Question 1

Materials requirements planning (MRP)

Accepted Answer

A) reduces the uncertainty about when materials are needed,thereby reducing the need to carry large levels of inventory. 
B) is able to compute exactly the cost of purchasing by taking into account all costs associated with inventory carrying. 
C) requires vendors to deliver inventory to the production site exactly when needed and in the correct quantities. 
D) None of the above is correct. 
A) reduces the uncertainty about when materials are needed,thereby reducing the need to carry large levels of inventory. 
B) is able to compute exactly the cost of purchasing by taking into account all costs associated with inventory carrying. 
C) requires vendors to deliver inventory to the production site exactly when needed and in the correct quantities. 
D) None of the above is correct.

Question 2

Comparing quantities on a vendor invoice to quantities on the receiving report would not prevent or detect which of the following situations?

Accepted Answer

A) receiving and accepting inventory not ordered 
B) theft of inventory by receiving department employees 
C) update of wrong inventory items due to data entry error 
D) order for an excessive quantity of inventory 
A) receiving and accepting inventory not ordered 
B) theft of inventory by receiving department employees 
C) update of wrong inventory items due to data entry error 
D) order for an excessive quantity of inventory

Question 3

Which of the following controls can minimize the threat of errors in supplier invoices?

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 4

What control would best mitigate the threat of paying an invoice twice?

Accepted Answer

A) never authorizing payment of a photocopy of an invoice 
B) double-checking mathematical accuracy of invoices 
C) approval of purchase orders 
D) maintaining adequate perpetual inventory records 
A) never authorizing payment of a photocopy of an invoice 
B) double-checking mathematical accuracy of invoices 
C) approval of purchase orders 
D) maintaining adequate perpetual inventory records

Question 5

Which of the following is generally not shown on a receiving report?

Accepted Answer

A) price of the items 
B) quantity of the items 
C) purchase order number 
D) counted and inspected by 
A) price of the items 
B) quantity of the items 
C) purchase order number 
D) counted and inspected by

Question 6

In a supplier audit,what are some of the red flags that could indicate potential supplier's problems?

Accepted Answer

(1)A large percentage of the supplier's

Question 7

One way a firm could reduce the risk of problems with supplier dependability is to

Accepted Answer

A) purchase inventory from only U.S.-based suppliers. 
B) use an ERP system for purchases. 
C) require suppliers to be ISO 9000 certified. 
D) automate the purchasing function. 
A) purchase inventory from only U.S.-based suppliers. 
B) use an ERP system for purchases. 
C) require suppliers to be ISO 9000 certified. 
D) automate the purchasing function.

Question 8

Restricting access to the approved supplier list can

Accepted Answer

A) help reduce the risk of fraudulent disbursements. 
B) cause purchase order approval delays. 
C) eliminate the risk of duplicate payment. 
D) improve the efficiency of the expenditure cycle. 
A) help reduce the risk of fraudulent disbursements. 
B) cause purchase order approval delays. 
C) eliminate the risk of duplicate payment. 
D) improve the efficiency of the expenditure cycle.

Question 9

How can information technology be used to improve the vendor invoice approval process?

Accepted Answer

EDI eliminates the need to enter invoice

Question 10

Which of the following controls would be the least effective in preventing paying the same invoice twice?

Accepted Answer

A) Only pay from original invoices. 
B) Cancel each document in the voucher package once the check is prepared and mailed. 
C) Only pay vendor invoices that have been matched and reconciled to a purchase order and a receiving report. 
D) Allow only the accounts payable department to authorize payment for vendor invoices and allow only the cash disbursements department to cut and mail checks to vendors. 
A) Only pay from original invoices. 
B) Cancel each document in the voucher package once the check is prepared and mailed. 
C) Only pay vendor invoices that have been matched and reconciled to a purchase order and a receiving report. 
D) Allow only the accounts payable department to authorize payment for vendor invoices and allow only the cash disbursements department to cut and mail checks to vendors.

Question 11

What is not an advantage of using disbursement vouchers?

Accepted Answer

A) Disbursement vouchers reduce the number of checks written. 
B) Disbursement vouchers can be prenumbered which simplifies the tracking of all payables. 
C) Disbursement vouchers facilitate separating the time of invoice approval from the time of invoice payment. 
D) There are no disadvantages to using disbursement vouchers. 
A) Disbursement vouchers reduce the number of checks written. 
B) Disbursement vouchers can be prenumbered which simplifies the tracking of all payables. 
C) Disbursement vouchers facilitate separating the time of invoice approval from the time of invoice payment. 
D) There are no disadvantages to using disbursement vouchers.

Question 12

Which of the following is not an advantage of a voucher system?

Accepted Answer

A) Several invoices may be included on one voucher,reducing the number of checks. 
B) Disbursement vouchers may be pre-numbered and tracked through the system. 
C) The time of voucher approval and payment can be kept separate. 
D) It is a less expensive and easier system to administer than other systems. 
A) Several invoices may be included on one voucher,reducing the number of checks. 
B) Disbursement vouchers may be pre-numbered and tracked through the system. 
C) The time of voucher approval and payment can be kept separate. 
D) It is a less expensive and easier system to administer than other systems.

