Question 1

Which control would best prevent payments made to fictitious vendors?

Accepted Answer

A) Allow payments only to approved vendors. 
B) Restrict access to any payment or approval documents. 
C) Have an independent bank reconciliation. 
D) Make sure all documents are in order before approving payments. 
A) Allow payments only to approved vendors. 
B) Restrict access to any payment or approval documents. 
C) Have an independent bank reconciliation. 
D) Make sure all documents are in order before approving payments.

Question 2

The receiving clerk at Wattana Technologies examines incoming shipments and checks their purchase order numbers.A receiving report is then sent to accounts payable,where it is reconciled with the relevant purchase orders and invoices and payment is authorized.Which of the following would correct control weaknesses related to the clerk's activities?

Accepted Answer

A) Controls are adequate under the current system. 
B) Vendor invoices should be approved for payment by the purchasing manager. 
C) Purchase orders and receiving reports should be reconciled by the purchasing manager. 
D) Vendor invoices should be approved for payment by the shipping clerk after the purchase order and receiving report are reconciled. 
A) Controls are adequate under the current system. 
B) Vendor invoices should be approved for payment by the purchasing manager. 
C) Purchase orders and receiving reports should be reconciled by the purchasing manager. 
D) Vendor invoices should be approved for payment by the shipping clerk after the purchase order and receiving report are reconciled.

Question 3

In the expenditure cycle,Financial Electronic Data Interchange (FEDI)increases efficiency by

Accepted Answer

A) eliminating the need for receiving reports. 
B) eliminating the need for vendor invoices. 
C) eliminating the need for purchase orders. 
D) eliminating the need to prepare and mail checks. 
A) eliminating the need for receiving reports. 
B) eliminating the need for vendor invoices. 
C) eliminating the need for purchase orders. 
D) eliminating the need to prepare and mail checks.

Question 4

The EOQ approach to managing inventory has been gaining popularity in recent years.

Accepted Answer

A) True 
 B)False

Question 5

Identify possible problems associated with receiving goods and appropriate actions in response to the problems.

Accepted Answer

When a shipment of goods arrives,the qua

Question 6

Identify one way to improve the accuracy of inventory records that use a perpetual inventory approach

Accepted Answer

A) use of an ERP system 
B) require the accounting department to calculate cost of goods sold periodically 
C) use IT to eliminate the need for manual data entry 
D) use of an MRP inventory system 
A) use of an ERP system 
B) require the accounting department to calculate cost of goods sold periodically 
C) use IT to eliminate the need for manual data entry 
D) use of an MRP inventory system

Question 7

Evaluated receipt settlement increases efficiency by

Accepted Answer

A) eliminating the need for receiving reports. 
B) eliminating the need for vendor invoices. 
C) eliminating the need for purchase orders. 
D) eliminating the need to prepare and mail checks. 
A) eliminating the need for receiving reports. 
B) eliminating the need for vendor invoices. 
C) eliminating the need for purchase orders. 
D) eliminating the need to prepare and mail checks.

Question 8

Which of the following controls can minimize the threat of stockouts and excess inventory?

Accepted Answer

A) The use of positive pay. 
B) Do not inform receiving employees about quantity ordered. 
C) The use of ERS. 
D) Perpetual inventory system. 
A) The use of positive pay. 
B) Do not inform receiving employees about quantity ordered. 
C) The use of ERS. 
D) Perpetual inventory system.

Question 9

Describe the function of an imprest fund.

Accepted Answer

An imprest fund has two characteristics:

Question 10

Under what conditions is MRP more suitable than JIT and vice versa?

Accepted Answer

MRP systems schedule production based on

Question 11

The Gwallter Reece Chihuahua Sweater Co.(GRCCo)was established in 2013.It recently signed a large contract with PetCo pet stores.GRCCo will be required to track and forecast sweater sales.The technology that is used for communication between GRCCo and PetCo is

Accepted Answer

A) electronic data interchange. 
B) vendor-managed inventory. 
C) sales force automation. 
D) optical character recognition. 
A) electronic data interchange. 
B) vendor-managed inventory. 
C) sales force automation. 
D) optical character recognition.

Question 12

Which of the following controls can minimize the threat of mistakes in counting incoming inventory?

Accepted Answer

A) The use of positive pay. 
B) Do not inform receiving employees about quantity ordered. 
C) The use of ERS. 
D) Perpetual inventory system. 
A) The use of positive pay. 
B) Do not inform receiving employees about quantity ordered. 
C) The use of ERS. 
D) Perpetual inventory system.

Question 13

It is important to physically count inventory,at least periodically,even in a perpetual inventory system.

Accepted Answer

A) True 
 B)False

Question 14

Ngai Nhung is the sales manager at Hung Technologies.At lunch with the company CEO,Ngai complained that a recent shipment from a vendor had been unsatisfactory and was returned.As a result,Hung's purchasing manager needed to send a ________ to the supplier.

