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Chapter 6: 7E_2 (page 307)

The voucher system of control is designed to control cash disbursements and the acceptance of obligations.

2. What types of expenditures should be overseen by a voucher system of control?

Short Answer

Expert verified

Answer

A voucher system of control should consider all types of expenditures.

Step by step solution

01

Step-by-Step SolutionStep 1: Introduction to topic

Expenditure- It is a payment or dispensing. The expenditure might be for the acquisition of an asset, a decrease of liability, dispersion to the owners, or it may be the payment in a similar accounting period as the sum turns into an expense.

02

Expenditure to be overseen by a voucher system-

All expenditures must be administered by a voucher system of control (not just the acquisition of products). Expenditure includes Capital Expenditure, Revenue Expenditure, and Deferred Revenue Expenditure.

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Most popular questions from this chapter

Palmona Co. establishes a $200 petty cash fund on January 1. On January 8, the fund shows $38 in cash along with receipts for the following expenditures: postage, \(74; transportation-in, \)29; delivery expenses, \(16; and miscellaneous expenses, \)43. Palmona uses the perpetual system in accounting for merchandise inventory. Prepare journal entries to

(1) establish the fund on January 1(2) reimburse it on January 8 (3) both reimburse the fund and increase it to $450 on January 8, assuming no entry in part 2. (Hint: Make two separate entries for part 3.)

Management uses a voucher system to help control and monitor cash disbursements. Which one or more of the four documents listed below are prepared as part of a voucher system of control?

  1. Purchase order b. Outstanding check c. Invoice d. Voucher

Refer to Samsung’s balance sheet in Appendix A. How does its cash (titled “Cash and cash equivalents”) compare with its other current assets (in both amount and percent) as of December 31, 2015? Compare and assess its cash at December 31, 2015, with its cash at December 31, 2014.

What are the limitations of internal controls?

An internal control system consists of all policies and procedures used to protect assets, ensure reliable accounting, promote efficient operations, and urge adherence to company policies. Evaluate each of the following statements and indicate which are true and which are false regarding the objectives of an internal control system.

2. The primary objective of internal control procedures is to safeguard the business against theft from government agencies.
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