Which of the following is a sound internal control procedure for cash disbursements?
A)Making copies of purchase orders for the receiving department so they know how many items to be expected upon delivery.
B)Using presigned checks to facilitate payment within the cash discount period.
C)Comparing purchase requisitions,purchase orders,receiving reports,and invoices.
D)Requiring the signature of the purchasing department supervisor on checks.

Question

Quizplus · Accepted Answer

Comparing purchase requisitions, purchase orders, receiving reports, and invoices helps ensure that the goods or services being paid for were actually received and are accurate. This procedure helps prevent payment for goods or services that were never received or that were overcharged. A, B, and D also have some merit as internal control procedures, but they do not provide the level of assurance that C does. For example, making copies of purchase orders for the receiving department only ensures that the department is aware of how many items to expect, but it does not verify whether or not the items were received or whether the payment is accurate. Similarly, using presigned checks may expedite payment, but it does not ensure that the payment is accurate or that the goods or services were received as expected. Requiring the signature of a purchasing department supervisor on checks provides some level of approval, but it does not guarantee that the payment is accurate or that the goods or services were received as expected.

Which of the Following Is a Sound Internal Control Procedure