Question 1

Define just-in-time (JIT)inventory methods.

Accepted Answer

Just-in-time (JIT)is another inventory management technique that minimizes or eliminates carrying and stockout costs by having deliveries made in quantities and at the time needed for production based on customer demand.

Question 2

Which of the following is generally not shown on a receiving report?

Accepted Answer

A) price of the items 
B) quantity of the items 
C) purchase order number 
D) counted and inspected by 
A) price of the items 
B) quantity of the items 
C) purchase order number 
D) counted and inspected by A

Question 3

The first major business activity in the expenditure cycle is ordering inventory and supplies.The traditional approach to management of inventory to ensure sufficient inventory to maintain production is known as

Accepted Answer

A) safety stock. 
B) just-in-time production. 
C) economic order quantity. 
D) optimal inventory quantity. 
A) safety stock. 
B) just-in-time production. 
C) economic order quantity. 
D) optimal inventory quantity. C

Question 4

Vendor invoices are approved by the __________,which reports to the __________.

Accepted Answer

A) purchasing department; controller 
B) accounts payable department; treasurer 
C) purchasing department; treasurer 
D) accounts payable department; controller 
A) purchasing department; controller 
B) accounts payable department; treasurer 
C) purchasing department; treasurer 
D) accounts payable department; controller

Question 5

Double-checking the accuracy of an invoice is an applicable control that can help to neutralize a threat in the expenditure cycle.What process or activity would specifically be associated with this control?

Accepted Answer

A) order goods 
B) receive and store goods 
C) pay for goods and services 
D) general issues 
A) order goods 
B) receive and store goods 
C) pay for goods and services 
D) general issues

Question 6

EOQ includes several variables that must be taken into consideration when calculating the optimal order size.One variable,the costs associated with holding inventory,is referred to as

Accepted Answer

A) ordering costs. 
B) carrying costs. 
C) the reorder point. 
D) stockout costs. 
A) ordering costs. 
B) carrying costs. 
C) the reorder point. 
D) stockout costs.

Question 7

The disbursement voucher and supporting documents are sent to the __________ for payment prior to the due date.

Accepted Answer

A) cashier 
B) treasurer 
C) controller 
D) accounts payable department 
A) cashier 
B) treasurer 
C) controller 
D) accounts payable department

Question 8

Procurement cards differ from corporate credit cards in which of the following ways?

Accepted Answer

A) Credit limits can be set for procurement cards,but not corporate credit cards. 
B) Credit cards can be used to make purchases without an explicit sign off by supervisors,but procurement cards require a sign off. 
C) Procurement cards can only be used with approved vendors,but credit cards can be used anywhere. 
D) Procurement card invoices are sent separately for each card,whereas corporate credit cards are consolidated into a single invoice. 
A) Credit limits can be set for procurement cards,but not corporate credit cards. 
B) Credit cards can be used to make purchases without an explicit sign off by supervisors,but procurement cards require a sign off. 
C) Procurement cards can only be used with approved vendors,but credit cards can be used anywhere. 
D) Procurement card invoices are sent separately for each card,whereas corporate credit cards are consolidated into a single invoice.

Question 9

There are three basic activities in the expenditure cycle.One of the basic activities is the receiving and storage of goods,supplies,and services.What is the counterpart of this activity in the revenue cycle?

Accepted Answer

A) the sales order entry process 
B) the shipping function 
C) the cash collection activity 
D) the cash payments activity 
A) the sales order entry process 
B) the shipping function 
C) the cash collection activity 
D) the cash payments activity

Question 10

In the expenditure cycle,the primary external exchange of information occurs with

Accepted Answer

A) customers. 
B) suppliers. 
C) management. 
D) the audit committee. 
A) customers. 
B) suppliers. 
C) management. 
D) the audit committee.

Question 11

In the expenditure cycle,good control dictates that expenditures should be paid by check.This may not be feasible when minor purchases are made.To facilitate quick payment for minor purchases,a(n)__________ should be set up and maintained using __________.

