Q10RQ - Horngren'S Financial And Managerial Accounting

Question

What are the steps taken to ensure control over purchases and payments by check?

Step-by-Step Solution

Answer

Control over purchases and payments by checks includes three different steps.

Step-by-Step Solution Step 1: Definition of payments by check

Payment by checks includes those payments made with the help of the checks.

Step 2: Control over purchases and payments by check

Step 1: The check provides a record of the payment. With the help of the check, a complete record of the payment is made.

Step 2: An authorized official must sign the check. In this, the payment is not made without the signature of the authorized officials.

Step 3: Before signing the check, the official reviews the invoice or other evidence supporting

the payment.