Exam 10: Purchasing and Payments Process

Choose from the list below the best control activity to prevent goods accepted earlier or later than the scheduled delivery date that may result in excessive or obsolete inventory.

The data collected during the purchasing of raw materials can be converted into several purchasing reports. Below is a list of some of those reports. Which report lists the total number of purchase orders that have been completed by suppliers and vendors or remain outstanding within a period of time?

Invoices paid twice may result in overpayments to vendors. Choose the best control activity to address this risk.

Unrecorded payments may result in duplicate payments to vendors or misstatement of financial statements by overstating cash and accounts payable. Choose the best control activity to address this risk.

Some business activities in the purchasing and payments processes result in the exchange of economic resources and recording of accounting transactions. Other activities in the processes do not result in an accounting transaction. Choose from the list below the activity that does NOT result in an accounting transaction.

Inventory is a balance sheet line item that includes all items used in the creation of products. Which of the following is classified as an item that is used in the creation of a product?

Choose from the list below the best control activity to prevent unauthorized purchase orders submitted to an unauthorized vendor that may result in unauthorized or fraudulent purchases.

Review the diagram below: Which deliverable is B?

Payments made to unauthorized or nonexistent purchases may result in fraudulent misappropriation of cash. Choose the best control activity to address this risk.

Review the diagram below: What business activity does E represent?

The raw material purchasing reports can provide management with insight into how to improve processes. Additional raw materials purchasing analytics can be used for decision making and dashboards. Which raw material purchasing analytic analyzes the frequency of purchasing at a single vendor increasing greater than a threshold over time?

RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. RAM Manufacturing maintains a lot of inventory and uses NetSuite as their ERP system. Senior management of RAM Manufacturing wants to ensure that appropriate controls are used in the receiving department. Discuss some of the general control activities RAM Manufacturing may want to implement for receiving.

Choose from the list below the best control activity to prevent receiving products from unapproved vendors.

RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. RAM Manufacturing is considering purchasing and implementing an ERP system but has not yet chosen a vendor. Maeve, an accounts payable clerk, manually recorded a payment in the wrong vendor account and this eventually resulted in duplicate payments to the vendor. What control activity could be implemented to prevent this risk in the future?

The textbook discussed four of the stages of the Fixed Asset acquisitions process. Which stage corresponds to the following description? "In addition to the purchasing and payment journal entries, the fixed asset accountant ensures the fixed asset subsidiary ledger is updated."

The raw material purchasing reports can provide management with insight into how to improve processes. Additional raw materials purchasing analytics can be used for decision making and dashboards. Which raw material purchasing analytic describes how long it took to receive an order, quantity of goods received, and condition of goods received?

There are four departments in a company that are directly involved in the purchasing processes. Which department receives the vendor invoices?

The data collected during the accounts payable process can be converted into several accounts payable reports. Below is a list of some of those reports. Which report lists outstanding accounts payable balances, which can be summarized by vendor?

In which financial statement is a line item for inventory found?

The 3-way match takes documents from 3 departments and matches them before paying a vendor invoice. Choose from the list below one of the departments a document should be received from by accounts payable to perform the match.