Exam 13: The Expenditure Cycle: Purchasing to Cash Disbursements

a)What is the major cost driver in the purchasing function? b)Describe how information technology can be used to control this cost driver.

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Question 1

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a)The major cost driver in the purchasing function is the number of purchase orders processed.
b)The number of purchase orders can be reduced or streamlined by: Electronic data interchange (EDI)for transmitting purchase orders to vendors.Use procurement cards for small dollar and small quantity purchases of non-inventory items.Reduce clerical costs by using the Internet to perform certain purchasing functions.Use vendor-managed inventory programs to reduce purchasing and inventory costs.Implement reverse auctions and pre-award audits.

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 reducing or completely eliminating carrying costs,most likely employing

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Question 2

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An important control that can be used to reduce the risk of employee kickbacks is

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Question 3

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Which control would best prevent payments made to fictitious vendors?

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Question 4

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

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Question 5

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

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Question 6

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,which will focus on forecasting demand for Sad Clown's products,will likely employ

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Question 7

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

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Question 8

Ngai Nhung is the sales manager at Hung Technologies.At lunch with the company CEO,Ngai proudly announced that he had negotiated a(n)________ with a client that represented the customer's long-term commitment to buy components from Hung.

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Question 9

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?

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Question 10

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

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Question 11

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

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Question 12

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

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Question 13

Explain what is meant by the expenditure cycle as a "mirror image" of the revenue cycle.

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Question 14

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.

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Question 15

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?

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Question 16

The first major business activity in the expenditure cycle is

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Question 17

One objective of accounts payable is to authorize payment only for goods or services actually ordered and received.The best way to process supplier invoices is to use

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Question 18

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

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Question 19

Economic Order Quantity (EOQ)includes several variables that must be taken into consideration when calculating the optimal order size.One variable,the costs associated with holding inventory,is referred to as

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Question 20

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a)What is the major cost driver in the purchasing function? b)Describe how information technology can be used to control this cost driver.

An important control that can be used to reduce the risk of employee kickbacks is

Which control would best prevent payments made to fictitious vendors?

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

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

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

Ngai Nhung is the sales manager at Hung Technologies.At lunch with the company CEO,Ngai proudly announced that he had negotiated a(n)________ with a client that represented the customer's long-term commitment to buy components from Hung.

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?

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

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

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

Explain what is meant by the expenditure cycle as a "mirror image" of the revenue cycle.

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.

The first major business activity in the expenditure cycle is

One objective of accounts payable is to authorize payment only for goods or services actually ordered and received.The best way to process supplier invoices is to use

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

Economic Order Quantity (EOQ)includes several variables that must be taken into consideration when calculating the optimal order size.One variable,the costs associated with holding inventory,is referred to as

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