Question 1

Describe an internal control procedure that would prevent issuing two checks in payment of the same invoice.

Accepted Answer

The supporting documents shoul...

Question 2

Name two major benefits of automating the purchasing effort.

Accepted Answer

improved inventory c...

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

Question 4

The cash disbursement function is

Accepted Answer

A)   part of accounts payable
B)   an independent accounting function
C)   a treasury function
D)   part of the general ledger department

Question 5

Authorization for a cash disbursement occurs in the cash disbursement department upon receipt of the supplier's invoice.

Accepted Answer

A) True 
 B)False

Question 6

Authorization for payment of an accounts payable liability is the responsibility of

Accepted Answer

A)   inventory control
B)   purchasing
C)   accounts payable
D)   cash disbursements

Question 7

In a voucher system,the sum of all unpaid vouchers in the voucher register equals the firm's total voucher payable balance.

Accepted Answer

A) True 
 B)False

Question 8

Explain why supervision is so important in the receiving department.

Accepted Answer

Receiving department employees have cust...

Question 9

Inventory control should be located in the warehouse.

Accepted Answer

A) True 
 B)False

Question 10

Inspection of shipments in the receiving department would be improved if the documentation showed the value of the inventory.

Accepted Answer

A) True 
 B)False

Question 11

Supervision in receiving is intended to reduce the theft of assets.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Because of time delays between receiving inventory and making the journal entry

Accepted Answer

A)   liabilities are usually understated
B)   liabilities are usually overstated
C)   liabilities are usually correctly stated
D)   none of the above

Question 14

Differentiate between a purchase requisition and a purchase order.

Accepted Answer

A purchase requisition is completed by t...

Question 15

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 16

In regards to the accounts payable department,which statement is not true?

Accepted Answer

A)   the purchase requisition shows that the transaction was authorized
B)   the purchase order proves that the purchase was required
C)   the receiving report provides evidence of the physical receipt of the goods
D)   the supplier's invoice indicates the financial value of the transaction

Question 17

The reason that a blind copy of the purchase order is sent to receiving is to

Accepted Answer

A)   inform receiving when a shipment is due
B)   force a count of the items delivered
C)   inform receiving of the type, quantity, and price of items to be delivered
D)   require that the goods delivered are inspected

Question 18

Supervision is extremely important in the receiving department.Two main reasons were given.What were they? Why are these important?

Accepted Answer

Supervision is important in the receivin...

Question 19

The blind copy of the purchase order that goes to the receiving department contains no item descriptions.

Accepted Answer

A) True 
 B)False

Question 20

Proper segregation of duties requires that the responsibility approving a payment be separated from posting to the cash disbursements journal.

Accepted Answer

A) True 
 B)False

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

The cash disbursement function is

Correct AnswerverifiedShow Answer

In a voucher system,the sum of all unpaid vouchers in the voucher register equals the firm's total voucher payable balance.

Correct AnswerverifiedShow Answer

The blind copy of the purchase order that goes to the receiving department contains no item descriptions.

Correct AnswerverifiedShow Answer

Describe an internal control procedure that would prevent issuing two checks in payment of the same invoice.

Correct AnswerverifiedThe supporting documents shoul...View AnswerShow Answer

In the expenditure cycle,general ledger does not

Correct AnswerverifiedShow Answer

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

Correct Answerverifiedpayment at higher th...View AnswerShow Answer

Supervision is extremely important in the receiving department.Two main reasons were given.What were they? Why are these important?

Correct AnswerverifiedSupervision is important in the receivin...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Supervision in receiving is intended to reduce the theft of assets.

Correct AnswerverifiedShow Answer

Explain why supervision is so important in the receiving department.

Correct AnswerverifiedReceiving department employees have cust...View AnswerShow Answer

Authorization for a cash disbursement occurs in the cash disbursement department upon receipt of the supplier's invoice.

Correct AnswerverifiedShow Answer

Because of time delays between receiving inventory and making the journal entry

Correct AnswerverifiedShow Answer

Inspection of shipments in the receiving department would be improved if the documentation showed the value of the inventory.

Correct AnswerverifiedShow Answer

Authorization for payment of an accounts payable liability is the responsibility of

Correct AnswerverifiedShow Answer

Proper segregation of duties requires that the responsibility approving a payment be separated from posting to the cash disbursements journal.

Correct AnswerverifiedShow Answer

The reason that a blind copy of the purchase order is sent to receiving is to

Correct AnswerverifiedShow Answer

Differentiate between a purchase requisition and a purchase order.

Correct AnswerverifiedA purchase requisition is completed by t...View AnswerShow Answer

Name two major benefits of automating the purchasing effort.

Correct Answerverifiedimproved inventory c...View AnswerShow Answer

Inventory control should be located in the warehouse.

Correct AnswerverifiedShow Answer

In regards to the accounts payable department,which statement is not true?

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
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The supporting documents shoul...
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Correct Answer
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Correct Answer
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payment at higher th...
View Answer

Correct Answer
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Supervision is important in the receivin...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Receiving department employees have cust...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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A purchase requisition is completed by t...
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Correct Answer
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improved inventory c...
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Correct Answer
verified

Correct Answer
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