Deck 11: Acquestion Payment Process

Question 1

Which of the following best explains the difference between a purchase order and a purchase requisition?

A) Purchase orders contain quantities of merchandise to order; purchase requisitions do not.
B) Purchase requisitions contain suggested vendor names; purchase orders do not.
C) Several purchase orders might be consolidated on a single purchase requisition.
D) Purchase requisitions do not contain the "cost per unit," but purchase orders do.

Answer 1

D

Question 2

The second step in the acquisition/payment process:

A) Promotes good internal control.
B) Ensures that no fraud can happen in the process.
C) Does not involve information technology.
D) Establishes that the balance sheet is accurate.

Answer 2

A

Question 3

"Purchase goods/services" is the __ step in the acquisition/payment process.

A) First.
B) Second.
C) Third.
D) Last.

Answer 3

C

Question 4

The vendor's name and address would appear on all the following documents except:

A) Purchase order.
B) Vendor invoice.
C) Check.
D) Purchase requisition.

Question 5

The purchasing department is most closely associated with which of the following steps in the acquisition/payment process?

A) Six.
B) Five.
C) Four.
D) Three.

Question 6

In a well organized acquisition/payment process, the vendor handles: (i) purchase orders, (ii) invoices, (iii) checks.

A) i and ii only.
B) ii and iii only.
C) i and iii only.
D) i, ii and iii.

Question 7

Which of the following steps in the acquisition/payment process occurs first?

A) Purchase goods and services.
B) Authorize purchases.
C) Disburse cash.
D) Process purchase returns.

Question 8

A sequentially-numbered document contains the following: "Purchase twenty reams of paper from XYZ Corporation at a cost of $15/ream." The document could be:

A) A purchase requisition.
B) A purchase order.
C) A vendor invoice.
D) A receiving report.

Question 9

ACB Corporation's purchasing department sent a copy of a purchase order to the receiving department. Which of the following statements is most true?

A) The purchase order sent to receiving should be identical to the purchase order sent to the b. vendor.
B) The receiving department should not have a copy of the purchase order.
C) The copy sent to receiving should not be sequentially numbered.
D) The receiving department's copy will strengthen internal control if properly prepared.

Question 10

Marie paid a vendor's invoice after matching it against a purchase order. Which of the following statements is most true?

A) Marie's actions demonstrate the strongest possible internal control over the payment process.
B) Marie's actions weakened internal control for her company.
C) Marie's actions weakened internal control for the vendor.
D) The bank should not honor Marie's check.

Question 11

Step Five in the acquisition/payment process outlined in the text is completed by the ___A. Accounting.

A) department.
B) Purchasing.
C) Receiving.
D) Warehouse.

Question 12

The document that requests the purchasing department order goods from a vendor is:

A) Purchase requisition.
B) Purchase order.
C) Budget.
D) Receiving report.

Question 13

In a well organized acquisition/payment process, the purchasing department handles: (i) purchase orders, (ii) purchase requisitions, (iii) vendor invoices.

A) i and ii only.
B) ii and iii only.
C) i and iii only.
D) i, ii and iii.

Question 14

The following scenario applies to Questions:
Hall's Office Supplies is a small store in a rural area of the United States; Ian Hall is the owner. The store also employs three purchasing agents and an accountant. While the purchasing agents handle day-to-day inventory purchases, Ian makes all large purchases (equipment, furniture and computers, for example) himself. Each purchasing agent is responsible for purchasing a specific group of inventory items; for example, one purchasing agent handles all purchases of computer-related supplies (mouse pads, compact discs). Each purchasing agent uses his/her best judgment when deciding how much and how often to order inventory items. When inventory and other items arrive at the store, the relevant purchasing agent checks it in and puts it in the stockroom. Vendors send invoices directly to the accountant, who pays them within thirty days and reconciles the bank statement at least monthly. Ian works as a salesperson Monday through Friday from 8 a.m. to 5 p.m.;
he is assisted by two half-time sales staff. One staff person works from 8 a.m. to 12 noon, while the other works from 1 p.m. to 5 p.m. The part-time staff is in charge of keeping the shelves stocked. Hall's Office Supplies maintains a manual accounting information system, and retains copies of all documents for one year.
To achieve strong internal control, __ should prepare a bank reconciliation at least monthly.

