Question 1

What is the principle objective of the cash disbursement system?

Accepted Answer

The principal objective of this system i

Question 2

What type of error or fraud might happen if the accounts payable ledger is not periodically reconciled to the control account in the general ledger?

Accepted Answer

errors in A/P proces

Question 3

In the expenditure cycle,general ledger does not

Accepted Answer

A)  post the journal voucher from the accounts payable department 
B)  post the account summary from inventory control 
C)  post the journal voucher from the purchasing department 
D)  reconcile the inventory control account with the inventory subsidiary summary 
A)  post the journal voucher from the accounts payable department 
B)  post the account summary from inventory control 
C)  post the journal voucher from the purchasing department 
D)  reconcile the inventory control account with the inventory subsidiary summary

Question 4

Describe an internal control procedure that would prevent payment of a invoice for goods that were never delivered.

Accepted Answer

Accounts payable sho

Question 5

A major risk exposure in the expenditure cycle is that accounts payable may be overstated at the end of the accounting year.

Accepted Answer

A) True 
 B)False

Question 6

The open purchase order file in the purchasing department is used to determine

Accepted Answer

A)  the quality of items a vendor ships 
B)  the best vendor for a specific item 
C)  the orders that have not been received 
D)  the quantity of items received 
A)  the quality of items a vendor ships 
B)  the best vendor for a specific item 
C)  the orders that have not been received 
D)  the quantity of items received

Question 7

Firms that wish to improve control over cash disbursements use a voucher system.

Accepted Answer

A) True 
 B)False

Question 8

Which internally generated document should be compared to the supplier's invoice to verify the price of an item?

Accepted Answer

The answer of Which internally generated document should be compared...

Question 9

In non-manufacturing firms,purchasing decisions are authorized by inventory control.

Accepted Answer

A) True 
 B)False

Question 10

In a computerized system that uses an economic order quantity (EOQ)model and the perpetual inventory method,who determines when to reorder inventory?

Accepted Answer

A)  the inventory control clerk 
B)  the purchasing department 
C)  the vendor 
D)  the computer system 
A)  the inventory control clerk 
B)  the purchasing department 
C)  the vendor 
D)  the computer system

Question 11

If accounts payable receives an invoice directly from the supplier it needs to be reconciled with the purchase order and receiving report.

Accepted Answer

A) True 
 B)False

Question 12

Firms can expect that proper use of a valid vendor file will result in all of the following benefits except

Accepted Answer

A)  purchasing agents will be discouraged from improperly ordering inventory from related parties 
B)  purchases from fictitious vendors will be detected 
C)  the most competitive price will be obtained 
D)  the risk of purchasing agents receiving kickbacks and bribes will be reduced 
A)  purchasing agents will be discouraged from improperly ordering inventory from related parties 
B)  purchases from fictitious vendors will be detected 
C)  the most competitive price will be obtained 
D)  the risk of purchasing agents receiving kickbacks and bribes will be reduced

Question 13

What is(are)the purpose(s)of maintaining a valid vendor file?

Accepted Answer

Inventories should only be acquired from

Question 14

When goods are received,the receiving clerk sends copies of the receiving report to the inventory control clerk and the AP clerk.

Accepted Answer

A) True 
 B)False

Question 15

The receiving report

Accepted Answer

A)  is used to update the actual cost inventory ledger 
B)  accompanies the goods to the storeroom 
C)  is sent to general ledger 
D)  is returned to the vendor to acknowledge receipt of the goods 
A)  is used to update the actual cost inventory ledger 
B)  accompanies the goods to the storeroom 
C)  is sent to general ledger 
D)  is returned to the vendor to acknowledge receipt of the goods

Question 16

Which of the following statements is not correct?

Accepted Answer

A)  the voucher system is used to improve control over cash disbursements 
B)  the sum of the paid vouchers represents the voucher payable liability of the firm 
C)  the voucher system permits the firm to consolidate payments of several invoices on one voucher 
D)  many firms replace accounts payable with a voucher payable system 
A)  the voucher system is used to improve control over cash disbursements 
B)  the sum of the paid vouchers represents the voucher payable liability of the firm 
C)  the voucher system permits the firm to consolidate payments of several invoices on one voucher 
D)  many firms replace accounts payable with a voucher payable system

Question 17

What type of error or fraud might happen if suppliers' invoices are not compared to purchase orders or to receiving reports before payment?

Accepted Answer

payment at higher th

Question 18

The Soap Manufacturing Company has three employees who work in the warehouse.All of the warehouse workers are authorized to order inventory when it falls below the reorder level.The workers complete a purchase order and mail it to the supplier of their choice.The inventory is delivered directly to the warehouse.The workers send a memo to accounts payable reporting the receipt of inventory.
Accounts payable compares the warehouse memo to the supplier's invoice.Accounts payable prepares a check which the treasurer signs.
Describe at least five needed internal control improvements.

