Question 1

Which of the following actions result from the disbursement of cash for payment in the purchasing process?

Accepted Answer

A)  Creation of the vendor invoice file. 
B)  Creation of a new record in the cash disbursement file. 
C)  Closing of the open sales order file record. 
D)  Closing of the receiving transaction file record. 
A)  Creation of the vendor invoice file. 
B)  Creation of a new record in the cash disbursement file. 
C)  Closing of the open sales order file record. 
D)  Closing of the receiving transaction file record.

Question 2

Which of the following is true about retainages?

Accepted Answer

A)  Most organizations, with the exception of construction contractors, must have retainages. 
B)  Most organizations have this feature in its payables module. 
C)  Retainages are more applicable to payables than to receivables. 
D)  Retainages provide additional assurance that an agreed upon task will be completed. 
A)  Most organizations, with the exception of construction contractors, must have retainages. 
B)  Most organizations have this feature in its payables module. 
C)  Retainages are more applicable to payables than to receivables. 
D)  Retainages provide additional assurance that an agreed upon task will be completed.

Question 3

Petty cash limits often tend to be higher in small organizations than they are in large, well-run organizations.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is true?

Accepted Answer

A)  Petty cash limits tend to smaller in small organizations and higher in larger organizations. 
B)  Actual disbursement of cash is the responsibility of the accounts payable department. 
C)  Cash disbursements to a vendor may not be made from petty cash. 
D)  It is not wise to "net out" a payable to and a receivable from a trading partner. 
A)  Petty cash limits tend to smaller in small organizations and higher in larger organizations. 
B)  Actual disbursement of cash is the responsibility of the accounts payable department. 
C)  Cash disbursements to a vendor may not be made from petty cash. 
D)  It is not wise to "net out" a payable to and a receivable from a trading partner.

Question 5

When is a cash requirements forecast prepared?

Accepted Answer

A)  After invoices have been approved for payment 
B)  After a schedule of aged accounts payable has been prepared 
C)  Before a schedule of aged accounts payable has been prepared 
D)  At regular intervals 
A)  After invoices have been approved for payment 
B)  After a schedule of aged accounts payable has been prepared 
C)  Before a schedule of aged accounts payable has been prepared 
D)  At regular intervals

Question 6

Which of the following is TRUE regarding the segregation of duties in the purchasing process?

Accepted Answer

A)  The authority to approve disbursement vouchers should be separate from the authority to sign checks. 
B)  Segregation of computerized functions can be attained through the use of passwords, file/record locks, and designated terminal access. 
C)  The password system allows a receiving clerk to read, but not write to, an open purchase order. 
D)  All of the above are true regarding the segregation of duties in the purchasing process. 
A)  The authority to approve disbursement vouchers should be separate from the authority to sign checks. 
B)  Segregation of computerized functions can be attained through the use of passwords, file/record locks, and designated terminal access. 
C)  The password system allows a receiving clerk to read, but not write to, an open purchase order. 
D)  All of the above are true regarding the segregation of duties in the purchasing process.

Question 7

Which of the following represent batch controls for the processing of purchase orders?

Accepted Answer

A)  Control totals. 
B)  Record counts. 
C)  Hash totals. 
D)  All of the above are batch controls that would be used in the processing of purchase orders. 
A)  Control totals. 
B)  Record counts. 
C)  Hash totals. 
D)  All of the above are batch controls that would be used in the processing of purchase orders.

Question 8

What is the most voluminous task in the purchasing process?

Accepted Answer

A)  Accounts payable data entry 
B)  Purchase order data entry 
C)  Cash payments data entry 
D)  Receiving data entry 
A)  Accounts payable data entry 
B)  Purchase order data entry 
C)  Cash payments data entry 
D)  Receiving data entry

Question 9

Which of the following initiates a bidding situation among suppliers?

Accepted Answer

A)  Request for quotation; request for proposal 
B)  Request for bid response; request for quotation 
C)  Request for deliverables; request for quotation 
D)  Request for proposal; request for bid response 
A)  Request for quotation; request for proposal 
B)  Request for bid response; request for quotation 
C)  Request for deliverables; request for quotation 
D)  Request for proposal; request for bid response

Question 10

An organization must have a regular schedule for making payments of invoices. Which are criteria for selection of invoices for payment?

Accepted Answer

A)  Select all invoices coming due on or before a specified date 
B)  Select all invoices with a specified vendor 
C)  All of the above 
D)  None of the above 
A)  Select all invoices coming due on or before a specified date 
B)  Select all invoices with a specified vendor 
C)  All of the above 
D)  None of the above

Question 11

Which of the following is not correct with regard to goods and services?

Accepted Answer

A)  Goods and services do not include services provided by the organization's employees as these are not external goods or services. 
B)  Goods and services are purchased to meet an organization's needs. 
C)  In recent years, considerable debate has brewed over how much competition organizations should foster among their vendors. 
D)  While organizations commonly use only one accounting firm, they have traditionally dealt with larger numbers of raw materials and merchandise vendors. 
A)  Goods and services do not include services provided by the organization's employees as these are not external goods or services. 
B)  Goods and services are purchased to meet an organization's needs. 
C)  In recent years, considerable debate has brewed over how much competition organizations should foster among their vendors. 
D)  While organizations commonly use only one accounting firm, they have traditionally dealt with larger numbers of raw materials and merchandise vendors.

Question 12

Why are audit trails for the purchasing process somewhat more complicated than those for the revenue process?