A) The accountant.
B) One of the half-time sales staff.
C) A purchasing agent.
D) Ian.

Question 15

The acquisition/payment process begins by:

A) Choosing a software package.
B) Pre-numbering purchase orders.
C) Establishing an economic order quantity for each inventory item.
D) Requesting goods and services based on monitored need.

Question 16

ACB Corporation's purchasing department sent a copy of a purchase order to the receiving department. The copy will promote strong internal control with all of the following except:

A) The expected quantity of goods to receive.
B) The vendor's name and address.
C) A description of the goods to be received.
D) The name of the shipping company used.

Question 17

Which of the following departments could initiate a purchase requisition: (i) accounting, (ii) receiving?

A) i only.
B) ii only.
C) Both i and ii.
D) Neither i nor ii.

Question 18

When properly designed and completed, which of the following steps in the acquisition/payment process promote strong internal control: (i) authorize a purchase, (ii) receive goods and services?

A) i only.
B) ii only.
C) Both i and ii.
D) Neither i nor ii.

Question 19

The receiving department is most closely associated with which step in the acquisition/payment process?

A) One.
B) Three.
C) Four.
D) Six.

Question 20

Which step in the acquisition/payment process immediately follows "purchase goods/services?"

A) Disburse cash.
B) Receive goods/services.
C) Update inventory records.
D) Make journal entries.

Question 21

The following scenario applies to Questions:
Hall's Office Supplies is a small store in a rural area of the United States; Ian Hall is the owner. The store also employs three purchasing agents and an accountant. While the purchasing agents handle day-to-day inventory purchases, Ian makes all large purchases (equipment, furniture and computers, for example) himself. Each purchasing agent is responsible for purchasing a specific group of inventory items; for example, one purchasing agent handles all purchases of computer-related supplies (mouse pads, compact discs). Each purchasing agent uses his/her best judgment when deciding how much and how often to order inventory items. When inventory and other items arrive at the store, the relevant purchasing agent checks it in and puts it in the stockroom. Vendors send invoices directly to the accountant, who pays them within thirty days and reconciles the bank statement at least monthly. Ian works as a salesperson Monday through Friday from 8 a.m. to 5 p.m.;
he is assisted by two half-time sales staff. One staff person works from 8 a.m. to 12 noon, while the other works from 1 p.m. to 5 p.m. The part-time staff is in charge of keeping the shelves stocked. Hall's Office Supplies maintains a manual accounting information system, and retains copies of all documents for one year.
Serially-numbered documents can be an important form of internal control. Which document(s) in the preceding scenario should be serially numbered: (i) vendor invoices, (ii) checks?

A) i only.
B) ii only.
C) Both i and ii.
D) Neither i nor ii.

Question 22

The following scenario applies to Questions:
Hall's Office Supplies is a small store in a rural area of the United States; Ian Hall is the owner. The store also employs three purchasing agents and an accountant. While the purchasing agents handle day-to-day inventory purchases, Ian makes all large purchases (equipment, furniture and computers, for example) himself. Each purchasing agent is responsible for purchasing a specific group of inventory items; for example, one purchasing agent handles all purchases of computer-related supplies (mouse pads, compact discs). Each purchasing agent uses his/her best judgment when deciding how much and how often to order inventory items. When inventory and other items arrive at the store, the relevant purchasing agent checks it in and puts it in the stockroom. Vendors send invoices directly to the accountant, who pays them within thirty days and reconciles the bank statement at least monthly. Ian works as a salesperson Monday through Friday from 8 a.m. to 5 p.m.;
he is assisted by two half-time sales staff. One staff person works from 8 a.m. to 12 noon, while the other works from 1 p.m. to 5 p.m. The part-time staff is in charge of keeping the shelves stocked. Hall's Office Supplies maintains a manual accounting information system, and retains copies of all documents for one year.
Which of the following internal controls would most effectively prevent inventory theft at Hall's Office Supplies?

