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

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

The cash disbursement function is

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

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

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

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

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

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

Name two major benefits of automating the purchasing effort.

Inventory control should be located in the warehouse.

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

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

In the expenditure cycle,general ledger does not

Explain why supervision is so important in the receiving department.

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

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

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

Differentiate between a purchase requisition and a purchase order.

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

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