Accepted Answer

A)  The revenue process involves the revenue recognition principle. 
B)  The purchasing process usually includes only a single journal entry and, therefore, provides inadequate support. 
C)  The purchasing process may involve two journal entries often made at difference times. 
D)  The revenue process is vulnerable to errors when posting from the cash receipts journal. 
A)  The revenue process involves the revenue recognition principle. 
B)  The purchasing process usually includes only a single journal entry and, therefore, provides inadequate support. 
C)  The purchasing process may involve two journal entries often made at difference times. 
D)  The revenue process is vulnerable to errors when posting from the cash receipts journal.

Question 13

Describe output controls typically found in the purchasing process.

Accepted Answer

Output controls typically found in the p

Question 14

In most accounting information systems, the purchasing function is represented by two modules: purchase order and receiving, sometimes referred to as the vendor module.

Accepted Answer

A) True 
 B)False

Question 15

Discuss the typical authorization controls one would expect to find in the purchasing process in information processing.

Accepted Answer

Proper authorization is needed to initia

Question 16

Which of the following is false regarding the accounts payable module?

Accepted Answer

A)  Single checks issued by a company are referred to as manual checks. 
B)  A batch of checks may be posted after a proof list is prepared. 
C)  Printing batches of checks is an efficient way of issuing checks. 
D)  Posting may be invoked several times a day. 
A)  Single checks issued by a company are referred to as manual checks. 
B)  A batch of checks may be posted after a proof list is prepared. 
C)  Printing batches of checks is an efficient way of issuing checks. 
D)  Posting may be invoked several times a day.

Question 17

Because purchase orders are not completed transactions, they do not need to be stored in a file.

Accepted Answer

A) True 
 B)False

Question 18

A listing of the cash disbursements transactions file is referred to as the cash disbursements journal, or check register.

Accepted Answer

A) True 
 B)False

Question 19

An organization should compare the vendor's invoice with the purchase order data and the open invoice file.

Accepted Answer

A) True 
 B)False

Question 20

Explain why an analysis of vendor performance is an important control in the purchase function.

Accepted Answer

Consistent and regular review of vendor

Which of the following actions result from the disbursement of cash for payment in the purchasing process?

Which of the following is true about retainages?

Petty cash limits often tend to be higher in small organizations than they are in large, well-run organizations.

Which of the following statements is true?

When is a cash requirements forecast prepared?

Which of the following is TRUE regarding the segregation of duties in the purchasing process?

Which of the following represent batch controls for the processing of purchase orders?

What is the most voluminous task in the purchasing process?

Which of the following initiates a bidding situation among suppliers?

An organization must have a regular schedule for making payments of invoices. Which are criteria for selection of invoices for payment?

Which of the following is not correct with regard to goods and services?

Why are audit trails for the purchasing process somewhat more complicated than those for the revenue process?

Describe output controls typically found in the purchasing process.

In most accounting information systems, the purchasing function is represented by two modules: purchase order and receiving, sometimes referred to as the vendor module.

Discuss the typical authorization controls one would expect to find in the purchasing process in information processing.

Which of the following is false regarding the accounts payable module?

Because purchase orders are not completed transactions, they do not need to be stored in a file.

A listing of the cash disbursements transactions file is referred to as the cash disbursements journal, or check register.

An organization should compare the vendor's invoice with the purchase order data and the open invoice file.

Explain why an analysis of vendor performance is an important control in the purchase function.

Significance of Accounting Information Systems and the Accountants Role

Accounting Systems Documentation

Essential Elements and Basic Activities of Accounting Systems

Data Flows, Activities, and Structure of Accounting Systems

Reporting Process, Coding Methods, and Audit Trails

Internal Control and Risk Assessment

Control Activities

The Financial Process

The Revenue Process

The Inventory Process

Database Structure of Accounting Systems

Developing a Relational Database for an Accounting Information System

Electronic Business

Ais Selection and Implementation

Filters

Exam 10: The Purchasing Process

Which of the following actions result from the disbursement of cash for payment in the purchasing process?

Which of the following is true about retainages?

Petty cash limits often tend to be higher in small organizations than they are in large, well-run organizations.

Which of the following statements is true?

When is a cash requirements forecast prepared?

Which of the following is TRUE regarding the segregation of duties in the purchasing process?

Which of the following represent batch controls for the processing of purchase orders?

What is the most voluminous task in the purchasing process?

Which of the following initiates a bidding situation among suppliers?

An organization must have a regular schedule for making payments of invoices. Which are criteria for selection of invoices for payment?

Which of the following is not correct with regard to goods and services?

Why are audit trails for the purchasing process somewhat more complicated than those for the revenue process?

Describe output controls typically found in the purchasing process.

In most accounting information systems, the purchasing function is represented by two modules: purchase order and receiving, sometimes referred to as the vendor module.

Discuss the typical authorization controls one would expect to find in the purchasing process in information processing.

Which of the following is false regarding the accounts payable module?

Because purchase orders are not completed transactions, they do not need to be stored in a file.

A listing of the cash disbursements transactions file is referred to as the cash disbursements journal, or check register.

An organization should compare the vendor's invoice with the purchase order data and the open invoice file.

Explain why an analysis of vendor performance is an important control in the purchase function.

Significance of Accounting Information Systems and the Accountants Role

Accounting Systems Documentation

Essential Elements and Basic Activities of Accounting Systems

Data Flows, Activities, and Structure of Accounting Systems

Reporting Process, Coding Methods, and Audit Trails

Internal Control and Risk Assessment

Control Activities

The Financial Process

The Revenue Process

The Inventory Process

Database Structure of Accounting Systems

Developing a Relational Database for an Accounting Information System

Electronic Business

Ais Selection and Implementation

Filters