Why does an expense form typically not require a payee to be listed?

• A. Because all expense forms are automatically paid to vendors without verification.
• B. Because the payee information is always included on the company's balance sheet.
• C. Because the expense form is used to document costs incurred by an employee, not to initiate a payment to a specific vendor.
• D. Because expense forms are only used for internal budgeting and not for reimbursement purposes.

Answer: (C)

Verified step by step guidance

1. Understand the purpose of an expense form: Expense forms are typically used to document costs incurred by employees during business activities, such as travel, meals, or supplies.
2. Recognize that expense forms are not payment instruments: Unlike invoices or checks, expense forms are not used to initiate payments to vendors or payees. They serve as a record of expenses for reimbursement or accounting purposes.
3. Clarify the role of payee information: Since the expense form is focused on documenting employee-incurred costs, it does not require payee information unless the expense specifically involves a vendor or third party.
4. Differentiate between expense forms and other financial documents: Payment-related documents, such as invoices or purchase orders, typically include payee details because they are directly tied to transactions with external parties.
5. Conclude that the correct answer is: 'Because the expense form is used to document costs incurred by an employee, not to initiate a payment to a specific vendor.' This aligns with the primary function of expense forms in financial accounting.