Expenditures/Disbursements

Question 1

What’s the “general” flow for processing Expenditures?

Answer 1

Purchase Request > PO - Receiver - Suppliers Invoice > Purchase Journal > GL

Question 2

What’s the “general” flow for processing Disbursements?

Answer 2

Check with Remittance Advice > Cash Disbursement Journal > GL

Question 3

What’s the Objectives of Internal Controls over Purchases and Accounts Payable?

Answer 3

1 Goods and services are obtained in accordance with management’s authorization
2 The terms of acquisitions (including prices and quantities) are in accordance with management’s authorization
3 All goods and services received are accurately accounted for on a timely basis
4 Adjustments to vendor accounts are made according to management’s authorization
5 Amounts payable for goods and services received are accurately recorded
6 Access to purchasing, receiving, and accounts payable records is limited to authorized personnel

Question 4

What’s the Objectives of Internal Controls over Cash Disbursements?

Answer 4

1 Disbursements are for authorized expenditures as approved by management.
2 Disbursements are recorded at the proper amounts and with the appropriate classifications.
3 Periodic comparisons are made between the supporting detailed accounting records (including bank reconciliations) and the general ledger control accounts.
4 Any adjusting journal entries for cash accounts are in accordance with management’s authorization.
5 Access to cash and disbursement records is limited to authorized personnel

Question 5

What’s an Accounts Payable system?

Answer 5

It keeps track of payables by the name of the vendor. (Hence, payables are identified by the total amount owed to the various individual suppliers.)

Question 6

What’s a Voucher Payable system?

Answer 6

keeps track of individual transactions without summarizing amounts owed in total to individual vendors