A company has an external sales agency. The company allows the sales agency to incur and pay for all its expenses and approved asset purchases. The company has never transferred any tangible assets to the agency and created the agency by simply establishing an agency working capital fund of P40,000. Whenever the sales agency needs more working capital it transmits the receipts for what it has spent back to the main office which then sends cash back to the agency to cover the remitted items. Small amounts of merchandise inventory are sent to the agency for display and demonstration purposes. These items are transferred at cost. An operation such as the one descried above most closely resembles a
A company has an external sales agency. The company allows the sales agency to incur and pay for all its expenses and approved asset purchases. The company has never transferred any tangible assets to the agency and created the agency by simply establishing an agency
Accounts payable subsidiary ledger
Accounts receivable subsidiary ledger
Voucher system
Petty Cash system
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