Accepted Answer

A) special bank account; disbursement vouchers 
B) imprest fund; vouchers 
C) cash box; small denomination bills 
D) petty cash fund; procurement cards 
A) special bank account; disbursement vouchers 
B) imprest fund; vouchers 
C) cash box; small denomination bills 
D) petty cash fund; procurement cards

Question 12

MRP will be a preferred method over JIT when the

Accepted Answer

A) demand for inventory is fairly predictable. 
B) demand for inventory is mostly unpredictable. 
C) product has a short life cycle. 
D) None of the above are correct. 
A) demand for inventory is fairly predictable. 
B) demand for inventory is mostly unpredictable. 
C) product has a short life cycle. 
D) None of the above are correct.

Question 13

Which of the following threats is not specific to the purchase requisition process of the expenditure cycle?

Accepted Answer

A) stockouts 
B) purchasing from unauthorized vendors 
C) requisitioning goods not needed 
D) All of the above are threats in the purchase requisition process. 
A) stockouts 
B) purchasing from unauthorized vendors 
C) requisitioning goods not needed 
D) All of the above are threats in the purchase requisition process.

Question 14

Define the materials requirement planning (MRP)

Accepted Answer

Materials requirements planning (MRP)is

Question 15

Which of the following is not an advantage of a voucher system?

Accepted Answer

A) several invoices may be included on one voucher,reducing the number of checks 
B) disbursement vouchers may be pre-numbered and tracked through the system 
C) the time of voucher approval and payment can be kept separate 
D) it is a less expensive and easier system to administer than other systems 
A) several invoices may be included on one voucher,reducing the number of checks 
B) disbursement vouchers may be pre-numbered and tracked through the system 
C) the time of voucher approval and payment can be kept separate 
D) it is a less expensive and easier system to administer than other systems

Question 16

A surprise count of petty cash by the auditor should find the total of __________ equal to the amount authorized for the fund.

Accepted Answer

A) cash and credit memos 
B) cash and petty cash vouchers 
C) cash 
D) cash and checks 
A) cash and credit memos 
B) cash and petty cash vouchers 
C) cash 
D) cash and checks

Question 17

Briefly discuss the differences among EOQ,MRP,and JIT.

Accepted Answer

Economic Order Quantity (EOQ)is the trad

Question 18

There is a symmetrical interdependence between a firm's revenue cycle and its customers'

Accepted Answer

A) production cycle. 
B) revenue cycle. 
C) expenditure cycle. 
D) general ledger and reporting system. 
A) production cycle. 
B) revenue cycle. 
C) expenditure cycle. 
D) general ledger and reporting system.

Question 19

The purchasing manager at Folding Squid Technologies has responsibility for reviewing and authorizing purchase orders.Receiving reports are prepared by shipping and receiving based on the relevant purchase order(s).Purchase orders,receiving reports,and vendor invoices are reconciled by accounts payable,which authorizes payment.Which of the following would correct control weaknesses,if any,related to these activities?

Accepted Answer

A) Vendor invoices should be reviewed by the purchasing manager to ensure that they are correct. 
B) Accounts payable should authorize purchase orders. 
C) Receiving reports should be reviewed and corrected by the purchasing manager. 
D) Controls are adequate under the current system. 
A) Vendor invoices should be reviewed by the purchasing manager to ensure that they are correct. 
B) Accounts payable should authorize purchase orders. 
C) Receiving reports should be reviewed and corrected by the purchasing manager. 
D) Controls are adequate under the current system.

Question 20

The decision of when to place an order in a traditional inventory system is specified by the

Accepted Answer

A) company inventory policies. 
B) economic order quantity. 
C) stockout point. 
D) reorder point. 
A) company inventory policies. 
B) economic order quantity. 
C) stockout point. 
D) reorder point.

Define just-in-time (JIT)inventory methods.

Which of the following is generally not shown on a receiving report?

The first major business activity in the expenditure cycle is ordering inventory and supplies.The traditional approach to management of inventory to ensure sufficient inventory to maintain production is known as

Vendor invoices are approved by the ,which reports to the .

Double-checking the accuracy of an invoice is an applicable control that can help to neutralize a threat in the expenditure cycle.What process or activity would specifically be associated with this control?

EOQ includes several variables that must be taken into consideration when calculating the optimal order size.One variable,the costs associated with holding inventory,is referred to as

The disbursement voucher and supporting documents are sent to the __________ for payment prior to the due date.

Procurement cards differ from corporate credit cards in which of the following ways?

