Question

Duties in the expenditure cycle should be properly segregated to promote internal control. This means that the authorization function is performed by ________, the recording function is performed by ________, and cash handling is performed by the ________.
A) accounts payable; purchasing; cashier.
B) purchasing; accounts payable; cashier.
C) purchasing; cashier; accounts payable.
D) purchasing; accounts payable; treasurer.
What is the bestcontrol to mitigate the threat of paying prices that are too high for goods ordered?

Answer 1

Answer:

B) purchasing; accounts payable; cashier.

Explanation:

The purchasing department's role is to purchase all the necessary inputs needed for production or daily operation.

The accounts payable department's role is to control expenses, process, verify and reconcile invoices.

The cashier department's role is to receive and distribute money and funds.

The logic behind separating roles and responsibilities is that no single department can decide on what to spend, who the vendor will be and how much they should pay.