A) Bonding the part-time sales staff.
B) Installing video surveillance equipment in the stockroom.
C) Counting all inventory on hand twice a day.
D) Requiring sales staff to put an inventory tag on all products over $100.

Question 23

The following scenario applies to Questions:
Hall's Office Supplies is a small store in a rural area of the United States; Ian Hall is the owner. The store also employs three purchasing agents and an accountant. While the purchasing agents handle day-to-day inventory purchases, Ian makes all large purchases (equipment, furniture and computers, for example) himself. Each purchasing agent is responsible for purchasing a specific group of inventory items; for example, one purchasing agent handles all purchases of computer-related supplies (mouse pads, compact discs). Each purchasing agent uses his/her best judgment when deciding how much and how often to order inventory items. When inventory and other items arrive at the store, the relevant purchasing agent checks it in and puts it in the stockroom. Vendors send invoices directly to the accountant, who pays them within thirty days and reconciles the bank statement at least monthly. Ian works as a salesperson Monday through Friday from 8 a.m. to 5 p.m.;
he is assisted by two half-time sales staff. One staff person works from 8 a.m. to 12 noon, while the other works from 1 p.m. to 5 p.m. The part-time staff is in charge of keeping the shelves stocked. Hall's Office Supplies maintains a manual accounting information system, and retains copies of all documents for one year.
Information technology can serve as an important form of internal control. Which of the following forms of information technology will ensure that Hall's Office Supplies has strong internal control: (i) general ledger software, (ii) relational database software?

A) i only.
B) ii only.
C) Both i and ii.
D) Neither i nor ii.

Question 24

A manager wants to develop a relational database to achieve stronger internal control in the acquisition/payment process. Which of the following would help the manager achieve that goal: (i) automatically numbering all purchase orders, (ii) requiring sales staff to enter a password before accessing the purchases table?

A) i only.
B) ii only.
C) both i and ii.
D) neither i nor ii.

Question 25

Richard wants to create a report that shows unpaid vendor invoices; he wants to organize the report by invoice date. Which form(s) of information technology could he use: (i) relational database, (ii) spreadsheet, (iii) general ledger?

A) i and ii only.
B) ii and iii only.
C) i and iii only.
D) i, ii and iii.

Question 26

The following scenario applies to Questions:
Hall's Office Supplies is a small store in a rural area of the United States; Ian Hall is the owner. The store also employs three purchasing agents and an accountant. While the purchasing agents handle day-to-day inventory purchases, Ian makes all large purchases (equipment, furniture and computers, for example) himself. Each purchasing agent is responsible for purchasing a specific group of inventory items; for example, one purchasing agent handles all purchases of computer-related supplies (mouse pads, compact discs). Each purchasing agent uses his/her best judgment when deciding how much and how often to order inventory items. When inventory and other items arrive at the store, the relevant purchasing agent checks it in and puts it in the stockroom. Vendors send invoices directly to the accountant, who pays them within thirty days and reconciles the bank statement at least monthly. Ian works as a salesperson Monday through Friday from 8 a.m. to 5 p.m.;
he is assisted by two half-time sales staff. One staff person works from 8 a.m. to 12 noon, while the other works from 1 p.m. to 5 p.m. The part-time staff is in charge of keeping the shelves stocked. Hall's Office Supplies maintains a manual accounting information system, and retains copies of all documents for one year.
The _____ and the _____ are in the best position to collaborate to steal inventory.

