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At Nunez Company, checks are not prenumbered because both the purchasing agent and the treasurer are authorized to issue checks. Each signer has access to unissued checks kept in an unlocked file cabinet. The purchasing agent pays all bills pertaining to goods purchased for resale. Prior to payment, the purchasing agent determines that the goods have been received and verifies the mathematical accuracy of the vendor's invoice. After payment, the invoice is filed by vendor name and the purchasing agent records the payment in the cash disbursements journal. The treasurer pays all other bills following approval by authorized employees.
After payment, the treasurer stamps all bills "paid," files them by payment date, and records the checks in the cash disbursements journal. Nunez Company maintains one checking account that is reconciled by the treasurer.
Financial Statement Analysis and Preparation
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Computation of Free Cash Flow
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