Question
True False The authorization of a cash disbursement occurs when the accounts payable department matches the purchase order, receiving report, and the invoice, and then
True False
The authorization of a cash disbursement occurs when the accounts payable department matches the purchase order, receiving report, and the invoice, and then forwards the matched documents to the cash disbursements department.
Designated members of management should be given the responsibility for authorizing the actual payments and sign their signatures on the face of the check.
It is not necessary to get specific authorization for each individual routine transactions.
Routine transactions refer to common business transactions such as payroll and fixed asset transactions.
Accounting for a fixed asset over the life of the asset would have features of non-routine transactions only.
When an organization uses a separate checking account to handle payroll transactions, it is easier to account for the payroll transactions and to distinguish them from cash disbursements for other business purposes.
Payroll disbursements are to be authorized by the accounts payable department on the basis of the company's need to satisfy its obligation to its employees.
The paymaster should be independent from the departmental supervision responsibilities, so that it can be determined that the paychecks are being distributed to active employees.
An alternative to batch processing is the use of electronic timekeeping devices, such as time clocks or badge readers.
The investment in fixed assets is often the largest asset reported on the income statement.
Many companies use a tracking system for their fixed assets that would include applying a fixed asset tag, number, or label to the asset.
In the case of high-dollar assets, there should be a strict approval process that requires the authorization of top management or the initiation of the capital budgeting procedures.
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