There are three basic activities in the expenditure cycle.One of the basic activities is the receiving and storage of goods,supplies,and services.What is the counterpart of this activity in the revenue cycle?

In the expenditure cycle,the primary external exchange of information occurs with

In the expenditure cycle,good control dictates that expenditures should be paid by check.This may not be feasible when minor purchases are made.To facilitate quick payment for minor purchases,a(n) should be set up and maintained using .

MRP will be a preferred method over JIT when the

Which of the following threats is not specific to the purchase requisition process of the expenditure cycle?

Define the materials requirement planning (MRP)

Which of the following is not an advantage of a voucher system?

A surprise count of petty cash by the auditor should find the total of __________ equal to the amount authorized for the fund.

Briefly discuss the differences among EOQ,MRP,and JIT.

There is a symmetrical interdependence between a firm's revenue cycle and its customers'

The decision of when to place an order in a traditional inventory system is specified by the

Accounting Information Systems

Overview of Business Processes

Systems Development and Documentation Techniques

Relational Databases

Computer Fraud and Security

Control and Accounting Information Systems

Infromation System Controls for Systems Reliability

Auditing Computer-Based Information Systems

Auditing Computer-Based Informtion Systems

The Revenue Cycle: Sales an Cash Collections

The Production Cycle

The Human Resources Managementpayroll Cycle

General Ledger and Reporting System

Data Modeling and Database Design

Implementing an Rea Model in a Relational Database

Special Topics in Rea Modeling

Introduction to Systems Development and Systems Analysis

Ais Development Strategies

Systems Design, Implementation and Operation

Filters

Exam 11: The Expenditure Cycle: Purchasing and Cash Disbursements

Define just-in-time (JIT)inventory methods.

Which of the following is generally not shown on a receiving report?

The first major business activity in the expenditure cycle is ordering inventory and supplies.The traditional approach to management of inventory to ensure sufficient inventory to maintain production is known as

Vendor invoices are approved by the __________,which reports to the __________.

Double-checking the accuracy of an invoice is an applicable control that can help to neutralize a threat in the expenditure cycle.What process or activity would specifically be associated with this control?

EOQ includes several variables that must be taken into consideration when calculating the optimal order size.One variable,the costs associated with holding inventory,is referred to as

The disbursement voucher and supporting documents are sent to the __________ for payment prior to the due date.

Procurement cards differ from corporate credit cards in which of the following ways?

There are three basic activities in the expenditure cycle.One of the basic activities is the receiving and storage of goods,supplies,and services.What is the counterpart of this activity in the revenue cycle?

In the expenditure cycle,the primary external exchange of information occurs with

In the expenditure cycle,good control dictates that expenditures should be paid by check.This may not be feasible when minor purchases are made.To facilitate quick payment for minor purchases,a(n)__________ should be set up and maintained using __________.

MRP will be a preferred method over JIT when the

Which of the following threats is not specific to the purchase requisition process of the expenditure cycle?

Define the materials requirement planning (MRP)

Which of the following is not an advantage of a voucher system?

A surprise count of petty cash by the auditor should find the total of __________ equal to the amount authorized for the fund.

Briefly discuss the differences among EOQ,MRP,and JIT.

There is a symmetrical interdependence between a firm's revenue cycle and its customers'

The decision of when to place an order in a traditional inventory system is specified by the

Accounting Information Systems

Overview of Business Processes

Systems Development and Documentation Techniques

Relational Databases

Computer Fraud and Security

Control and Accounting Information Systems

Infromation System Controls for Systems Reliability

Auditing Computer-Based Information Systems

Auditing Computer-Based Informtion Systems

The Revenue Cycle: Sales an Cash Collections

The Production Cycle

The Human Resources Managementpayroll Cycle

General Ledger and Reporting System

Data Modeling and Database Design

Implementing an Rea Model in a Relational Database

Special Topics in Rea Modeling

Introduction to Systems Development and Systems Analysis

Ais Development Strategies

Systems Design, Implementation and Operation

Filters

Vendor invoices are approved by the ,which reports to the .

In the expenditure cycle,good control dictates that expenditures should be paid by check.This may not be feasible when minor purchases are made.To facilitate quick payment for minor purchases,a(n) should be set up and maintained using .