Question 1

The main reason that receiving clerks are denied access to purchase order quantities and prices is to:

Accepted Answer

A) Ensure that the receiving clerk actually takes the time to verify the accuracy of a delivery before accepting it 
B) Prevent the receiving clerk from stealing delivered goods and manipulating the quantities and prices of received goods 
C) Prevent fraudulent collusion between the common carrier and the receiving clerk 
D) N/A: the receiving clerk is NOT denied access to purchase order quantities and prices 
A) Ensure that the receiving clerk actually takes the time to verify the accuracy of a delivery before accepting it 
B) Prevent the receiving clerk from stealing delivered goods and manipulating the quantities and prices of received goods 
C) Prevent fraudulent collusion between the common carrier and the receiving clerk 
D) N/A: the receiving clerk is NOT denied access to purchase order quantities and prices

Question 2

The document prepared when purchased items are returned is a(n):

Accepted Answer

A) Debit memo 
B) Invoice 
C) Receiving report 
D) Shipping notice 
A) Debit memo 
B) Invoice 
C) Receiving report 
D) Shipping notice

Question 3

Which of the following groups has an ethical obligation to establish the proper tone at the top, strong internal controls, and high ethical standards?

Accepted Answer

A) Stockholders 
B) Board of Directors and Management 
C) Employees 
D) Audit Committee 
A) Stockholders 
B) Board of Directors and Management 
C) Employees 
D) Audit Committee

Question 4

Input controls such as field check, validity check, limit check, and reasonableness check are useful in IT systems of purchase to lessen which of the following risks?

Accepted Answer

A) Unauthorized access 
B) Invalid data entered by vendors 
C) Repudiation of purchase transactions 
D) Virus and worm attacks 
A) Unauthorized access 
B) Invalid data entered by vendors 
C) Repudiation of purchase transactions 
D) Virus and worm attacks

Question 5

The internal control activities within the purchasing process, related to authorization of transactions, would include which of the following?

Accepted Answer

A) The accounting duties related to requisitioning, ordering, and receiving goods should be performed by different individuals. 
B) The custody of inventory and the recording of inventory transactions are required to be maintained. 
C) Specific individuals should be given authoritative responsibility for preparing purchase requisitions and purchase orders which would include which items to purchase, how many items, and which vendor. 
D) Periodic physical inventory counts are to be reconciled with the inventory ledger and general ledger. 
A) The accounting duties related to requisitioning, ordering, and receiving goods should be performed by different individuals. 
B) The custody of inventory and the recording of inventory transactions are required to be maintained. 
C) Specific individuals should be given authoritative responsibility for preparing purchase requisitions and purchase orders which would include which items to purchase, how many items, and which vendor. 
D) Periodic physical inventory counts are to be reconciled with the inventory ledger and general ledger.

Question 6

The monthly review and reconciliation of vendor statements and accounts payable records minimizes the risk of all of the following except

Accepted Answer

A) ommitted or fictitious returns 
B) recording an invoice with an incorrect vendor 
C) timing issues 
D) invoices from a fictitious vendor 
A) ommitted or fictitious returns 
B) recording an invoice with an incorrect vendor 
C) timing issues 
D) invoices from a fictitious vendor

Question 7

Goods received are unacceptable due to may different situations.Which of the following is not one of those situations?

Accepted Answer

A) Damage or defects 
B) Changes in the company needs regarding future sales or production 
C) Errors in the type of goods delivered or ordered 
D) Timing issues 
A) Damage or defects 
B) Changes in the company needs regarding future sales or production 
C) Errors in the type of goods delivered or ordered 
D) Timing issues

Question 8

This form is prepared to document the need to make a purchase and requests that the specific items and quantities be purchased.

Accepted Answer

A) Purchase order 
B) Purchase requisition 
C) Purchase invoice 
D) Purchase journal 
A) Purchase order 
B) Purchase requisition 
C) Purchase invoice 
D) Purchase journal

Question 9

A record keeping tool used to record purchases in a manual accounting system.This "tool" would consist of recording all of the purchased orders issued to vendors in a chronological order.

Accepted Answer

A) Purchase order 
B) Purchase requisition 
C) Purchase invoice 
D) Purchase journal 
A) Purchase order 
B) Purchase requisition 
C) Purchase invoice 
D) Purchase journal

Question 10

Which of the following departments is not a part of the purchasing process?

Accepted Answer

A) Receiving 
B) Warehouse 
C) Cash Disbursements 
D) Accounts Payable 
A) Receiving 
B) Warehouse 
C) Cash Disbursements 
D) Accounts Payable

Question 11

Which of the given departments will immediately adjust the vendor account for each purchase transaction so that the company will know the correct amount owed to the vendor?