Accepted Answer

A) debit memo 
B) purchase order 
C) blanket purchase order 
D) receiving report 
A) debit memo 
B) purchase order 
C) blanket purchase order 
D) receiving report

Question 15

Ngai Nhung is the sales manager at Hung Technologies.At lunch with the company CEO,Ngai proudly announced that he had received a ________ from a client.The client had just requested a large quantity of components from Hung.

Accepted Answer

A) blanket purchase order 
B) voucher 
C) purchase order 
D) purchase requisition 
A) blanket purchase order 
B) voucher 
C) purchase order 
D) purchase requisition

Question 16

What is the main reason a list of potential alternative suppliers be maintained?

Accepted Answer

A) in case the primary supplier is out of stock 
B) so the firm can sample different suppliers 
C) in case the primary supplier is more expensive 
D) to segregate purchasing suppliers 
A) in case the primary supplier is out of stock 
B) so the firm can sample different suppliers 
C) in case the primary supplier is more expensive 
D) to segregate purchasing suppliers

Question 17

Which of the following would be the best control to prevent receiving department employees from stealing inventory and claiming the ordered quantity wasn't received from the vendor?

Accepted Answer

A) Reconcile quantity on packing slip to physical count when accepting delivery. 
B) Restrict physical access to the receiving area. 
C) Require all deliveries be made at the receiving area. 
D) Require dual signatures on the move ticket when receiving delivers the inventory to the warehouse. 
A) Reconcile quantity on packing slip to physical count when accepting delivery. 
B) Restrict physical access to the receiving area. 
C) Require all deliveries be made at the receiving area. 
D) Require dual signatures on the move ticket when receiving delivers the inventory to the warehouse.

Question 18

Evaluated receipt settlement approves payment of vendor invoices after reconciling the purchase order and the

Accepted Answer

A) receiving report. 
B) vendor invoice. 
C) sales invoice. 
D) disbursement voucher. 
A) receiving report. 
B) vendor invoice. 
C) sales invoice. 
D) disbursement voucher.

Question 19

If available,a 1% discount for payment within 10 days instead of 30 days represents an approximate savings of ________% annually.

Accepted Answer

A) 1 
B) 12 
C) 18 
D) 36 
A) 1 
B) 12 
C) 18 
D) 36

Question 20

Which of the following is least likely to be a major criterion in vendor selection?

Accepted Answer

A) prices of goods 
B) credit rating of the vendor 
C) quality of goods 
D) ability to deliver on time 
A) prices of goods 
B) credit rating of the vendor 
C) quality of goods 
D) ability to deliver on time

Exam 13: The Expenditure Cycle: Purchasing to Cash Disbursements

Which control would best prevent payments made to fictitious vendors?

In the expenditure cycle,Financial Electronic Data Interchange (FEDI)increases efficiency by

The EOQ approach to managing inventory has been gaining popularity in recent years.

Identify possible problems associated with receiving goods and appropriate actions in response to the problems.

Identify one way to improve the accuracy of inventory records that use a perpetual inventory approach

Evaluated receipt settlement increases efficiency by

Which of the following controls can minimize the threat of stockouts and excess inventory?

Describe the function of an imprest fund.

Under what conditions is MRP more suitable than JIT and vice versa?

The Gwallter Reece Chihuahua Sweater Co.(GRCCo)was established in 2013.It recently signed a large contract with PetCo pet stores.GRCCo will be required to track and forecast sweater sales.The technology that is used for communication between GRCCo and PetCo is

Which of the following controls can minimize the threat of mistakes in counting incoming inventory?

It is important to physically count inventory,at least periodically,even in a perpetual inventory system.

Ngai Nhung is the sales manager at Hung Technologies.At lunch with the company CEO,Ngai complained that a recent shipment from a vendor had been unsatisfactory and was returned.As a result,Hung's purchasing manager needed to send a ________ to the supplier.

Ngai Nhung is the sales manager at Hung Technologies.At lunch with the company CEO,Ngai proudly announced that he had received a ________ from a client.The client had just requested a large quantity of components from Hung.

What is the main reason a list of potential alternative suppliers be maintained?

Which of the following would be the best control to prevent receiving department employees from stealing inventory and claiming the ordered quantity wasn't received from the vendor?

Evaluated receipt settlement approves payment of vendor invoices after reconciling the purchase order and the

If available,a 1% discount for payment within 10 days instead of 30 days represents an approximate savings of ________% annually.

Which of the following is least likely to be a major criterion in vendor selection?

Conceptual Foundations of Accounting Information Systems

Overview of Transaction Processing and Enterprise Resource Planning Systems

Systems Documentation Techniques

Relational Databases

Computer Fraud

Computer Fraud and Abuse Techniques

Control and Accounting Information Systems

Controls for Information Security

Confidentiality and Privacy Controls

Processing Integrity and Availability Controls

Auditing Computer-Based Information Systems

The Revenue Cycle: Sales to Cash Collections

The Production Cycle

The Human Resources Management and Payroll Cycle

General Ledger and Reporting System

Database Design Using the Rea Data Model

Implementing an Rea Model in a Relational Database

Special Topics in Rea Modeling

Introduction to Systems Development and Systems Analysis

Ais Development Strategies

Systems Design, implementation, and Operation

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