A) Accountant, sales staff.
B) Purchasing agents, sales staff.
C) Accountant, purchasing agents.
D) Accountant, vendor.

Question 27

In the acquisition/payment process, spreadsheet software would be least effective for:

A) Disbursing cash.
B) Monitoring inventory levels.
C) Tracking the status of purchase orders.
D) Comparing quantities purchased from two different vendors.

Question 28

RFID is: (i) a form of internal control, (ii) a document used in the acquisition/payment process.

A) i only.
B) ii only.
C) Both i and ii.
D) Neither i nor ii.

Question 29

Ashok wants to design a new purchase requisition for his company. Assuming he knows how to use all of the information technologies listed below, which should he use?

A) Relational database.
B) Enterprise resource planning.
C) Spreadsheet.
D) RFID.

Question 30

Bert and Rocky's is a small local ice cream shop in southern California. Their acquisition/payment process would benefit least from ___ software.

A) Enterprise resource planning.
B) Spreadsheet.
C) General ledger.
D) Relational database.

Question 31

The following scenario applies to Questions:
Hall's Office Supplies is a small store in a rural area of the United States; Ian Hall is the owner. The store also employs three purchasing agents and an accountant. While the purchasing agents handle day-to-day inventory purchases, Ian makes all large purchases (equipment, furniture and computers, for example) himself. Each purchasing agent is responsible for purchasing a specific group of inventory items; for example, one purchasing agent handles all purchases of computer-related supplies (mouse pads, compact discs). Each purchasing agent uses his/her best judgment when deciding how much and how often to order inventory items. When inventory and other items arrive at the store, the relevant purchasing agent checks it in and puts it in the stockroom. Vendors send invoices directly to the accountant, who pays them within thirty days and reconciles the bank statement at least monthly. Ian works as a salesperson Monday through Friday from 8 a.m. to 5 p.m.;
he is assisted by two half-time sales staff. One staff person works from 8 a.m. to 12 noon, while the other works from 1 p.m. to 5 p.m. The part-time staff is in charge of keeping the shelves stocked. Hall's Office Supplies maintains a manual accounting information system, and retains copies of all documents for one year.
Ian wants to do everything possible to save money in the store's operations. Based on the preceding scenario, he is least likely to be able to:

A) Take advantage of quantity discounts from vendors.
B) Take advantage of cash discounts for early payment of vendor invoices.
C) Minimize the space devoted to inventory storage.
D) Control salary costs.

Question 32

The following scenario applies to Questions:
Hall's Office Supplies is a small store in a rural area of the United States; Ian Hall is the owner. The store also employs three purchasing agents and an accountant. While the purchasing agents handle day-to-day inventory purchases, Ian makes all large purchases (equipment, furniture and computers, for example) himself. Each purchasing agent is responsible for purchasing a specific group of inventory items; for example, one purchasing agent handles all purchases of computer-related supplies (mouse pads, compact discs). Each purchasing agent uses his/her best judgment when deciding how much and how often to order inventory items. When inventory and other items arrive at the store, the relevant purchasing agent checks it in and puts it in the stockroom. Vendors send invoices directly to the accountant, who pays them within thirty days and reconciles the bank statement at least monthly. Ian works as a salesperson Monday through Friday from 8 a.m. to 5 p.m.;
he is assisted by two half-time sales staff. One staff person works from 8 a.m. to 12 noon, while the other works from 1 p.m. to 5 p.m. The part-time staff is in charge of keeping the shelves stocked. Hall's Office Supplies maintains a manual accounting information system, and retains copies of all documents for one year.
Internal controls in the acquisition/payment process would be strengthened if:

A) Ian allowed the purchasing agents to handle non-inventory purchases.
B) Ian received large purchases himself.
C) The accountant took over some responsibilities as a purchasing agent.
D) Ian opened a new location in a nearby city.

