Accounts Payable and Cash DisbursementMaryam describes as follows of how she handles the cash payment to the EMSB's vendors,specifically on the purchase of inventories. Upon receiving the purchase order copy, Maryamtemporarily files the purchase order (by supplier name) in 'Incoming Vendor's Invoice' whilewaiting for the invoice to arrive from the vendor. When the vendor's invoice arrives, she takesout the respective purchase order copy that matches the vendor's invoice. The supplier invoicedetails are reconciled with the respective purchase order. Maryam gets into EMSB'saccounting system and records the vendor's invoice by keying-in the reseller's ID. A computerprogram then reads the vendor's master file and displays the vendor's details on screen. Shethen records the vendor's invoice details onto the system. A next computer program edits andchecks the invoice details entered for possible data entry errors. Upon saving the transaction,the computer program records the transaction into the purchase file and updates therespective vendor's file and subsequently the general ledger master file. She then prints theaccounts payable summary and files together with the purchase order copy and vendor'sinvoice by the invoice's due date into an 'Open Invoice' file. When asked about the paymentprocedures, Maryam elaborated as below:On every Monday, she checks on the 'invoice for payment file' for any outstanding invoicesthat are becoming due within that week. For all invoices becoming due, she takes out theinvoices with the attached purchase order copy and enters the vendor's details into theEMSB's accounting system (account payable cash payment module). Upon entering thevendor's details, a computer program retrieves the respective vendor's record from thevendor's master file and displays all pending invoices on screen. She then chooses theinvoices for payment and records the payment details. The computer program records thetransactions into a cash disbursement file and creates a payment voucher register file.Consequently, the computer program updates the vendor's master file and general ledgermaster file for all transactions entered. Next, she prints a payment voucher for the respectiveinvoices due for payment. She later forwards the payment vouchers to Jason, the accountmanager for payment processing. The account manager makes a payment using onlinebanking to the respective vendors as per the payment voucher. The payment slip is then givenback to her for filing purpose. Finally, she attaches the purchase order, vendor's invoice,payment voucher and the payment slip into the 'Paid Invoice' file based on the payment date.When asked for any specific reports prepared at the end of each month, Maryam indicatedthat she produces a report from EMSB accounting system comprising of purchase summary,accounts payable summary, and total cash disbursement of the month. The reports areforwarded to the general manager. (a) Identify FOUR (4) possible weaknesses in the EMSB's Cash Disbursementprocedures. Provide an appropriate argument to support each of the weaknesseshighlighted.(b) Suggest and explain appropriate internal control procedure to rectify each of theweakness identified in (a).Please use the following format to answer questions (a) and (b) above.(a) Internal Control WeaknessWeakness:(b) SuggestionsSuggestion:No.1.Related case (Explanation of weakness):Why (Explanation):

A material weakness in internal control is a deficiency, or a combination of deficiencies, in…

(a) Identify FOUR (4) possible weaknesses in the EMSB's Cash Disbursement procedures. Provide an appropriate argument to support each of the weaknesses highlighted. (b) Suggest and explain appropriate internal control procedure to rectify each of the weakness identified in (a).

(a) Identify FOUR (4) possible weaknesses in the EMSB's Cash Disbursement procedures. Provide an appropriate argument to support each of the weaknesses highlighted. (b) Suggest and explain appropriate internal control procedure to rectify each of the weakness identified in (a).

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter10: Accounting For Sales And Cash Receipts

