Final answer:
A cash disbursement control system includes segregation of duties, authorization and approval, and documentation and recordkeeping.
Step-by-step explanation:
A cash disbursement control system is designed to ensure that cash payments are made in a controlled and secure manner. Three important elements of such a system are:
- Segregation of duties: This involves separating the responsibilities of recording cash disbursements, approving them, and making the payments. For example, one employee might be responsible for preparing checks while another employee is responsible for signing them.
- Authorization and approval: A strong control system requires that payments are authorized and approved by the appropriate individuals. This ensures that payments are only made for legitimate expenses and within established policies.
- Documentation and recordkeeping: It is important to have complete and accurate documentation for all cash disbursements. This includes invoices, receipts, and other supporting documents. This helps to provide a clear audit trail and reduces the risk of fraud or errors.