A) is used to update the actual cost inventory ledger B) accompanies the goods to the storeroom C) is sent to general ledger D) is returned to the vendor to acknowledge receipt of the goods A) is used to update the actual cost inventory ledger B) accompanies the goods to the storeroom C) is sent to general ledger D) is returned to the vendor to acknowledge receipt of the goods

Exam 5: The Expenditure Cycle Part I: Purchases and Cash Disbursements Procedures

What are the major differences between a basic technology purchasing system and an integrated purchases processing system?

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Question 1

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The level of departmental activity is significantly lower in an integrated system.Computer programs perform many clerical tasks.This arrangement is cheaper and less prone to error.Personnel responsibilities are refocused on financial analysis and exception-based problem solving,resulting in smaller and more efficient departments.

In a firm with proper segregation of duties,adequate supervision is most critical in

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Question 2

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The Soap Manufacturing Company has three employees who work in the warehouse.All of the warehouse workers are authorized to order inventory when it falls below the reorder level.The workers complete a purchase order and mail it to the supplier of their choice.The inventory is delivered directly to the warehouse.The workers send a memo to accounts payable reporting the receipt of inventory. Accounts payable compares the warehouse memo to the supplier's invoice.Accounts payable prepares a check which the treasurer signs. Discuss potential internal control risks inherent in this system.

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Question 3

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Placing this much authority in the hands of the warehouse workers can result in inappropriate inventory levels-too much inventory ties up cash reserves,too little can lead to manufacturing delays or lost sales.Such worker empowerment facilitates frauds (such as kickbacks from unapproved suppliers)or fraudulent transactions (because workers both perform record-keeping and have physical custody of the assets).
Warehouse workers should prepare a purchase requisition and send it to purchasing to prepare the PO.
Inventory should be delivered to the receiving department where a receiving report is prepared using a blind copy of the original PO.
Accounts payable should receive a copy of the purchase requisition,PO,and receiving report and compare them to the supplier invoice.Cash disbursements,not AP,should prepare the check.

One reason for authorizing purchases is to enable efficient inventory management.

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Question 4

What are some of the risks of placing the decision of what,when,and where to buy solely at the discretion of the purchasing agent?

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Question 5

The level of departmental activity is higher with an integrated purchases processing system than it is with a basic technology system.

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Question 6

The general ledger function receives the AP account summary from cash disbursements.

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Question 7

Identify six classes of physical controls employed in the expenditure cycle and give one example of each.

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Question 8

Authorization of purchases in a merchandising firm occurs in the production planning and control department.

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Question 9

Goods received are inspected and counted to

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Question 10

Why do companies devote resources to a purchasing department? Could not individual departments make their own purchases more efficiently?

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Question 11

A copy of the purchase order (PO)is sent to the

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Question 12

The accounts payable department reconciles the accounts payable subsidiary ledger to the control account.

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Question 13

The blind copy of the purchase order that goes to the receiving department contains no item descriptions.

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Question 14

Describe four tasks the accounts payable department computer application performs automatically in the integrated purchases processing system.

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Question 15

If a company uses an actual cost system,inventory records can first be updated from the

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Question 16

Permitting warehouse staff to maintain the only inventory records violates separation of duties.

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Question 17

Explain the role that the GL plays in reducing the risk of inaccurately recording transactions in journals and ledgers.

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Question 18

Authorization for payment of an accounts payable liability is the responsibility of

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Question 19

The receiving report

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Question 20

Showing 1 - 20 of 110

What are the major differences between a basic technology purchasing system and an integrated purchases processing system?

In a firm with proper segregation of duties,adequate supervision is most critical in

One reason for authorizing purchases is to enable efficient inventory management.

What are some of the risks of placing the decision of what,when,and where to buy solely at the discretion of the purchasing agent?

The level of departmental activity is higher with an integrated purchases processing system than it is with a basic technology system.

The general ledger function receives the AP account summary from cash disbursements.

Identify six classes of physical controls employed in the expenditure cycle and give one example of each.

Authorization of purchases in a merchandising firm occurs in the production planning and control department.

Goods received are inspected and counted to

Why do companies devote resources to a purchasing department? Could not individual departments make their own purchases more efficiently?

A copy of the purchase order (PO)is sent to the

The accounts payable department reconciles the accounts payable subsidiary ledger to the control account.

The blind copy of the purchase order that goes to the receiving department contains no item descriptions.

Describe four tasks the accounts payable department computer application performs automatically in the integrated purchases processing system.

If a company uses an actual cost system,inventory records can first be updated from the

Permitting warehouse staff to maintain the only inventory records violates separation of duties.

Explain the role that the GL plays in reducing the risk of inaccurately recording transactions in journals and ledgers.

Authorization for payment of an accounts payable liability is the responsibility of

The receiving report

The Information System: an Accountants Perspective

Introduction to Transaction Processing

Ethics,fraud,and Internal Control

The Revenue Cycle

The Expenditure Cycle Part II: Payroll Processing and Fixed Asset Procedures

The Conversion Cycle

Financial Reporting,and Management Reporting Systems

Database Management Systems

The Rea Approach to Business Process Modeling

Enterprise Resource Planning Systems

Electronic Commerce Systems

Managing the Systems Development Life Cycle

Auditing It Controls Part I: Sarbanes-Oxley and It Governance

Auditing It Controls Part II: Security and Access

Auditing It Controls Part III: Systems Development, program Changes, and Application Auditing

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