Question 33

The following scenario applies to Questions:
Hall's Office Supplies is a small store in a rural area of the United States; Ian Hall is the owner. The store also employs three purchasing agents and an accountant. While the purchasing agents handle day-to-day inventory purchases, Ian makes all large purchases (equipment, furniture and computers, for example) himself. Each purchasing agent is responsible for purchasing a specific group of inventory items; for example, one purchasing agent handles all purchases of computer-related supplies (mouse pads, compact discs). Each purchasing agent uses his/her best judgment when deciding how much and how often to order inventory items. When inventory and other items arrive at the store, the relevant purchasing agent checks it in and puts it in the stockroom. Vendors send invoices directly to the accountant, who pays them within thirty days and reconciles the bank statement at least monthly. Ian works as a salesperson Monday through Friday from 8 a.m. to 5 p.m.;
he is assisted by two half-time sales staff. One staff person works from 8 a.m. to 12 noon, while the other works from 1 p.m. to 5 p.m. The part-time staff is in charge of keeping the shelves stocked. Hall's Office Supplies maintains a manual accounting information system, and retains copies of all documents for one year.
Ian could achieve stronger internal control by enforcing separation of duties for:

A) Himself.
B) The purchasing agents.
C) The stockroom.
D) Vendors.

Question 34

BNC Corporation maintains a relational database system for its acquisition/payment process. To achieve strong internal control over the process:

A) The database should have at least three tables.
B) The database should be exported to a spreadsheet daily.
C) The database should be backed up monthly.
D) Purchasing agents should be required to enter a password before authorizing invoice payment.

Question 35

The following scenario applies to Questions:
Hall's Office Supplies is a small store in a rural area of the United States; Ian Hall is the owner. The store also employs three purchasing agents and an accountant. While the purchasing agents handle day-to-day inventory purchases, Ian makes all large purchases (equipment, furniture and computers, for example) himself. Each purchasing agent is responsible for purchasing a specific group of inventory items; for example, one purchasing agent handles all purchases of computer-related supplies (mouse pads, compact discs). Each purchasing agent uses his/her best judgment when deciding how much and how often to order inventory items. When inventory and other items arrive at the store, the relevant purchasing agent checks it in and puts it in the stockroom. Vendors send invoices directly to the accountant, who pays them within thirty days and reconciles the bank statement at least monthly. Ian works as a salesperson Monday through Friday from 8 a.m. to 5 p.m.;
he is assisted by two half-time sales staff. One staff person works from 8 a.m. to 12 noon, while the other works from 1 p.m. to 5 p.m. The part-time staff is in charge of keeping the shelves stocked. Hall's Office Supplies maintains a manual accounting information system, and retains copies of all documents for one year.
Adequate documentation can be an important form of internal control. Which document is missing from the store's acquisition/payment process: (i) purchase requisition, (ii) purchase order?

A) i only.
B) ii only.
C) Both i and ii.
D) Neither i nor ii.

Question 36

The following scenario applies to Questions:
Hall's Office Supplies is a small store in a rural area of the United States; Ian Hall is the owner. The store also employs three purchasing agents and an accountant. While the purchasing agents handle day-to-day inventory purchases, Ian makes all large purchases (equipment, furniture and computers, for example) himself. Each purchasing agent is responsible for purchasing a specific group of inventory items; for example, one purchasing agent handles all purchases of computer-related supplies (mouse pads, compact discs). Each purchasing agent uses his/her best judgment when deciding how much and how often to order inventory items. When inventory and other items arrive at the store, the relevant purchasing agent checks it in and puts it in the stockroom. Vendors send invoices directly to the accountant, who pays them within thirty days and reconciles the bank statement at least monthly. Ian works as a salesperson Monday through Friday from 8 a.m. to 5 p.m.;
he is assisted by two half-time sales staff. One staff person works from 8 a.m. to 12 noon, while the other works from 1 p.m. to 5 p.m. The part-time staff is in charge of keeping the shelves stocked. Hall's Office Supplies maintains a manual accounting information system, and retains copies of all documents for one year.
Weak internal controls would allow the accountant to: (i) pay for merchandise not received, (ii) steal money from Hall's Office Supplies, (iii) steal inventory.

