topic 7 section 2

  1. steps for cash disbursements process
    • 7: voucher package
    • 8: checks
    • 9: cash disbursements file (C.D. journal) and A/P (A/P sub ledger)
  2. step 7: voucher package
    recall that in step 5, after A/P clerk records the purchase transaction, the clerk files the documents (pur req, P.O., R.R., Vend invoice) in the A/P file according to the invoice's due date
  3. cash disbursement process begins as the ___
    A/P clerk reviews this file of invoices due. When due, the A/P clerk pulls the documents from the file and prepares a voucher
  4. voucher
    a form used to authorize cash disbursement
  5. voucher package
    consists of the voucher and its related documents (PR, PO, RR, vendor's invoice)
  6. then the A/P clerk send the voucher package to the
    cash disbursement dept
  7. step 7: internal controls (voucher package) 2
    • -Authorization: voucher authorizes cash disbursement transactions
    • -Adequate doc and records: vouchers are pre-numbered
  8. step 8: checks
    after receiving the voucher package from the A/P dept, the clerk in the cash disbursements dept reviews the voucher package for accuracy and then prepares a check
  9. the check is then signed by
    an authorized person(s), normally the treasurer and the check is mailed to the vendor
  10. the cash disbursement clerk
    cancels the voucher package (marks the docs "paid") attaches a copy of the check to the package, and returns the package to the A/P dept for the cash disbursement to be recorded
  11. step 8 internal controls (checks)- 4
    • -Segregation of duties: custody of assets (signed checks) segregated from recording of cash disbursements (A/P dept)
    • -Adequate docs and records: checks are pre-numbered voucher packages are cancelled after payment
    • -Access controls: bank checks are safeguarded; signed checks are mailed promptly to vendors
    • -Independent verification: cash disbursement clerk reviews the voucher package before preparing check
  12. step 9: cash disbursements file (C.D. journal) and A/P master file (A/P sub ledger) internal controls -3
    • -segregation of duties
    • -Access controls
    • -Independent verification (A/P sub ledger is reconciled with the G/L)
  13. step 10: Master file (G/L)
    periodically, A/P det sends totals for daily (or weekly) cash disbursements transactions to the G/L dept for posting to the A/P and Cash accts in the master file (G/L)
  14. internal controls in step 9 (master file)-3
    • -Segregation of duties- same as step 9
    • -Access
    • -Independent verification- same as step 9
Card Set
topic 7 section 2
topic 7 section 2