Question 1

The warehouse is responsible for updating the inventory subsidiary ledger.

Accepted Answer

A) True 
 B)False  False

Question 2

Firms can expect that proper use of a valid vendor file will result in all of the following benefits except

Accepted Answer

A)   purchasing agents will be discouraged from improperly ordering inventory from related parties
B)   purchases from fictitious vendors will be detected
C)   the most competitive price will be obtained
D)   the risk of purchasing agents receiving kickbacks and bribes will be reduced C

Question 3

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

Accepted Answer

A) True 
 B)False  True

Question 4

A purchasing system that employs electronic data interchange does not use a purchase order.

Accepted Answer

A) True 
 B)False

Question 5

The use of inventory reorder points suggests the need to obtain specific authorization.

Accepted Answer

A) True 
 B)False

Question 6

The cash disbursement function is

Accepted Answer

A)   part of accounts payable
B)   an independent accounting function
C)   a treasury function
D)   part of the general ledger department

Question 7

The open purchase order file in the purchasing department is used to determine

Accepted Answer

A)   the quality of items a vendor ships
B)   the best vendor for a specific item
C)   the orders that have not been received
D)   the quantity of items received

Question 8

In a voucher system,the sum of all unpaid vouchers in the voucher register equals the firm's total voucher payable balance.

Accepted Answer

A) True 
 B)False

Question 9

Why should employee paychecks be drawn against a special checking account?

Accepted Answer

The answer of Why should employee paychecks be drawn against...

Question 10

The receiving report

Accepted Answer

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

Question 11

In regards to the accounts payable department,which statement is not true?

Accepted Answer

A)   the purchase requisition shows that the transaction was authorized
B)   the purchase order proves that the purchase was required
C)   the receiving report provides evidence of the physical receipt of the goods
D)   the supplier's invoice indicates the financial value of the transaction

Question 12

Which of the following statements is not true?

Accepted Answer

A)   Routine payroll processing begins with the submission of time cards.
B)   Payroll clerks must verify the hours reported on the time cards.
C)   Payroll reconciles personnel action forms with time cards and prepares paychecks.
D)   Cash disbursements signs paychecks and forwards them to the paymaster for distribution.

Question 13

In a computerized system that uses an economic order quantity (EOQ)model and the perpetual inventory method,who determines when to reorder inventory?

Accepted Answer

A)   the inventory control clerk
B)   the purchasing department
C)   the vendor
D)   the computer system

Question 14

Supervision is extremely important in the receiving department.Two main reasons were given.What were they? Why are these important?

Accepted Answer

The answer of Supervision is extremely important in the receiving...

Question 15

Outline the key steps taken in the purchasing system?

Accepted Answer

The answer of Outline the key steps taken in the...

Question 16

Employee paychecks should be drawn against a special checking account.

Accepted Answer

A) True 
 B)False

Question 17

Name the key tasks associated with purchases procedures.

Accepted Answer

The answer of Name the key tasks associated with purchases...

Question 18

What is a personnel action form?

Accepted Answer

The answer of What is a personnel action form?...

Question 19

Name two major benefits of automating the purchasing effort.

Accepted Answer

The answer of Name two major benefits of automating the...

Question 20

The receiving report is used to

Accepted Answer

A)   accompany physical inventories to the storeroom or warehouse
B)   advise the purchasing department of the dollar value of the goods delivered
C)   advise general ledger of the accounting entry to be made
D)   advise the vendor that the goods arrived safely

Exam 10: Auditing the Expenditure Cycle

The warehouse is responsible for updating the inventory subsidiary ledger.

Firms can expect that proper use of a valid vendor file will result in all of the following benefits except

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

A purchasing system that employs electronic data interchange does not use a purchase order.

The use of inventory reorder points suggests the need to obtain specific authorization.

The cash disbursement function is

The open purchase order file in the purchasing department is used to determine

In a voucher system,the sum of all unpaid vouchers in the voucher register equals the firm's total voucher payable balance.

Why should employee paychecks be drawn against a special checking account?

The receiving report

In regards to the accounts payable department,which statement is not true?

Which of the following statements is not true?

In a computerized system that uses an economic order quantity (EOQ) model and the perpetual inventory method,who determines when to reorder inventory?

Supervision is extremely important in the receiving department.Two main reasons were given.What were they? Why are these important?

Outline the key steps taken in the purchasing system?

Employee paychecks should be drawn against a special checking account.

Name the key tasks associated with purchases procedures.

What is a personnel action form?

Name two major benefits of automating the purchasing effort.

The receiving report is used to