Question 1

Most companies conduct business transactions with checks so that a written record is established for cash disbursements.

Accepted Answer

A) True 
 B)False

Question 2

Only the purchasing department should authorize the processing of a cash disbursement transaction.

Accepted Answer

A) True 
 B)False

Question 3

This document, prepared by the vendor, is intended to show the quantities and descriptions of items included in the shipment.

Accepted Answer

A) Packing slip 
B) Sales invoice 
C) Bill of lading 
D) Purchase order 
A) Packing slip 
B) Sales invoice 
C) Bill of lading 
D) Purchase order

Question 4

Independent reconciliation of the accounts payable subsidiary ledger to the general ledger control account will help to assure that all inventory has been properly recorded.

Accepted Answer

A) True 
 B)False

Question 5

The document that identifies the items being returned, along with the relevant information regarding the vendor, quantity and price, is called:

Accepted Answer

A) Credit memo 
B) Receiving report 
C) Purchase requisition 
D) Debit memo 
A) Credit memo 
B) Receiving report 
C) Purchase requisition 
D) Debit memo

Question 6

Which department is generally responsible for the notification of the need to make cash disbursements and the maintenance of vendor accounts?

Accepted Answer

A) Accounting department 
B) Purchasing department 
C) Accounts payable department 
D) Shipping department 
A) Accounting department 
B) Purchasing department 
C) Accounts payable department 
D) Shipping department

Question 7

A chronological listing of all payments is referred to as an):

Accepted Answer

A) Remittance Advice 
B) Cash Disbursements Journal 
C) Accounts Payable Ledger 
D) Purchases Journal 
A) Remittance Advice 
B) Cash Disbursements Journal 
C) Accounts Payable Ledger 
D) Purchases Journal

Question 8

The policies and procedures that employees follow when completing the purchase of goods or materials, capturing vendor data and purchase quantities, and routing the resulting purchasing documents to the proper departments within the company are called:

Accepted Answer

A) Systems 
B) Processes 
C) Activities 
D) Requisitions 
A) Systems 
B) Processes 
C) Activities 
D) Requisitions

Question 9

In a system of proper internal controls, the same employee should not be allowed to:

Accepted Answer

A) Sign checks and cancel the supporting voucher package. 
B) Receive goods and prepare the related receiving report. 
C) Prepare voucher packages and sign checks. 
D) Initiate purchase requisitions and inspect goods received. 
A) Sign checks and cancel the supporting voucher package. 
B) Receive goods and prepare the related receiving report. 
C) Prepare voucher packages and sign checks. 
D) Initiate purchase requisitions and inspect goods received.

Question 10

It is important that documentation support or agree with an invoice before payment is approved and a check is issued.Which documents should be matched to make sure that the invoice received relates to a valid order that was placed and that the goods were received?

Accepted Answer

A) Purchase requisition, purchase order, and receiving report. 
B) Purchase order, receiving log, and invoice. 
C) Purchase requisition, receiving report, and statement. 
D) Purchase order, receiving report, and invoice. 
A) Purchase requisition, purchase order, and receiving report. 
B) Purchase order, receiving log, and invoice. 
C) Purchase requisition, receiving report, and statement. 
D) Purchase order, receiving report, and invoice.

Question 11

A user who logs in to the computer-based accounting system to enter invoices should also have access to the portion of the system that would allow her / him to order goods.

Accepted Answer

A) True 
 B)False

Question 12

For proper segregation of duties in cash disbursements, the person who signs checks also:

Accepted Answer

A) Reviews the monthly bank reconciliation. 
B) Returns the checks to accounts payable. 
C) Is denied access to the supporting documents. 
D) Is responsible for mailing the checks. 
A) Reviews the monthly bank reconciliation. 
B) Returns the checks to accounts payable. 
C) Is denied access to the supporting documents. 
D) Is responsible for mailing the checks.

