The Voucher System of Control

question 98

Multiple Choice

The voucher system of control:

• A)Is a set of procedures and approvals designed to control cash receipts and the acceptance of obligations.
• B)Establishes procedures for verifying,approving,and recording obligations for eventual cash disbursement.
• C)Establishes procedures for receiving checks for the sale of verified,approved,and recorded activities.
• D)Applies only when multiple purchases are made from the same supplier.
• E)Is required in large companies but not beneficial for small to mid-sized companies.

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Definitions:

Discount Period

The time frame in which a discount is available for early payment of an invoice.

Implied Annual Interest Rate

The interest rate not explicitly stated but inferred from the terms of a financial instrument over a one-year period.

Invoice Price

The initial price listed by the manufacturer or supplier on the invoice, before any discounts, allowances, or additional charges are applied.

Credit Terms

The terms that govern the timing and conditions of payment between buyers and sellers in credit transactions.