Accepted Answer

A) Purchasing 
B) Receiving 
C) Accounts Payable 
D) Shipping 
A) Purchasing 
B) Receiving 
C) Accounts Payable 
D) Shipping

Question 12

A company should study risks common to its system prior to deciding the mix of controls needed.High-risk characteristics that might justify the need for extensive internal controls include all of the following, except:

Accepted Answer

A) Goods received are especially difficult to differentiate, count, or inspect. 
B) High volumes of goods are often received, or the goods are of high value. 
C) Receiving and/or record keeping are performed at one centralized location. 
D) Changes in price or vendors are frequent. 
A) Goods received are especially difficult to differentiate, count, or inspect. 
B) High volumes of goods are often received, or the goods are of high value. 
C) Receiving and/or record keeping are performed at one centralized location. 
D) Changes in price or vendors are frequent.

Question 13

Internal control activities within the purchasing process, identified as segregation of duties, would include all of the following, except:

Accepted Answer

A) Responsibility for authorization, custody, and record keeping are to be assigned to different individuals. 
B) Duties related to requisitioning, ordering, purchase approval, receiving, inventory control, accounts payable, and general accounting are to be delegated to separate departments or individuals. 
C) Complete separation of inventory custody from inventory accounting. 
D) Purchasing records and programs must be protected from unauthorized access. 
A) Responsibility for authorization, custody, and record keeping are to be assigned to different individuals. 
B) Duties related to requisitioning, ordering, purchase approval, receiving, inventory control, accounts payable, and general accounting are to be delegated to separate departments or individuals. 
C) Complete separation of inventory custody from inventory accounting. 
D) Purchasing records and programs must be protected from unauthorized access.

Question 14

Which of the following must a company have in place to capture, record, summarize, and report transactions?

Accepted Answer

A) Systems and processes 
B) Systems and activities 
C) Processes and requisitions 
D) Activities and requisitions 
A) Systems and processes 
B) Systems and activities 
C) Processes and requisitions 
D) Activities and requisitions

Question 15

Within cash disbursements, all of the following should be true before a check is prepared, except that:

Accepted Answer

A) The purchase order, receiving report, and invoice have been matched. 
B) The purchased goods have been used. 
C) Sufficient cash is available. 
D) The invoice discount date or due date is imminent. 
A) The purchase order, receiving report, and invoice have been matched. 
B) The purchased goods have been used. 
C) Sufficient cash is available. 
D) The invoice discount date or due date is imminent.

Question 16

In order to help safeguard the processing integrity in an electronic business environment, a company should implement input controls such as field check, validity check, limit check, reasonableness check, and computer logs in order to reduce the risk of:

Accepted Answer

A) Worm attacks 
B) Hackers 
C) Unauthorized access 
D) Invalid data entry 
A) Worm attacks 
B) Hackers 
C) Unauthorized access 
D) Invalid data entry

Question 17

It is necessary for a company to maintain good control over their accounts payable and paying by the due date, for all of the following reasons, except:

Accepted Answer

A) Avoid late payment fees 
B) Maintain relationships with customers 
C) To take advantage of discounts for early payment 
D) To stay on good terms with its vendors 
A) Avoid late payment fees 
B) Maintain relationships with customers 
C) To take advantage of discounts for early payment 
D) To stay on good terms with its vendors

Question 18

This form is issued by the buyer, and presented to the seller, to indicate the details for products or services that the seller will provide to the buyer.Information included on this form would be: products, quantities, and agreed-upon prices.

Accepted Answer

A) Purchase order 
B) Purchase requisition 
C) Purchase invoice 
D) Purchase journal 
A) Purchase order 
B) Purchase requisition 
C) Purchase invoice 
D) Purchase journal

Question 19

All of the following are external reports except:

Accepted Answer

A) Balance Sheet 
B) Income Statement 
C) Cash Flows Statement 
D) Aged Accounts Receivable Schedule 
A) Balance Sheet 
B) Income Statement 
C) Cash Flows Statement 
D) Aged Accounts Receivable Schedule

Question 20

Advantages of an automated system includes all of the following, except:

Accepted Answer

A) Reduce time, costs, errors, and duplicate payments 
B) Increased cost of the system 
C) Provides management more timely information to forecast future cash outflows for payment of invoices 
D) Summarized detailed transactions into summary amounts that are posted to the general ledger accounts 
A) Reduce time, costs, errors, and duplicate payments 
B) Increased cost of the system 
C) Provides management more timely information to forecast future cash outflows for payment of invoices 
D) Summarized detailed transactions into summary amounts that are posted to the general ledger accounts

The main reason that receiving clerks are denied access to purchase order quantities and prices is to:

The document prepared when purchased items are returned is a(n):

Which of the following groups has an ethical obligation to establish the proper tone at the top, strong internal controls, and high ethical standards?

