Question 1

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 2

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 3

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 4

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 5

Under the EOQ inventory approach,carrying costs are usually ignored for low-cost/low-usage items.

Accepted Answer

A) True 
 B)False

Question 6

In the expenditure cycle,good control dictates that expenditures should be paid by check.This may not be feasible when minor purchases are made.To facilitate quick payment for minor purchases,a(n)________ should be set up and maintained using ________.

Accepted Answer

A)  special bank account; disbursement vouchers 
B)  imprest fund; vouchers 
C)  cash box; small denomination bills 
D)  petty cash fund; procurement cards 
A)  special bank account; disbursement vouchers 
B)  imprest fund; vouchers 
C)  cash box; small denomination bills 
D)  petty cash fund; procurement cards

Question 7

What is one of the best ways to improve the overall efficiency and effectiveness of the receipt and storage of ordered items?

Accepted Answer

A)  requiring all suppliers to have the carrier verify quantities and item numbers before shipment 
B)  requiring all suppliers to include RFID tags on their items 
C)  requiring all suppliers to use EDI to expedite the receiving department function 
D)  requiring all delivery trucks to have satellite data terminals to expedite the receiving department function 
A)  requiring all suppliers to have the carrier verify quantities and item numbers before shipment 
B)  requiring all suppliers to include RFID tags on their items 
C)  requiring all suppliers to use EDI to expedite the receiving department function 
D)  requiring all delivery trucks to have satellite data terminals to expedite the receiving department function

Question 8

Identify in which of the following scenarios a company could adjust the balance due the vendor by issuing a debit memo.

Accepted Answer

A)  quantity different from that ordered 
B)  damage to the goods 
C)  goods that fail inspection for quality 
D)  All of the above are possible scenarios. 
A)  quantity different from that ordered 
B)  damage to the goods 
C)  goods that fail inspection for quality 
D)  All of the above are possible scenarios.

Question 9

A surprise count of an imprest petty cash fund should find the total of ________ equal to the amount authorized for the fund.

Accepted Answer

A)  cash and credit memos 
B)  cash and vouchers 
C)  cash 
D)  cash and checks 
A)  cash and credit memos 
B)  cash and vouchers 
C)  cash 
D)  cash and checks

Question 10

The traditional approach to inventory management to ensure sufficient quantity on hand to maintain production is known as

Accepted Answer

A)  safety stock. 
B)  just-in-time production. 
C)  economic order quantity. 
D)  optimal inventory quantity. 
A)  safety stock. 
B)  just-in-time production. 
C)  economic order quantity. 
D)  optimal inventory quantity.

Question 11

Identify the most accurate statement below.

Accepted Answer

A)  Several purchase requisitions are often created to fill one purchase order. 
B)  Several purchase orders are often created to fill one purchase requisition. 
C)  Every purchase requisition should lead to the creation of one purchase order. 
D)  Every purchase order should lead to the creation of one purchase requisition. 
A)  Several purchase requisitions are often created to fill one purchase order. 
B)  Several purchase orders are often created to fill one purchase requisition. 
C)  Every purchase requisition should lead to the creation of one purchase order. 
D)  Every purchase order should lead to the creation of one purchase requisition.

Question 12

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 13

Which of the controls below would be least effective at preventing a company from ordering goods at a price higher than market?

Accepted Answer

A)  Only place orders with vendors on an approved vendor list. 
B)  Variance analysis of actual expenses to budgeted expenses 
C)  For high-dollar goods, solicit competitive bids from possible vendors. 
D)  Frequent review of, and update to, vendor price lists stored in the AIS 
A)  Only place orders with vendors on an approved vendor list. 
B)  Variance analysis of actual expenses to budgeted expenses 
C)  For high-dollar goods, solicit competitive bids from possible vendors. 
D)  Frequent review of, and update to, vendor price lists stored in the AIS

Question 14

A voucher package should include

Accepted Answer

A)  a purchase requisition, vendor invoice, and receiving report. 
B)  a purchase order, vendor invoice, and receiving report. 
C)  a purchase requisition, purchase order, and receiving report. 
D)  a bill of lading and vendor invoice. 
A)  a purchase requisition, vendor invoice, and receiving report. 
B)  a purchase order, vendor invoice, and receiving report. 
C)  a purchase requisition, purchase order, and receiving report. 
D)  a bill of lading and vendor invoice.

Question 15

To minimize the number of checks that need to be written to pay vendor invoices,a company should use

Accepted Answer

A)  a voucher system. 
B)  a just-in-time inventory system. 
C)  a nonvoucher system. 
D)  an evaluated receipt settlement system. 
A)  a voucher system. 
B)  a just-in-time inventory system. 
C)  a nonvoucher system. 
D)  an evaluated receipt settlement system.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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 18

Discuss the differences between EOQ,MRP,and JIT.

Accepted Answer

Economic Order Quantity (EOQ)is the trad

Question 19

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

Accepted Answer

EDI eliminates the need to enter invoice

Question 20

Just-In-Time (JIT)inventory is best characterized by

Accepted Answer

A)  frequent deliveries of large quantities to be held at the work centers. 
B)  frequent deliveries of smaller quantities of items to the work centers. 
C)  less frequent deliveries of large quantities of goods to central receiving. 
D)  infrequent bulk deliveries of items directly to work centers. 
A)  frequent deliveries of large quantities to be held at the work centers. 
B)  frequent deliveries of smaller quantities of items to the work centers. 
C)  less frequent deliveries of large quantities of goods to central receiving. 
D)  infrequent bulk deliveries of items directly to work centers.

Exam 13: The Expenditure Cycle: Purchasing to Cash Disbursements

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

Restricting access to the approved supplier list can

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

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

Under the EOQ inventory approach,carrying costs are usually ignored for low-cost/low-usage items.

In the expenditure cycle,good control dictates that expenditures should be paid by check.This may not be feasible when minor purchases are made.To facilitate quick payment for minor purchases,a(n)________ should be set up and maintained using ________.

What is one of the best ways to improve the overall efficiency and effectiveness of the receipt and storage of ordered items?

Identify in which of the following scenarios a company could adjust the balance due the vendor by issuing a debit memo.

A surprise count of an imprest petty cash fund should find the total of ________ equal to the amount authorized for the fund.

The traditional approach to inventory management to ensure sufficient quantity on hand to maintain production is known as

Identify the most accurate statement below.

Which of the controls below would be least effective at preventing a company from ordering goods at a price higher than market?

A voucher package should include

To minimize the number of checks that need to be written to pay vendor invoices,a company should use

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

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

Discuss the differences between EOQ,MRP,and JIT.

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

Just-In-Time (JIT)inventory is best characterized by

Accounting Information Systems: an Overview

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

In the expenditure cycle,good control dictates that expenditures should be paid by check.This may not be feasible when minor purchases are made.To facilitate quick payment for minor purchases,a(n) should be set up and maintained using .