Accepted Answer

The warehouse workers should prepare a p

Question 19

The receiving report is used to

Accepted Answer

A)  accompany physical inventories to the storeroom or warehouse 
B)  advise the purchasing department of the dollar value of the goods delivered 
C)  advise general ledger of the accounting entry to be made 
D)  advise the vendor that the goods arrived safely 
A)  accompany physical inventories to the storeroom or warehouse 
B)  advise the purchasing department of the dollar value of the goods delivered 
C)  advise general ledger of the accounting entry to be made 
D)  advise the vendor that the goods arrived safely

Question 20

What are the key segregation of duties issues in purchasing and cash disbursements?

Accepted Answer

The key segregation of duties issue in p

What is the principle objective of the cash disbursement system?

What type of error or fraud might happen if the accounts payable ledger is not periodically reconciled to the control account in the general ledger?

In the expenditure cycle,general ledger does not

Describe an internal control procedure that would prevent payment of a invoice for goods that were never delivered.

A major risk exposure in the expenditure cycle is that accounts payable may be overstated at the end of the accounting year.

The open purchase order file in the purchasing department is used to determine

Firms that wish to improve control over cash disbursements use a voucher system.

Which internally generated document should be compared to the supplier's invoice to verify the price of an item?

In non-manufacturing firms,purchasing decisions are authorized by inventory control.

In a computerized system that uses an economic order quantity (EOQ)model and the perpetual inventory method,who determines when to reorder inventory?

If accounts payable receives an invoice directly from the supplier it needs to be reconciled with the purchase order and receiving report.

Firms can expect that proper use of a valid vendor file will result in all of the following benefits except

What is(are)the purpose(s)of maintaining a valid vendor file?

When goods are received,the receiving clerk sends copies of the receiving report to the inventory control clerk and the AP clerk.

The receiving report

Which of the following statements is not correct?

What type of error or fraud might happen if suppliers' invoices are not compared to purchase orders or to receiving reports before payment?

The receiving report is used to

What are the key segregation of duties issues in purchasing and cash disbursements?

The Information System: an Accountants Perspective

Introduction to Transaction Processing

Ethics,fraud,and Internal Control

The Revenue Cycle

The Expenditure Cycle Part Ii: Payroll Processing and Fixed Asset Procedures

The Conversion Cycle

General Ledger,financial Reporting,and Management Reporting Systems

Database Management Systems

The Rea Approach to Business Process Modeling

Enterprise Resource Planning Systems

Electronic Commerce Systems

Managing the Systems Development Life Cycle

Construct,deliver,and Maintain Systems Projects

IT Controls Part I: Sarbanes-Oxley and It Governance

IT Controls Part II: Security and Access

IT Controls Part III: Systems Development, program Changes, and Application Controls

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Exam 5: The Expenditure Cycle Part I: Purchases and Cash Disbursements Procedures

What is the principle objective of the cash disbursement system?

What type of error or fraud might happen if the accounts payable ledger is not periodically reconciled to the control account in the general ledger?

In the expenditure cycle,general ledger does not

Describe an internal control procedure that would prevent payment of a invoice for goods that were never delivered.

A major risk exposure in the expenditure cycle is that accounts payable may be overstated at the end of the accounting year.

The open purchase order file in the purchasing department is used to determine

Firms that wish to improve control over cash disbursements use a voucher system.

Which internally generated document should be compared to the supplier's invoice to verify the price of an item?

In non-manufacturing firms,purchasing decisions are authorized by inventory control.

In a computerized system that uses an economic order quantity (EOQ)model and the perpetual inventory method,who determines when to reorder inventory?

If accounts payable receives an invoice directly from the supplier it needs to be reconciled with the purchase order and receiving report.

Firms can expect that proper use of a valid vendor file will result in all of the following benefits except

What is(are)the purpose(s)of maintaining a valid vendor file?

When goods are received,the receiving clerk sends copies of the receiving report to the inventory control clerk and the AP clerk.

The receiving report

Which of the following statements is not correct?

What type of error or fraud might happen if suppliers' invoices are not compared to purchase orders or to receiving reports before payment?

The receiving report is used to

What are the key segregation of duties issues in purchasing and cash disbursements?

The Information System: an Accountants Perspective

Introduction to Transaction Processing

Ethics,fraud,and Internal Control

The Revenue Cycle

The Expenditure Cycle Part Ii: Payroll Processing and Fixed Asset Procedures

The Conversion Cycle

General Ledger,financial Reporting,and Management Reporting Systems

Database Management Systems

The Rea Approach to Business Process Modeling

Enterprise Resource Planning Systems

Electronic Commerce Systems

Managing the Systems Development Life Cycle

Construct,deliver,and Maintain Systems Projects

IT Controls Part I: Sarbanes-Oxley and It Governance

IT Controls Part II: Security and Access

IT Controls Part III: Systems Development, program Changes, and Application Controls

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