Question 1

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.

Question 2

In a supplier audit,what are some of the red flags that could indicate potential supplier's problems?

Accepted Answer

(1)A large percentage of the supplier's ...

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

The ________ specifies the point at which inventory is needed.

Accepted Answer

A)  company inventory policies
B)  reorder point
C)  economic order quantity
D)  stockout point

Question 5

What control would best mitigate the threat of paying an invoice twice?

Accepted Answer

A)  never authorizing payment of a photocopy of an invoice
B)  double-checking mathematical accuracy of invoices
C)  approval of purchase orders
D)  maintaining adequate perpetual inventory records

Question 6

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

Accepted Answer

EDI eliminates the need to enter invoice...

Question 7

Ideally,inventory purchases occur in response to ________ in a JIT inventory system.

Accepted Answer

A)  customer demand
B)  optimal demand
C)  forecast demand
D)  supplier demand

Question 8

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.

Question 9

Which of the following controls would be the least effective in preventing paying the same invoice twice?

Accepted Answer

A)  Only pay from original invoices.
B)  Cancel each document in the voucher package once the check is prepared and mailed.
C)  Only pay vendor invoices that have been matched and reconciled to a purchase order and a receiving report.
D)  Allow only the accounts payable department to authorize payment for vendor invoices and allow only the cash disbursements department to cut and mail checks to vendors.

Question 10

A receiving clerk notes that a delivery of 10 units has been received,but the purchase order specified 12 units.A debit memo will need to be prepared to adjust for the difference between the quantity ordered and received.Who should prepare this document?

Accepted Answer

A)  the receiving clerk
B)  the controller
C)  the vendor
D)  the purchasing department manager

Question 11

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.

Question 12

One way a firm could reduce the risk of problems with supplier dependability is to

Accepted Answer

A)  purchase inventory from only U.S.-based suppliers.
B)  use an ERP system for purchases.
C)  require suppliers to be ISO 9000 certified.
D)  automate the purchasing function.

Question 13

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

Accepted Answer

A)  receiving and accepting inventory not ordered
B)  theft of inventory by receiving department employees
C)  update of wrong inventory items due to data entry error
D)  order for an excessive quantity of inventory

Question 14

Why would a firm perform ABC cost analysis?

Accepted Answer

A)  to identify the best inventory supplier
B)  to reconcile accounts payable
C)  to prioritize physical inventory counts
D)  to verify production quality

Question 15

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

Accepted Answer

A)  product price
B)  vendor corporate structure
C)  product quality
D)  vendor delivery dependability

Question 16

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.

Question 17

Which of the following controls can minimize the threat of errors in supplier invoices?

Accepted Answer

A)  The use of positive pay.
B)  Do not inform receiving employees about quantity ordered.
C)  The use of ERS.
D)  Perpetual inventory system.

Question 18

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.

Question 19

Which of the following is generally not shown on a receiving report?

Accepted Answer

A)  price of the items
B)  quantity of the items
C)  purchase order number
D)  counted and inspected by

Question 20

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.

Exam 13: The Expenditure Cycle: Purchasing to Cash Disbursements

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

Correct Answer
verified

What is not an advantage of using disbursement vouchers?

Correct Answer
verified

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

Correct Answer
verified
Key control problems in the area of paym...
View Answer

Materials requirements planning (MRP)

Correct Answer
verified

Which of the following controls would be the least effective in preventing paying the same invoice twice?

Correct Answer
verified

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

Correct Answer
verified

The ________ specifies the point at which inventory is needed.

Correct Answer
verified

What control would best mitigate the threat of paying an invoice twice?

Correct Answer
verified

Correct Answer
verified

A receiving clerk notes that a delivery of 10 units has been received,but the purchase order specified 12 units.A debit memo will need to be prepared to adjust for the difference between the quantity ordered and received.Who should prepare this document?

Correct Answer
verified

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

Correct Answer
verified

Why would a firm perform ABC cost analysis?

Correct Answer
verified

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?

Correct Answer
verified

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

Correct Answer
verified
EDI eliminates the need to enter invoice...
View Answer

Ideally,inventory purchases occur in response to ________ in a JIT inventory system.

Correct Answer
verified

Which of the following controls can minimize the threat of errors in supplier invoices?

Correct Answer
verified

In a supplier audit,what are some of the red flags that could indicate potential supplier's problems?

Correct Answer
verified
(1)A large percentage of the supplier's ...
View Answer

Restricting access to the approved supplier list can

Correct Answer
verified

Which of the following is generally not shown on a receiving report?

Correct Answer
verified

One way a firm could reduce the risk of problems with supplier dependability is to

Correct Answer
verified

Exam 13: The Expenditure Cycle: Purchasing to Cash Disbursements

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

Correct AnswerverifiedShow Answer

What is not an advantage of using disbursement vouchers?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedKey control problems in the area of paym...View AnswerShow Answer

Materials requirements planning (MRP)

Correct AnswerverifiedShow Answer

Which of the following controls would be the least effective in preventing paying the same invoice twice?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The ________ specifies the point at which inventory is needed.

Correct AnswerverifiedShow Answer

What control would best mitigate the threat of paying an invoice twice?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A receiving clerk notes that a delivery of 10 units has been received,but the purchase order specified 12 units.A debit memo will need to be prepared to adjust for the difference between the quantity ordered and received.Who should prepare this document?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Why would a firm perform ABC cost analysis?

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedEDI eliminates the need to enter invoice...View AnswerShow Answer

Ideally,inventory purchases occur in response to ________ in a JIT inventory system.

Correct AnswerverifiedShow Answer

Which of the following controls can minimize the threat of errors in supplier invoices?

Correct AnswerverifiedShow Answer

In a supplier audit,what are some of the red flags that could indicate potential supplier's problems?

Correct Answerverified(1)A large percentage of the supplier's ...View AnswerShow Answer

Restricting access to the approved supplier list can

Correct AnswerverifiedShow Answer

Which of the following is generally not shown on a receiving report?

Correct AnswerverifiedShow Answer

One way a firm could reduce the risk of problems with supplier dependability is to

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Key control problems in the area of paym...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
EDI eliminates the need to enter invoice...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
(1)A large percentage of the supplier's ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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