchasing activities in a transaction cycle

Answer 1

purchase request received

prepare the Purchase order
receiving report
suppliers invoice-billing

record in purchases journal

post to the general ledger accounts

Question 2

disbursement activities in a transaction cycle

Answer 2

prepare check and remittance advice

record payment in the cash disbursement journal

post cash payments to the general ledger

Question 3

difference between accounts payable and voucher payable systems

Answer 3

accounts payable- obligations are summarized by the specific suppliers involved (can identify the total owed to each supplier)

Voucher Payable-obligations are tracked by individual transactions without summarizing them by the specific suppliers involved.

Question 4

objectives of internal control over purchases and AP

Answer 4

goods and services are obtained by management authorization and based on approved orders

goods/services accounted for on a timely basis

adjustments based on manager approval

authorized payments of goods/services

Question 5

objective of internal control over cash disbursements

Answer 5

recorded in proper amounts
authorized by management
periodic comparisons are made 
cash and disbursement records are made by certain personnel
adjusting entry managements approval