Control over Cash DisbursementsAll cash disbursements should be made by check/debitcard/credit card.1.2.Expenditures should be authorized before purchase andaccuracy of purchase should be verified. The person whoauthorizes should not prepare the check.Use serial numbered checks. Only authorized person(s)should sign the check.Debit/Credit card statements should be checked against3.4.purchase receipts. The person verifying the statements shouldnot be the person who made the purchases.Set limits on purchases for credit/debit cards.Separate the duties of the person responsible for makingcash disbursements from the person in charge of cash receipts.5.6.Company Cash ReceiptsRecording revenue: the company always recognizes revenue atthe agreed upon price. The amount of revenue recognized isnot impacted by the way the customer pays for the good orservice. Example: Tim purchases $100 of groceries fromPublix. Below are two examples, one where Tim pays witheither currency or a check; and the other example is if Tim payswith plastic (credit card or debit card)."CASH" SalesCash & ChecksCash (A+)100Sale (R+ à SE+)100Credit Cards & Debit CardsService fee-an expense97Cash (A+)Service fee (E+ à SE-)Sale (R+ à SE+)100Company Cash DisbursementsCash/Checks/Debit card-act like cashCredit CardsWhen the company uses a Credit Card to pay for goods or serviceit creates a liability to the company.Office supplies (A+)500Credit card payable (L+)|500 D Question 30.2 ptsFrom page 4-3 of the VLN, whichstatement is true regarding cash sales?O We always recognize the sale at the agreedupon transaction price regardless of howthe customer pays for it.O The company will record a higher saleamount if the customer pays with papercash rather than paying with a debit card.O If a customer pays with a credit card, it isnot considered a cash sale.O If a customer pays with a check, we recordthe sale as if it was on acCcount.

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Description: Control over Cash DisbursementsAll cash disbursements should be made by check/debitcard/credit card.1.2.Expenditures should be authorized before purchase andaccuracy of purchase should be verified. The person whoauthorizes should not prepare the che

Business

Accounting

From page 4-3 of the VLN, which statement is true regarding cash sales? O We always recognize the sale at the agreed upon transaction price regardless of how the customer pays for it. O The company will record a higher sale amount if the customer pays with paper cash rather than paying with a debit card. O If a customer pays with a credit card, it is not considered a cash sale. O If a customer pays with a check, we record the sale as if it was on account.

From page 4-3 of the VLN, which statement is true regarding cash sales? O We always recognize the sale at the agreed upon transaction price regardless of how the customer pays for it. O The company will record a higher sale amount if the customer pays with paper cash rather than paying with a debit card. O If a customer pays with a credit card, it is not considered a cash sale. O If a customer pays with a check, we record the sale as if it was on account.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Whether a customer uses cash, a check, or a debit card to make a purchase, the company records the transaction as a cash sale. True or False
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