Which of the following is a form of invoice verification in the context of journal entries and accounting records?

• A. Matching the invoice to the purchase order and receiving report before recording the transaction
• B. Ignoring the invoice until payment is made
• C. Posting the invoice amount to the owner's equity account
• D. Recording the invoice directly as a credit to cash

Answer: (A)

Verified step by step guidance

1. Understand the concept of invoice verification: Invoice verification is a process in accounting where the invoice is checked against other documents, such as the purchase order and receiving report, to ensure accuracy before recording the transaction.
2. Analyze the options provided: Each option represents a different approach to handling invoices in accounting. Evaluate each option based on the principles of proper accounting practices.
3. Option 1: Matching the invoice to the purchase order and receiving report before recording the transaction. This is a standard practice in accounting to ensure that the invoice corresponds to the goods or services received and the agreed-upon terms in the purchase order.
4. Option 2: Ignoring the invoice until payment is made. This is not a recommended practice as it can lead to errors in financial records and a lack of proper tracking of liabilities.
5. Option 3: Posting the invoice amount to the owner's equity account or recording the invoice directly as a credit to cash. These actions are incorrect because invoices typically represent liabilities (accounts payable) and should not directly affect owner's equity or cash accounts without proper verification and payment processing.