Section: Chapter Questions

Problem 1SEB

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the purchases and disbursements cycle usually begins when a. a user department request for acquisition of goods or services and submits purchase requisition to the purchasing department b. a check is issued to the vendor or supplier c. the warehouse is received the goods from the vendor or supplier d. the accounting posts the purchase transaction in the accounts payable ledger
Accounts Payable and Cash Disbursement Lissa describes as follows of how she handles the cash payment to the SESB's vendors, specifically on the purchase of inventories. Upon receiving the purchase order copy, Lissa temporarily files the purchase order (by supplier name) in 'Incoming Vendor's Invoice' while waiting for the invoice to arrive from the vendor. When the vendor's invoice arrives, she takes out the respective purchase order copy that matches the vendor's invoice. The supplier invoice details are reconciled with the respective purchase order. Lissa gets into SESB's accounting system and records the vendor's invoice by keying-in the reseller's ID. A computer program then reads the vendor's master file and displays the vendor's details on screen. She then records the vendor's invoice details onto the system. A next computer program edits and checks the invoice details entered for possible data entry errors. Upon saving the transaction, the computer program records the…
The purchases and disbursements cycle usually begins when Group of answer choices A user department requests for acquisition of goods or services and submits purchase requisition to the purchasing department. A check is issued to the vendor or supplier. The warehouse received the goods from the vendor or supplier. The accounting posts the purchase transaction in the accounts payable ledger.
The following procedures are used by Complete Wholesale Incorporated.a. All sales are made on account, with each sale being indicated on a sequentially numberedsales invoice.b. Customer payments are received in the mail by the office receptionist, who sends the checksto a cashier for deposit and the remittance advices to the accounting department for recordingagainst the customer’s account balance.c. The office receptionist is assigned the job of handling all customer complaints.d. When a customer has a legitimate complaint about goods sold to the customer on account, thereceptionist will phone the accounting department to request that the customer’s account becredited for the sales allowance.e. The company’s inventory is stored in a locked warehouse that is monitored by surveillancecameras.f. Payments to the company’s suppliers are made only after the supplier’s invoice is received andcompared to the receiving report.Required:1. Indicate whether each procedure represents a strength or…
Match each document in a voucher system with its description. Document 1. Purchase requisition 2. Purchase order 3. Invoice 4. Receiving report 5. Invoice approval 6. Voucher Description A. An itemized statement of goods prepared by the vendor listing the customer’s name, items sold, sales prices, and terms of sale. B. An internal file used to store documents and information to control cash payments and to ensure that a transaction is properly authorized and recorded. C. A document used to place an order with a vendor that authorizes the vendor to ship ordered merchandise at the stated price and terms. D. A checklist of steps necessary for the approval of an invoice for recording and payment; also known as a check authorization. E. A document used by department managers to inform the purchasing department to place an order with a vendor. F. A document used to notify the appropriate persons that ordered goods have arrived, including a description of the quantities and condition of…
Describe the nature of the following documents and records andexplain their use in the sales and collection cycle: bill of lading, sales invoice, creditmemo, remittance advice, and monthly statement to customers.
The following describes the purchases and cash disbursements procedures for a lawn and garden supply wholesaler that uses central computer system terminals with in departments. The inventory control clerk visually reviews inventory levels from his computer terminal to identify items that need to be ordered. He then prints and sends a hard copy purchase requisition for the needed items to the purchasing agent. Based on the requisi- tion, the purchasing agent selects a vendor and adds a digital record to the purchase order file from terminal in the purchasing department. The clerk then prints a hard copy of the purchase order and mails it to the vendor. Finally, the purchasing agent destroys the purchase requisition, which it is no longer niceded since the relevant details are on the PO. When the materials arrive at the receiving department a receiving clerk prints a copy of the purchase order from his terminal and reconciles to the packing slip. The clerk then manually creates wo-part…
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As orders are received from customers, a personnel in the sales department prepares a sales order and sends a copy to the credit department for checking the viability of the customer's credit. A copy of the sales order is then sent to the shipping department for the preparation of the goods for delivery, the delivery receipt and the sales invoice which is then sent to the customer. A copy of the sales order, delivery receipt and the sales invoice is then sent to the accounting department for recording. What area in the transaction cycle is deemed a control weakness instead of a strength?a. The approval of the customer credit.b. The preparation of the delivery receipt.c. The preparation of the sales invoice.d. None can be deemed as a weakness.
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Match the transactions below with the journal or ledger in which it would be entered. Clear All Cash receipts journal Cash payments journal Accounts payable subsidiary ledger Record payment received from customer Record payment made to vendor Cash payment posting to an individual vendor account