Question 13

Which of the following factors is not of key importance when selecting inventory suppliers?

Accepted Answer

A) product price 
B) vendor corporate structure 
C) product quality 
D) vendor delivery dependability 
A) product price 
B) vendor corporate structure 
C) product quality 
D) vendor delivery dependability

Question 14

Anong Mali is the purchasing manager at Wattana Technologies.She has responsibility for reviewing and authorizing purchase orders.She also reviews receiving reports,approves or corrects them,and authorizes the cashier to pay vendor invoices.Which of the following would correct control weaknesses related to these activities?

Accepted Answer

A) Controls are adequate under the current system. 
B) Vendor invoices should be reviewed by accounts receivable and then cancelled when paid. 
C) Vendor invoices should be reviewed by the purchasing manager to ensure that they are correct. 
D) Accounts payable should reconcile purchase orders,receiving reports,and invoices. 
A) Controls are adequate under the current system. 
B) Vendor invoices should be reviewed by accounts receivable and then cancelled when paid. 
C) Vendor invoices should be reviewed by the purchasing manager to ensure that they are correct. 
D) Accounts payable should reconcile purchase orders,receiving reports,and invoices.

Question 15

The ________ specifies the point at which inventory is needed.

Accepted Answer

A) company inventory policies 
B) reorder point 
C) economic order quantity 
D) stockout point 
A) company inventory policies 
B) reorder point 
C) economic order quantity 
D) stockout point

Question 16

In the expenditure cycle,the majority of payments made are by check.What are some control issues related to payment of vendors by check?

Accepted Answer

Key control problems in the area of paym

Question 17

Requiring all packing slips be reconciled to purchase orders before accepting a delivery of inventory would be most likely to prevent which of the following situations?

Accepted Answer

A) A supplier delivers more inventory than ordered at the end of the year and sends an invoice for the total quantity delivered. 
B) An employee mails a fake invoice to the company,which is then paid. 
C) The inventory records are incorrectly updated when a receiving department employee enters the wrong product number on the receiving report. 
D) Receiving department employees steal inventory and then claim the inventory was received and delivered to the warehouse. 
A) A supplier delivers more inventory than ordered at the end of the year and sends an invoice for the total quantity delivered. 
B) An employee mails a fake invoice to the company,which is then paid. 
C) The inventory records are incorrectly updated when a receiving department employee enters the wrong product number on the receiving report. 
D) Receiving department employees steal inventory and then claim the inventory was received and delivered to the warehouse.

Question 18

A receiving clerk notes that a delivery of 10 units has been received,but the purchase order specified 12 units.A debit memo will need to be prepared to adjust for the difference between the quantity ordered and received.Who should prepare this document?

Accepted Answer

A) the receiving clerk 
B) the controller 
C) the vendor 
D) the purchasing department manager 
A) the receiving clerk 
B) the controller 
C) the vendor 
D) the purchasing department manager

Question 19

Why would a firm perform ABC cost analysis?

Accepted Answer

A) to identify the best inventory supplier 
B) to reconcile accounts payable 
C) to prioritize physical inventory counts 
D) to verify production quality 
A) to identify the best inventory supplier 
B) to reconcile accounts payable 
C) to prioritize physical inventory counts 
D) to verify production quality

Question 20

Ideally,inventory purchases occur in response to ________ in a JIT inventory system.

Accepted Answer

A) customer demand 
B) optimal demand 
C) forecast demand 
D) supplier demand 
A) customer demand 
B) optimal demand 
C) forecast demand 
D) supplier demand

Exam 13: The Expenditure Cycle: Purchasing to Cash Disbursements

Materials requirements planning (MRP)

Comparing quantities on a vendor invoice to quantities on the receiving report would not prevent or detect which of the following situations?

Which of the following controls can minimize the threat of errors in supplier invoices?

What control would best mitigate the threat of paying an invoice twice?

Which of the following is generally not shown on a receiving report?

In a supplier audit,what are some of the red flags that could indicate potential supplier's problems?

One way a firm could reduce the risk of problems with supplier dependability is to

Restricting access to the approved supplier list can

How can information technology be used to improve the vendor invoice approval process?

Which of the following controls would be the least effective in preventing paying the same invoice twice?

What is not an advantage of using disbursement vouchers?

Which of the following is not an advantage of a voucher system?

Which of the following factors is not of key importance when selecting inventory suppliers?

The ________ specifies the point at which inventory is needed.

In the expenditure cycle,the majority of payments made are by check.What are some control issues related to payment of vendors by check?

Requiring all packing slips be reconciled to purchase orders before accepting a delivery of inventory would be most likely to prevent which of the following situations?

A receiving clerk notes that a delivery of 10 units has been received,but the purchase order specified 12 units.A debit memo will need to be prepared to adjust for the difference between the quantity ordered and received.Who should prepare this document?

Why would a firm perform ABC cost analysis?

Ideally,inventory purchases occur in response to ________ in a JIT inventory system.

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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