A) i and ii only.
B) ii and iii only.
C) i and iii only.
D) i, ii and iii.

Question 37

In the acquisition/payment process, general ledger software can strengthen internal control by:

A) Requiring purchasing agents to change their passwords every six months.
B) Assigning a sequential number to each journal entry.
C) Making it easier for the cash disbursements clerk to complete a bank reconciliation.
D) Ensuring that document matching policies are enforced.

Question 38

Clients of American Hospital Supply can place all their orders online, thus eliminating the need for: (i) paper documents in the acquisition/payment process, (ii) periodic counts of inventory.

A) i only.
B) ii only.
C) both i and ii.
D) neither i nor ii.

Question 39

In the acquisition/payment process, bar coding can be most effectively used to:

A) Pay vendors online.
B) Eliminate the need for RFID.
C) Prevent the theft of inventory.
D) Monitor inventory levels.

Question 40

A flowchart of the acquisition/payment process includes three columns: purchasing department, receiving department and accounting department. From that information, an analyst can infer: (i) the company has strong internal control, (ii) the company has adequate separation of duties.

A) i only.
B) ii only.
C) both i and ii.
D) neither i nor ii.

Question 41

Database design for the acquisition/payment process
Specify the fields that should be included in a database table for each item listed below; underline primary keys and [bracket] foreign keys. Some cells in the table may be left blank.

Question 42

Acquisition/payment process documentation
The A. Gary Anderson Graduate School of Management (AGSM) at the University of California, Riverside periodically needs to hire part-time faculty for certain courses. The department chair of Accounting and Information Systems identifies the courses each term, and sends an e-mail to other local universities. Candidates respond to the e-mail, indicating which course(s) they are qualified and available to teach. The department faculty evaluate each candidate and decide which candidates will teach which courses. At that point, AGSM's clerical staff requests the following information: resume, degree transcripts and student evaluations for the last year. Once those items are received, AGSM sends each part-time faculty member a hiring packet; the faculty member fills out the hiring packet, which includes various personnel, tax and payroll forms, and brings the completed packet to AGSM. The newly-hired faculty member is assigned an office and teaches the class as scheduled. AGSM staff process payroll once a month; faculty can have their salary deposited electronically in the bank or pick up a paper check on the first of the month.
Create a systems flowchart or Level Zero data flow diagram of the preceding process.

Question 43

The following scenario applies to Questions:
Hall's Office Supplies is a small store in a rural area of the United States; Ian Hall is the owner. The store also employs three purchasing agents and an accountant. While the purchasing agents handle day-to-day inventory purchases, Ian makes all large purchases (equipment, furniture and computers, for example) himself. Each purchasing agent is responsible for purchasing a specific group of inventory items; for example, one purchasing agent handles all purchases of computer-related supplies (mouse pads, compact discs). Each purchasing agent uses his/her best judgment when deciding how much and how often to order inventory items. When inventory and other items arrive at
the store, the relevant purchasing agent checks it in and puts it in the stockroom. Vendors send invoices directly to the accountant, who pays them within thirty days and reconciles the bank statement at least monthly. Ian works as a salesperson Monday through Friday from 8 a.m. to 5 p.m.; he is assisted by two half-time sales staff. One staff person works from 8 a.m. to 12 noon, while the other works from 1 p.m. to 5 p.m. The part-time staff is in charge of keeping the shelves stocked. Hall's Office Supplies maintains a manual accounting information system, and retains copies of all documents for one year.
Which flowchart types would be useful for Hall's Office Supplies: (i) systems, (ii) document, (iii) hardware?
A. i and ii only.
b. ii and iii only.
c. i and iii only.
d. i, ii and iii.