Question 13

The last event to occur in the purchase return process is:

Accepted Answer

A) Update general ledger 
B) Return goods to vendor 
C) Authorization to return goods 
D) Update inventory records 
A) Update general ledger 
B) Return goods to vendor 
C) Authorization to return goods 
D) Update inventory records

Question 14

Which of the following must a company have in place to capture, record, summarize and report transactions?

Accepted Answer

A) Systems and processes 
B) systems and activities 
C) processes and requisitions 
D) activities and requisitions 
A) Systems and processes 
B) systems and activities 
C) processes and requisitions 
D) activities and requisitions

Question 15

Within the purchases processes, which of the following is the first document prepared and thereby the one that triggers the remaining purchasing processes?

Accepted Answer

A) The invoice 
B) The receiving report 
C) The purchase order 
D) The purchase requisition 
A) The invoice 
B) The receiving report 
C) The purchase order 
D) The purchase requisition

Question 16

Which of the following is not an independent verification related to cash disbursements?

Accepted Answer

A) The cash disbursements journal is reconciled to the general ledger. 
B) The stock of unused checks should be adequately secured and controlled. 
C) The bank statement is reconciled on a monthly basis. 
D) The accounts payable subsidiary ledger is reconciled to the general ledger. 
A) The cash disbursements journal is reconciled to the general ledger. 
B) The stock of unused checks should be adequately secured and controlled. 
C) The bank statement is reconciled on a monthly basis. 
D) The accounts payable subsidiary ledger is reconciled to the general ledger.

Question 17

A manager suspects that certain employees are ordering merchandise for themselves over the Internet without recording the purchase or receipt of the merchandise.When vendors' invoices arrive, one of the employees approves the invoices for payment.After the invoices are paid, the employee destroys the invoices and related vouchers.To trace whether this is actually happening, it would be best to begin tracing from the:

Accepted Answer

A) Cash disbursements. 
B) Approved vouchers. 
C) Receiving reports. 
D) Vendors' invoices. 
A) Cash disbursements. 
B) Approved vouchers. 
C) Receiving reports. 
D) Vendors' invoices.

Question 18

The security and confidentiality risks of computer based matching would include:

Accepted Answer

A) Unauthorized access to the system's ordering and matching functions would allow the insertion of fictitious vendors and / or invoices. 
B) Errors in system logic can cause systematic and repetitive errors in matching. 
C) The criteria used to identify duplicate payments may be too tightly defined and will overlook duplicate payments. 
D) System breakdowns or interruptions can stop or slow the processing of invoices and payments. 
A) Unauthorized access to the system's ordering and matching functions would allow the insertion of fictitious vendors and / or invoices. 
B) Errors in system logic can cause systematic and repetitive errors in matching. 
C) The criteria used to identify duplicate payments may be too tightly defined and will overlook duplicate payments. 
D) System breakdowns or interruptions can stop or slow the processing of invoices and payments.

Question 19

The textbook referred to the three primary categories of processes in the typical purchasing system.Which of the following in not one of those categories?

Accepted Answer

A) Purchase Processes 
B) Cash Disbursement Processes 
C) Receiving Processes 
D) Purchase Return Processes 
A) Purchase Processes 
B) Cash Disbursement Processes 
C) Receiving Processes 
D) Purchase Return Processes

Question 20

Which of the following internal controls wold help prevent overpayment to a vendor or duplicate payment to a vendor?

Accepted Answer

A) Review and cancellation of supporting documents after issuing payment. 
B) Requiring the check signer to mail the payment to the vendor 
C) Review of the accounts where the expenditure transaction has been recorded 
D) Approving the purchase before the goods are ordered from the vendor 
A) Review and cancellation of supporting documents after issuing payment. 
B) Requiring the check signer to mail the payment to the vendor 
C) Review of the accounts where the expenditure transaction has been recorded 
D) Approving the purchase before the goods are ordered from the vendor

Most companies conduct business transactions with checks so that a written record is established for cash disbursements.

Only the purchasing department should authorize the processing of a cash disbursement transaction.

This document, prepared by the vendor, is intended to show the quantities and descriptions of items included in the shipment.

Independent reconciliation of the accounts payable subsidiary ledger to the general ledger control account will help to assure that all inventory has been properly recorded.

