Question 1

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 2

Ideally, payroll checks are written on a special bank account used only for payroll.

Accepted Answer

A) True 
 B)False

Question 3

Which internally generated documents should be compared to the supplier's invoice to: (1) verify the price of an item and (2) verify the quantity being billed for?

Accepted Answer

(1) purcha

Question 4

List specific jobs that should be segregated in (1) the purchases processing system and (2) the cash disbursements system.

Accepted Answer

(1)inventory control from warehouse, gen

Question 5

To maintain a good credit rating and to optimize cash management, cash disbursements should arrive at the vendor's place of business

Accepted Answer

A)  as soon as possible 
B)  on the due date 
C)  on the discount date 
D)  by the end of the month 
A)  as soon as possible 
B)  on the due date 
C)  on the discount date 
D)  by the end of the month

Question 6

When purchasing inventory, which document usually triggers the recording of a liability?

Accepted Answer

A)  purchase requisition 
B)  purchase order 
C)  receiving report 
D)  supplier's invoice 
A)  purchase requisition 
B)  purchase order 
C)  receiving report 
D)  supplier's invoice

Question 7

When searching for unrecorded liabilities at the end of an accounting period, the accountant would search all of the files except

Accepted Answer

A)  the purchase requisition file 
B)  the cash receipts file 
C)  the purchase order file 
D)  the receiving report file 
A)  the purchase requisition file 
B)  the cash receipts file 
C)  the purchase order file 
D)  the receiving report file

Question 8

Which department is responsible for approving changes in pay rates for employees?

Accepted Answer

A)  payroll 
B)  treasurer 
C)  personnel 
D)  cash disbursements 
A)  payroll 
B)  treasurer 
C)  personnel 
D)  cash disbursements

Question 9

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 10

The purpose of the purchase requisition is to

Accepted Answer

A)  order goods from vendors 
B)  record receipt of goods from vendors 
C)  authorize the purchasing department to order goods 
D)  bill for goods delivered 
A)  order goods from vendors 
B)  record receipt of goods from vendors 
C)  authorize the purchasing department to order goods 
D)  bill for goods delivered

Question 11

What are the steps taken in the cash disbursement system?

Accepted Answer

Accounts payable reviews the documents r

Question 12

Name the key tasks associated with purchases procedures.

Accepted Answer

Purchases procedures include t

Question 13

Work-in-process records are updated by payroll personnel.

Accepted Answer

A) True 
 B)False

Question 14

The Golf Club Company makes custom golf clubs. The manufacturing supervisor interviews people who have specialized manufacturing skills, and he informs payroll when an employee is hired. The employees use a time clock to record the hours they work. The employees are also required to keep a record of the time they spend working on each order. The supervisor approves all time cards.
The accountant analyzes the job tickets and prepares a labor distribution summary. Payroll prepares the payroll register and paychecks. The supervisor distributes the paychecks to the employees. Payroll informs cash disbursement of the funds required to cover the entire payroll amount. The cash disbursements clerk ensures that there are adequate funds in the company's regular checking account to cover the payroll.
Describe at least three internal control weaknesses; for each weakness suggest an improvement to internal control.

Accepted Answer

WEAKNESS: The supervisor could be creati

Question 15

The document that captures the total amount of time that individual workers spend on each production job is called a

Accepted Answer

A)  time card 
B)  job ticket 
C)  personnel action form 
D)  labor distribution form 
A)  time card 
B)  job ticket 
C)  personnel action form 
D)  labor distribution form

Question 16

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 17

When a copy of the receiving report arrives in the purchasing department, it is used to

Accepted Answer

A)  adjust perpetual inventory records 
B)  record the physical transfer of inventory from receiving to the warehouse 
C)  analyze the receiving department's process 
D)  recognize the purchase order as closed 
A)  adjust perpetual inventory records 
B)  record the physical transfer of inventory from receiving to the warehouse 
C)  analyze the receiving department's process 
D)  recognize the purchase order as closed