Question 44

The following scenario and data flow diagram apply to Questions 61 through 65:
Rochelle was a new employee at CPP Corporation. To her dismay, she arrived in her office to find no furniture, no telephone and no computer. When she asked her supervisor what had happened, he said: "The purchasing department must not have processed the necessary paperwork. We'll correct the problem and get you everything you need within two working days." The supervisor then called the purchasing department manager and reviewed the data flow diagram of the process shown below.
Write a narrative explanation of CPP's acquisition/payment process based on the data flow diagram above. Then, identify at least two specific ways the process could be improved, whether CPP decides to use information technology or not.

Question 45

The following partial data flow diagram of the acquisition/payment process applies to Questions 42 through 45:
In the partial data flow diagram above, symbol "A" could represent:
a. The vendor database.
b. A purchase order.
C. The accounting department.
d. Making a journal entry.

Question 46

The following scenario applies to Questions:
Hall's Office Supplies is a small store in a rural area of the United States; Ian Hall is the owner. The store also employs three purchasing agents and an accountant. While the purchasing agents handle day-to-day inventory purchases, Ian makes all large purchases (equipment, furniture and computers, for example) himself. Each purchasing agent is responsible for purchasing a specific group of inventory items; for example, one purchasing agent handles all purchases of computer-related supplies (mouse pads, compact discs). Each purchasing agent uses his/her best judgment when deciding how much and how often to order inventory items. When inventory and other items arrive at
the store, the relevant purchasing agent checks it in and puts it in the stockroom. Vendors send invoices directly to the accountant, who pays them within thirty days and reconciles the bank statement at least monthly. Ian works as a salesperson Monday through Friday from 8 a.m. to 5 p.m.; he is assisted by two half-time sales staff. One staff person works from 8 a.m. to 12 noon, while the other works from 1 p.m. to 5 p.m. The part-time staff is in charge of keeping the shelves stocked. Hall's Office Supplies maintains a manual accounting information system, and retains copies of all documents for one year.
Which of the following symbols would least likely appear in a flowchart of Hall's acquisition/payment process?
a.

b.

C.

d.

Question 47

Data flow diagram & acquisition/payment steps
Bumble Beasley reviewed the steps in the acquisition/payment process, and then created the data flow diagram below. Analyze the diagram and respond to the questions that follow.

Question 48

The following partial data flow diagram of the acquisition/payment process applies to Questions 42 through 45:
In the partial data flow diagram above, symbol "C" is least likely to be labeled:
A. File documents.
b. Prepare purchase order.
c. Pay vendor invoice.
d. Receive merchandise.

Question 49

The following partial data flow diagram of the acquisition/payment process applies to Questions 42 through 45:
In the partial data flow diagram above, symbol "B" could represent:
a. Preparing a purchase order.
b. Updating the accounting information system.
c. Transmitting data to a vendor.
D. A receiving report.

Question 50

The following scenario and data flow diagram apply to Questions 61 through 65:
Rochelle was a new employee at CPP Corporation. To her dismay, she arrived in her office to find no furniture, no telephone and no computer. When she asked her supervisor what had happened, he said: "The purchasing department must not have processed the necessary paperwork. We'll correct the problem and get you everything you need within two working days." The supervisor then called the purchasing department manager and reviewed the data flow diagram of the process shown below.
Suggest two internal controls CPP should implement to prevent Rochelle's problem from happening again.

Question 51

The following scenario and data flow diagram apply to Questions 61 through 65:
Rochelle was a new employee at CPP Corporation. To her dismay, she arrived in her office to find no furniture, no telephone and no computer. When she asked her supervisor what had happened, he said: "The purchasing department must not have processed the necessary paperwork. We'll correct the problem and get you everything you need within two working days." The supervisor then called the purchasing department manager and reviewed the data flow diagram of the process shown below.
CPP doesn't use any form of information technology in its acquisition/payment process. Give two specific examples of how IT could make their process more effective and/or efficient.

