Verify Supporting Documentation on Outstanding Checks

C

The test of verifying supporting documentation on outstanding checks written for a material amount is commonly used as a procedure in the Check Disbursement cycle. Therefore, the correct answer is A. Check disbursement.

The Check Disbursement cycle is a key process within the overall cash disbursement system of an organization. It involves the issuance of checks for the payment of expenses, vendors, and other obligations. The cycle starts with the approval of the payment request and ends with the recording of the payment in the accounting system.

As a part of the check disbursement cycle, it is important to ensure that all checks that have been issued are recorded properly in the accounting system and that the checks have been properly supported by valid documentation. One of the tests that can be used to verify this is to review the supporting documentation for all outstanding checks that have been issued for a material amount. This test helps to ensure that all checks that have been issued have been properly supported by valid documentation, and that there are no fraudulent or unauthorized checks that have been issued.

In contrast, bank confirmation and cutoff statements are tests used to verify the accuracy of the cash balance in the bank account, not the validity of outstanding checks. Bank confirmation is a procedure used to confirm the accuracy of the bank balance and transactions recorded in the accounting system, whereas cutoff statements are used to verify the accuracy of the recorded cash balance as of a certain date.

In summary, the test of verifying supporting documentation on outstanding checks written for a material amount is a procedure that is commonly used in the Check Disbursement cycle to ensure the validity of checks that have been issued. Therefore, the correct answer is A. Check disbursement.