The Voucher System Requires That Invoices Be Compared with Receiving

question 8

Multiple Choice

The voucher system requires that invoices be compared with receiving reports and express bills before a voucher is prepared and approved for payment.

• A)Unrecorded cheques appear in the bank statement
• B)The treasurer takes funds by preparing a fictitious voucher charging "Miscellaneous General Expenses"
• C)An employee in the purchasing department sends through fictitious invoices and receives payment
• D)A cash shortage is covered by underfooting outstanding cheques on the bank reconciliation
• E)A cash shortage is covered by omitting some of the outstanding cheques from the bank reconciliation

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Definitions:

Operating Capacity

The maximum output or production level a company can sustain with its current resources, such as machinery and labor, over a specific period.

Unused Capacity

Resources or production potential that remains unutilized or is not being used to its full extent.

Opportunity Cost

The cost of the next best alternative that is foregone when a decision is made to choose one option over others.

Cash Outlay

The actual amount of money spent by a company to purchase goods or services, as opposed to accounting estimates or accruals.