Payments recorded in the wrong vendor account may result in duplicate payments to vendors. Choose the best control activity to address this risk.
A) Comparison of the total of the authorized vouchers submitted for payment to the total in the cash disbursements journal for a specific period
B) A three-way match against the purchase order, receiving report, and vendor's invoice
C) Comparison of vendor ID in cash payments journal with vendor ID on supporting documentation and payments voucher
D) Take advantage of all supplier discounts if favorable to the company.

Question

Quizplus · Accepted Answer

A three-way match is a good control for ensuring that payments are for received goods and are authorized, but it doesn't directly address the risk of recording payments in the wrong vendor account. Comparing the vendor ID in the cash payments journal with the vendor ID on supporting documentation and payment vouchers (Choice C) directly addresses the risk of misposting payments to the wrong vendor account by ensuring that each payment is matched to the correct vendor's documentation.

Payments Recorded in the Wrong Vendor Account May Result in Duplicate