Question 18

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 19

Copies of a purchase order are sent to all of the following except

Accepted Answer

A)  inventory control 
B)  receiving 
C)  general ledger 
D)  accounts payable 
A)  inventory control 
B)  receiving 
C)  general ledger 
D)  accounts payable

Question 20

An important reconciliation in the payroll system is

Accepted Answer

A)  general ledger compares the labor distribution summary from cost accounting to the disbursement voucher from accounts payable 
B)  personnel compares the number of employees authorized to receive a paycheck to the number of paychecks prepared 
C)  production compares the number of hours reported on job tickets to the number of hours reported on time cards 
D)  payroll compares the labor distribution summary to the hours reported on time cards 
A)  general ledger compares the labor distribution summary from cost accounting to the disbursement voucher from accounts payable 
B)  personnel compares the number of employees authorized to receive a paycheck to the number of paychecks prepared 
C)  production compares the number of hours reported on job tickets to the number of hours reported on time cards 
D)  payroll compares the labor distribution summary to the hours reported on time cards

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

Ideally, payroll checks are written on a special bank account used only for payroll.

Which internally generated documents should be compared to the supplier's invoice to: (1) verify the price of an item and (2) verify the quantity being billed for?

List specific jobs that should be segregated in (1) the purchases processing system and (2) the cash disbursements system.

To maintain a good credit rating and to optimize cash management, cash disbursements should arrive at the vendor's place of business

When purchasing inventory, which document usually triggers the recording of a liability?

When searching for unrecorded liabilities at the end of an accounting period, the accountant would search all of the files except

Which department is responsible for approving changes in pay rates for employees?

The receiving report is used to

The purpose of the purchase requisition is to

What are the steps taken in the cash disbursement system?

Name the key tasks associated with purchases procedures.

Work-in-process records are updated by payroll personnel.

The document that captures the total amount of time that individual workers spend on each production job is called a

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

When a copy of the receiving report arrives in the purchasing department, it is used to

In the expenditure cycle, general ledger does not

Copies of a purchase order are sent to all of the following except

An important reconciliation in the payroll system is

Auditing and Internal Control

Auditing IT Governance Controls

Auditing Operating Systems and Networks

Auditing Database Systems

Systems Development and Program Change Activities

Transaction Processing and Financial Reporting Systems Overview

Computer Assisted Audit Tools and Techniques

Data Structures and Caatts for Data Extraction

Auditing the Revenue Cycle

Enterprise Resource Planning Systems

Business Ethics, Fraud, and Fraud Detection

Filters

Exam 10: Auditing the Expenditure Cycle

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

Ideally, payroll checks are written on a special bank account used only for payroll.

Which internally generated documents should be compared to the supplier's invoice to: (1) verify the price of an item and (2) verify the quantity being billed for?

List specific jobs that should be segregated in (1) the purchases processing system and (2) the cash disbursements system.

To maintain a good credit rating and to optimize cash management, cash disbursements should arrive at the vendor's place of business

When purchasing inventory, which document usually triggers the recording of a liability?

When searching for unrecorded liabilities at the end of an accounting period, the accountant would search all of the files except

Which department is responsible for approving changes in pay rates for employees?

The receiving report is used to

The purpose of the purchase requisition is to

What are the steps taken in the cash disbursement system?

Name the key tasks associated with purchases procedures.

Work-in-process records are updated by payroll personnel.

The document that captures the total amount of time that individual workers spend on each production job is called a

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

When a copy of the receiving report arrives in the purchasing department, it is used to

In the expenditure cycle, general ledger does not

Copies of a purchase order are sent to all of the following except

An important reconciliation in the payroll system is

Auditing and Internal Control

Auditing IT Governance Controls

Auditing Operating Systems and Networks

Auditing Database Systems

Systems Development and Program Change Activities

Transaction Processing and Financial Reporting Systems Overview

Computer Assisted Audit Tools and Techniques

Data Structures and Caatts for Data Extraction

Auditing the Revenue Cycle

Enterprise Resource Planning Systems

Business Ethics, Fraud, and Fraud Detection

Filters