Question 1

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 2

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 3

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 4

What is a key feature of materials requirements planning (MRP)?

Accepted Answer

A) minimize or entirely eliminate carrying and stockout costs 
B) reduce required inventory levels by scheduling production rather than estimating needs 
C) determine the optimal reorder point 
D) determine the optimal order size 
A) minimize or entirely eliminate carrying and stockout costs 
B) reduce required inventory levels by scheduling production rather than estimating needs 
C) determine the optimal reorder point 
D) determine the optimal order size

Question 5

Once a vendor is selected for a product,the vendor's identity is recorded in the

Accepted Answer

A) purchase requisition transaction file. 
B) purchase requisition master file. 
C) inventory transaction file. 
D) inventory master file. 
A) purchase requisition transaction file. 
B) purchase requisition master file. 
C) inventory transaction file. 
D) inventory master file.

Question 6

One of the basic activities in the expenditure cycle is the receiving and storage of goods,supplies,and services.What is the counterpart of this activity in the revenue cycle?

Accepted Answer

A) sales order entry process 
B) shipping function 
C) cash collection activity 
D) cash payments activity 
A) sales order entry process 
B) shipping function 
C) cash collection activity 
D) cash payments activity

Question 7

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 8

Although there are some similarities between JIT and MRP,identify one major difference below.

Accepted Answer

A) production scheduling 
B) reducing the opportunity for inventory theft 
C) reducing inventory carrying costs 
D) requires more analysis than EOQ 
A) production scheduling 
B) reducing the opportunity for inventory theft 
C) reducing inventory carrying costs 
D) requires more analysis than EOQ

Question 9

The disbursement voucher and supporting documents are sent to the ________ for payment prior to the due date.

Accepted Answer

A) cashier 
B) treasurer 
C) controller 
D) accounts payable department 
A) cashier 
B) treasurer 
C) controller 
D) accounts payable department

Question 10

The management at Barks-a-Million is considering a new inventory control system.The current system is inadequate because it frequently causes stockouts that interrupt production and lead to excess stock of other materials - resulting in markdowns and high carrying costs.The new system will focus on ensuring that these costs are minimized.The new inventory control system will likely employ

Accepted Answer

A) a reorder point. 
B) a just-in-time inventory system. 
C) the economic order quantity. 
D) materials requirements planning. 
A) a reorder point. 
B) a just-in-time inventory system. 
C) the economic order quantity. 
D) materials requirements planning.

Question 11

Describe the function of an imprest fund.

Accepted Answer

An imprest fund has two characteristics:

Question 12

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 13

When purchasing miscellaneous supplies,companies can reduce costs,improve efficiency,and combat employee fraud by

Accepted Answer

A) using procurement cards. 
B) implementing a JIT inventory system. 
C) requiring employees to personally purchase items then reimbursing employees at the end of each month. 
D) paying amounts out of petty cash. 
A) using procurement cards. 
B) implementing a JIT inventory system. 
C) requiring employees to personally purchase items then reimbursing employees at the end of each month. 
D) paying amounts out of petty cash.

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

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 16

The management at Barks-a-Million is considering a new inventory control system.The current system is inadequate because it frequently causes stockouts that interrupt production and lead to excess stock of other materials - resulting in markdowns and high carrying costs.The new system will focus on ensuring that orders are placed with sufficient lead time to prevent stockouts by using

Accepted Answer

A) a just-in-time inventory system. 
B) the economic order quantity. 
C) materials requirements planning. 
D) a reorder point. 
A) a just-in-time inventory system. 
B) the economic order quantity. 
C) materials requirements planning. 
D) a reorder point.

Question 17

What is the best control to mitigate the threat of paying prices that are too high for goods ordered?

Accepted Answer

A) Require the receiving department to verify the existence of a valid purchase order. 
B) Use only approved suppliers and solicit competitive bids. 
C) Only pay invoices that are supported by the original voucher package. 
D) Use bar-code technology to eliminate data entry errors. 
A) Require the receiving department to verify the existence of a valid purchase order. 
B) Use only approved suppliers and solicit competitive bids. 
C) Only pay invoices that are supported by the original voucher package. 
D) Use bar-code technology to eliminate data entry errors.

Question 18

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 19

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 20

A major cost in the purchasing function is the number of purchase orders processed.One technique that may reduce purchasing-related expenses is to have suppliers compete with each other to meet demand at the lowest price.The name of this technique is

Accepted Answer

A) an EDI auction. 
B) a trading exchange. 
C) a reverse auction. 
D) a supplier consortium. 
A) an EDI auction. 
B) a trading exchange. 
C) a reverse auction. 
D) a supplier consortium.

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

Materials requirements planning (MRP)

What is not an advantage of using disbursement vouchers?

What is a key feature of materials requirements planning (MRP)?

Once a vendor is selected for a product,the vendor's identity is recorded in the

One of the basic activities in the expenditure cycle is the receiving and storage of goods,supplies,and services.What is the counterpart of this activity in the revenue cycle?

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

Although there are some similarities between JIT and MRP,identify one major difference below.

The disbursement voucher and supporting documents are sent to the ________ for payment prior to the due date.

Describe the function of an imprest fund.

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

When purchasing miscellaneous supplies,companies can reduce costs,improve efficiency,and combat employee fraud by

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?

What is the best control to mitigate the threat of paying prices that are too high for goods ordered?

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?

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

A major cost in the purchasing function is the number of purchase orders processed.One technique that may reduce purchasing-related expenses is to have suppliers compete with each other to meet demand at the lowest price.The name of this technique is

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

Filters

Exam 13: The Expenditure Cycle: Purchasing to Cash Disbursements

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

Materials requirements planning (MRP)

What is not an advantage of using disbursement vouchers?

What is a key feature of materials requirements planning (MRP)?

Once a vendor is selected for a product,the vendor's identity is recorded in the

One of the basic activities in the expenditure cycle is the receiving and storage of goods,supplies,and services.What is the counterpart of this activity in the revenue cycle?

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

Although there are some similarities between JIT and MRP,identify one major difference below.

The disbursement voucher and supporting documents are sent to the ________ for payment prior to the due date.

Describe the function of an imprest fund.

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

When purchasing miscellaneous supplies,companies can reduce costs,improve efficiency,and combat employee fraud by

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?

What is the best control to mitigate the threat of paying prices that are too high for goods ordered?

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?

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

A major cost in the purchasing function is the number of purchase orders processed.One technique that may reduce purchasing-related expenses is to have suppliers compete with each other to meet demand at the lowest price.The name of this technique is

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

Filters