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Accounting At Your Fingertips, 2e by George Murray, CPA.

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6.4 Cash Disbursements

Timing of Payments

Employing Internal Controls

The Voucher System

The Cash Disbursements Journal

In this subchapter, we examine the cash disbursements cycle and look at procedures to help ensure cash is safeguarded and transactions are properly recorded.

Timing of Payments

Careful records must be kept of billing and account payment information so payments are made in a timely manner. Most companies make it a policy of paying early to get the discount, as forfeiting it adds additional costs to the purchase.

SEE ALSO 4.2, “Adjusting and Summarizing Sales”

To keep on top of payments and see how well you’re meeting obligations, prepare an A/P aging schedule, which enables you to break down individual accounts by due dates. ...

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