Input controls such as field check, validity check, limit check, and reasonableness check are useful in IT systems of purchase to lessen which of the following risks?

The internal control activities within the purchasing process, related to authorization of transactions, would include which of the following?

The monthly review and reconciliation of vendor statements and accounts payable records minimizes the risk of all of the following except

Goods received are unacceptable due to may different situations.Which of the following is not one of those situations?

This form is prepared to document the need to make a purchase and requests that the specific items and quantities be purchased.

A record keeping tool used to record purchases in a manual accounting system.This "tool" would consist of recording all of the purchased orders issued to vendors in a chronological order.

Which of the following departments is not a part of the purchasing process?

Which of the given departments will immediately adjust the vendor account for each purchase transaction so that the company will know the correct amount owed to the vendor?

A company should study risks common to its system prior to deciding the mix of controls needed.High-risk characteristics that might justify the need for extensive internal controls include all of the following, except:

Internal control activities within the purchasing process, identified as segregation of duties, would include all of the following, except:

Which of the following must a company have in place to capture, record, summarize, and report transactions?

Within cash disbursements, all of the following should be true before a check is prepared, except that:

In order to help safeguard the processing integrity in an electronic business environment, a company should implement input controls such as field check, validity check, limit check, reasonableness check, and computer logs in order to reduce the risk of:

It is necessary for a company to maintain good control over their accounts payable and paying by the due date, for all of the following reasons, except:

This form is issued by the buyer, and presented to the seller, to indicate the details for products or services that the seller will provide to the buyer.Information included on this form would be: products, quantities, and agreed-upon prices.

All of the following are external reports except:

Advantages of an automated system includes all of the following, except:

Introduction to AIS

Foundational Concepts of the AIS

Fraud, Ethics, and Internal Control

Internal Controls and Risks in IT Systems

IT Governance

Enterprise Resource Planning ERP Systems

Auditing Information Technology-Based Processes

Revenue and Cash Collection Processes and Controls

Expenditures Processes and Controlspayroll and Fixed Assets

Conversion Processes and Controls

Administrative Processes and Controls

Data and Databases

E-Commerce and E-Business

Filters

Exam 9: Expenditures Processes and Controlspurchases

The main reason that receiving clerks are denied access to purchase order quantities and prices is to:

The document prepared when purchased items are returned is a(n):

Which of the following groups has an ethical obligation to establish the proper tone at the top, strong internal controls, and high ethical standards?

Input controls such as field check, validity check, limit check, and reasonableness check are useful in IT systems of purchase to lessen which of the following risks?

The internal control activities within the purchasing process, related to authorization of transactions, would include which of the following?

The monthly review and reconciliation of vendor statements and accounts payable records minimizes the risk of all of the following except

Goods received are unacceptable due to may different situations.Which of the following is not one of those situations?

This form is prepared to document the need to make a purchase and requests that the specific items and quantities be purchased.

A record keeping tool used to record purchases in a manual accounting system.This "tool" would consist of recording all of the purchased orders issued to vendors in a chronological order.

Which of the following departments is not a part of the purchasing process?

Which of the given departments will immediately adjust the vendor account for each purchase transaction so that the company will know the correct amount owed to the vendor?

A company should study risks common to its system prior to deciding the mix of controls needed.High-risk characteristics that might justify the need for extensive internal controls include all of the following, except:

Internal control activities within the purchasing process, identified as segregation of duties, would include all of the following, except:

Which of the following must a company have in place to capture, record, summarize, and report transactions?

Within cash disbursements, all of the following should be true before a check is prepared, except that:

In order to help safeguard the processing integrity in an electronic business environment, a company should implement input controls such as field check, validity check, limit check, reasonableness check, and computer logs in order to reduce the risk of:

It is necessary for a company to maintain good control over their accounts payable and paying by the due date, for all of the following reasons, except:

This form is issued by the buyer, and presented to the seller, to indicate the details for products or services that the seller will provide to the buyer.Information included on this form would be: products, quantities, and agreed-upon prices.

All of the following are external reports except:

Advantages of an automated system includes all of the following, except:

Introduction to AIS

Foundational Concepts of the AIS

Fraud, Ethics, and Internal Control

Internal Controls and Risks in IT Systems

IT Governance

Enterprise Resource Planning ERP Systems

Auditing Information Technology-Based Processes

Revenue and Cash Collection Processes and Controls

Expenditures Processes and Controlspayroll and Fixed Assets

Conversion Processes and Controls

Administrative Processes and Controls

Data and Databases

E-Commerce and E-Business

Filters