The document that identifies the items being returned, along with the relevant information regarding the vendor, quantity and price, is called:

Which department is generally responsible for the notification of the need to make cash disbursements and the maintenance of vendor accounts?

A chronological listing of all payments is referred to as an):

The policies and procedures that employees follow when completing the purchase of goods or materials, capturing vendor data and purchase quantities, and routing the resulting purchasing documents to the proper departments within the company are called:

In a system of proper internal controls, the same employee should not be allowed to:

It is important that documentation support or agree with an invoice before payment is approved and a check is issued.Which documents should be matched to make sure that the invoice received relates to a valid order that was placed and that the goods were received?

A user who logs in to the computer-based accounting system to enter invoices should also have access to the portion of the system that would allow her / him to order goods.

For proper segregation of duties in cash disbursements, the person who signs checks also:

The last event to occur in the purchase return process is:

Which of the following must a company have in place to capture, record, summarize and report transactions?

Within the purchases processes, which of the following is the first document prepared and thereby the one that triggers the remaining purchasing processes?

Which of the following is not an independent verification related to cash disbursements?

The security and confidentiality risks of computer based matching would include:

The textbook referred to the three primary categories of processes in the typical purchasing system.Which of the following in not one of those categories?

Which of the following internal controls wold help prevent overpayment to a vendor or duplicate payment to a vendor?

Introduction to AIS

Foundational Concepts of the AIS

Fraud, Ethics, and Internal Control

Internal Controls and Risks in IT Systems

IT Governance

Erp Systems

Auditing Information Technology Bases Processes

Revenue and Cash Collection Processes

Expenditures Processes and Controls Payroll and Fixed Assets

Conversion Processes and Controls

Administrative Processes and Controls

Data and Databases

Ecommerce and Ebusiness

Filters

Exam 9: Expenditures Processes and Controls - Purchases

Most companies conduct business transactions with checks so that a written record is established for cash disbursements.

Only the purchasing department should authorize the processing of a cash disbursement transaction.

This document, prepared by the vendor, is intended to show the quantities and descriptions of items included in the shipment.

Independent reconciliation of the accounts payable subsidiary ledger to the general ledger control account will help to assure that all inventory has been properly recorded.

The document that identifies the items being returned, along with the relevant information regarding the vendor, quantity and price, is called:

Which department is generally responsible for the notification of the need to make cash disbursements and the maintenance of vendor accounts?

A chronological listing of all payments is referred to as an):

The policies and procedures that employees follow when completing the purchase of goods or materials, capturing vendor data and purchase quantities, and routing the resulting purchasing documents to the proper departments within the company are called:

In a system of proper internal controls, the same employee should not be allowed to:

It is important that documentation support or agree with an invoice before payment is approved and a check is issued.Which documents should be matched to make sure that the invoice received relates to a valid order that was placed and that the goods were received?

A user who logs in to the computer-based accounting system to enter invoices should also have access to the portion of the system that would allow her / him to order goods.

For proper segregation of duties in cash disbursements, the person who signs checks also:

The last event to occur in the purchase return process is:

Which of the following must a company have in place to capture, record, summarize and report transactions?

Within the purchases processes, which of the following is the first document prepared and thereby the one that triggers the remaining purchasing processes?

Which of the following is not an independent verification related to cash disbursements?

The security and confidentiality risks of computer based matching would include:

The textbook referred to the three primary categories of processes in the typical purchasing system.Which of the following in not one of those categories?

Which of the following internal controls wold help prevent overpayment to a vendor or duplicate payment to a vendor?

Introduction to AIS

Foundational Concepts of the AIS

Fraud, Ethics, and Internal Control

Internal Controls and Risks in IT Systems

IT Governance

Erp Systems

Auditing Information Technology Bases Processes

Revenue and Cash Collection Processes

Expenditures Processes and Controls Payroll and Fixed Assets

Conversion Processes and Controls

Administrative Processes and Controls

Data and Databases

Ecommerce and Ebusiness

Filters