Question 52

The following scenario and data flow diagram apply to Questions 61 through 65:
Rochelle was a new employee at CPP Corporation. To her dismay, she arrived in her office to find no furniture, no telephone and no computer. When she asked her supervisor what had happened, he said: "The purchasing department must not have processed the necessary paperwork. We'll correct the problem and get you everything you need within two working days." The supervisor then called the purchasing department manager and reviewed the data flow diagram of the process shown below.
Identify at least three errors in the data flow diagram above. Explain how you would revise the data flow diagram to eliminate the errors.

Question 53

Internal controls
The A. Gary Anderson Graduate School of Management (AGSM) at the University of California, Riverside periodically needs to hire part-time faculty for certain accounting and information systems courses. The department chair of Accounting and Information Systems identifies the courses each term, and sends an e-mail to professors at other local universities. Candidates respond to the e-mail, indicating which course(s) they are qualified and available to teach. AGSM department faculty evaluates each candidate and decides which candidates will teach which courses. At that point, AGSM's clerical staff requests the following information: resume, degree transcripts and student evaluations for the last year. Once those items are received, AGSM sends each part-time faculty member a hiring packet; the faculty member fills out the hiring packet, which includes various personnel, tax and payroll forms, and brings the completed packet to AGSM. The newly-hired faculty member is assigned an office and teaches the class as scheduled. AGSM staff process payroll once a month; faculty can have their salary deposited electronically in the bank or pick up a paper check on the first of the month.
Identify five risks for AGSM based on the preceding scenario. Suggest an internal control to address each risk, and indicate whether the internal control is primarily preventive, detective or corrective. Use the table below to record your responses.

Question 54

The following partial data flow diagram of the acquisition/payment process applies to Questions 42 through 45:
In the partial data flow diagram above, assume symbol "C" is labeled "prepare receiving report." Symbol "E" is most likely to be labeled:
a. Operating department.
b. Receiving report file.
c. Merchandise received.
D. Inventory database.

Question 55

The following scenario and data flow diagram apply to Questions 61 through 65:
Rochelle was a new employee at CPP Corporation. To her dismay, she arrived in her office to find no furniture, no telephone and no computer. When she asked her supervisor what had happened, he said: "The purchasing department must not have processed the necessary paperwork. We'll correct the problem and get you everything you need within two working days." The supervisor then called the purchasing department manager and reviewed the data flow diagram of the process shown below.
Identify three documents CPP Corporation should use in its acquisition/payment process. Explain the purpose of each document.

Question 56

The following scenario applies to Questions:
Hall's Office Supplies is a small store in a rural area of the United States; Ian Hall is the owner. The store also employs three purchasing agents and an accountant. While the purchasing agents handle day-to-day inventory purchases, Ian makes all large purchases (equipment, furniture and computers, for example) himself. Each purchasing agent is responsible for purchasing a specific group of inventory items; for example, one purchasing agent handles all purchases of computer-related supplies (mouse pads, compact discs). Each purchasing agent uses his/her best judgment when deciding how much and how often to order inventory items. When inventory and other items arrive at
the store, the relevant purchasing agent checks it in and puts it in the stockroom. Vendors send invoices directly to the accountant, who pays them within thirty days and reconciles the bank statement at least monthly. Ian works as a salesperson Monday through Friday from 8 a.m. to 5 p.m.; he is assisted by two half-time sales staff. One staff person works from 8 a.m. to 12 noon, while the other works from 1 p.m. to 5 p.m. The part-time staff is in charge of keeping the shelves stocked. Hall's Office Supplies maintains a manual accounting information system, and retains copies of all documents for one year.
A systems flowchart of the store's acquisition/payment process is least likely to include a column labeled:
A. Inventory items.
b. Purchasing agents.
c. Accountant.
d. Vendor.