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Financial & Managerial Accounting
Found in: Page 305
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

A good system of internal control for cash provides adequate procedures for protecting both cash receipts and cash disbursements. Identify each of the following statements as either true or false regarding this protection.

b. A voucher system of control is a control system exclusively for cash receipts.

Answer

The statement is a false statement.

See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1: Meaning of Voucher System

A voucher system is a system of accounting in which a voucher is prepared usually with the help of supporting documents attached for every transaction affecting a single account. After approval, it is entered into a voucher register.

Step 2: Explanation of the above statement

False

Documents prepared under the voucher system do not only consist of cash receipts. It also includes purchase requisitions and purchase orders, invoice approval, invoice voucher, etc.

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