Exam 10: Purchasing and Payments Process

RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. Maeve, an accounts payable analyst, is performing a three-way match before issuing payments to the vendors. RAM Manufacturing recently went live with NetSuite as their ERP system. However, they have not yet started using the receiving system and use Microsoft Excel to track receipts. Therefore, Maeve must match the combined purchase order and invoice with a separate spreadsheet that has the receiving report data. Purchase and invoice data: Receiving report spreadsheet: Do all the invoices pass the three-way match? If not, explain why.

Choose from the list below the best control activity to prevent unauthorized changes to the vendor table that may result in fraudulent purchases or loss of financial assets.

Raw materials are purchased from a seller, called a supplier or vendor. While the terms "supplier" and "vendor" may sound interchangeable, there's a subtle difference between them. Briefly describe the differences between suppliers and vendors.

Bid rigging and kickbacks create unfair and uncompetitive bidding processes which may result in financial losses due to paying higher prices in the absence of competition. Choose the best control activity to address this risk.

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 discount terms given, discounts taken, and discounts forfeited?

Numerous departments are involved in the purchases and payments processes. Choose from the list below one of the departments that is involved in the purchases and payments processes.

Choose from the list below the best definition of Inventory management.

Numerous departments are involved in the fixed assets purchases and payments processes. Choose from the list below one of the departments that is involved in the fixed assets purchases and payments processes.

Capitalizing items that are not fixed assets may result in inflated net income and assets, financial statement misstatements, fines and penalties, or reputational damage. Choose the best control activity to address this risk.

Capitalizing items that are not fixed assets may result in inflated net income and assets, financial statement misstatements, fines and penalties, or reputational damage. Choose the best control activity to address this risk.

Payments recorded in the wrong vendor account may result in duplicate payments to vendors. Choose the best control activity to address this risk.

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 calculates purchasing ratios, such as accounts payable turnover days, purchasing to sales, and purchases growth to sales growth?

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.

Choose from the list below the best control activity to prevent blanket purchase orders that may result in excessive purchases.

Numerous departments are involved in the fixed assets purchases and payments processes. Choose from the list below one of the departments that is involved in the fixed assets purchases and payments processes.

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. RAM Manufacturing recently purchased a new laser marking machine for $27,500 and a used industrial strength lathe for $25,300. $1,950 worth of cleaning and maintenance was required to get the lathe ready for use. RAM Manufacturing took out an equipment loan for $40,000 and paid the remainder in cash. Record the journal entry.

Choose from the list below the best control activity to prevent purchase requisitions split into more than one purchase order to circumvent authorized limits that may result in unauthorized or fraudulent purchases.

The textbook discussed four of the stages of the Fixed Asset acquisitions process. Which stage corresponds to the following description? "The accounting for a fixed asset occurs when the asset is recorded."

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.

Review the diagram below: Which deliverable is C?