[AIS] Quizzer on Chapter 5

The purpose of the purchase requisition is to

a. order goods from vendors

b. record receipt of goods from vendors

c. authorize the purchasing department to order goods

d. bill for goods delivered

c. authorize the purchasing department to order goods

The purpose of the receiving report is to

a. order goods from vendors

b. record receipt of goods from vendors

c. authorize the purchasing department to order goods

d. bill for goods delivered

b. record receipt of goods from vendors

All of the following departments have a copy of the purchase order except

a. the purchasing department

b. the receiving department

c. accounts payable

d. general ledger

d. general ledger

The purpose of the purchase order is to

a. order goods from vendors

b. record receipt of goods from vendors

c. authorize the purchasing department to order goods

d. approve payment for goods received

a. order goods from vendors

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

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

c. the orders that have not been received

The purchase order

a. is the source document to make an entry into the accounting records

b. indicates item description, quantity, and price

c. is prepared by the inventory control department

d. is approved by the end-user department

b. indicates item description, quantity, and price

The reason that a blind copy of the purchase order is sent to receiving is to

a. inform receiving when a shipment is due

b. force a count of the items delivered

c. inform receiving of the type, quantity, and price of items to be delivered

d. require that the goods delivered are inspected

b. force a count of the items delivered

The receiving report is used to

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

a. accompany physical inventories to the storeroom or warehouse

When a copy of the receiving report arrives in the purchasing department, it is used to

a. adjust perpetual inventory records

b. record the physical transfer of inventory from receiving to the warehouse

c. analyze the receiving department’s process

d. recognize the purchase order as closed

d. recognize the purchase order as closed

The financial value of a purchase is determined by reviewing the

a. packing slip

b. purchase requisition

c. receiving report

d. supplier’s invoice

d. supplier’s invoice

Which document is least important in determining the financial value of a purchase?

a. purchase requisition

b. purchase order

c. receiving report

d. supplier’s invoice

a. purchase requisition

In a merchandising firm, authorization for the payment of inventory is the responsibility of

a. inventory control

b. purchasing

c. accounts payable

d. cash disbursements

c. accounts payable

In a merchandising firm, authorization for the purchase of inventory is the responsibility of

a. inventory control

b. purchasing

c. accounts payable

d. cash disbursements

a. inventory control

When purchasing inventory, which document usually triggers the recording of a liability?

a. purchase requisition

b. purchase order

c. receiving report

d. supplier’s invoice

d. supplier’s invoice

Because of time delays between receiving inventory and making the journal entry

a. liabilities are usually understated

b. liabilities are usually overstated

c. liabilities are usually correctly stated

d. none of the above

a. liabilities are usually understated

Usually the open voucher payable file is organized by

a. vendor

b. payment due date

c. purchase order number

d. transaction date

b. payment due date

Which of the following statements is not correct?

a. the voucher system is used to improve control over cash disbursements

b. the sum of the paid vouchers represents the voucher payable liability of the firm

c. the voucher system permits the firm to consolidate payments of several invoices on one voucher

d. many firms replace accounts payable with a voucher payable system

b. the sum of the paid vouchers represents the voucher payable liability of the firm

In the expenditure cycle, general ledger does not

a. post the journal voucher from the accounts payable department

b. post the account summary from inventory control

c. post the journal voucher from the purchasing department

d. reconcile the inventory control account with the inventory subsidiary summary

c. post the journal voucher from the purchasing department

The documents in a voucher packet include all of the following except

a. a check

b. a purchase order

c. a receiving report

d. a supplier’s invoice

a. a check

To maintain a good credit rating and to optimize cash management, cash disbursements should arrive at the vendor’s place of business

a. as soon as possible

b. on the due date

c. on the discount date

d. by the end of the month

c. on the discount date

The cash disbursement clerk performs all of the following tasks except

a. reviews the supporting documents for completeness and accuracy

b. prepares checks

c. signs checks

d. marks the supporting documents paid

c. signs checks

When a cash disbursement in payment of an accounts payable is recorded

a. the liability account is increased

b. the income statement is changed

c. the cash account is unchanged

d. the liability account is decreased

d. the liability account is decreased

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

a. inventory control

b. purchasing

c. accounts payable

d. cash disbursements

c. accounts payable

Of the following duties, it is most important to separate

a. warehouse from stores

b. warehouse from inventory control

c. accounts payable and accounts receivable

d. purchasing and accounts receivable

b. warehouse from inventory control

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

a. purchasing

b. receiving

c. accounts payable

d. general ledger

b. receiving

The receiving department is not responsible to

a. inspect shipments received

b. count items received from vendors

c. order goods from vendors

d. safeguard goods until they are transferred to the warehouse

c. order goods from vendors

The major risk exposures associated with the receiving department include all of the following except

a. goods are accepted without a physical count

b. there is no inspection for goods damaged in shipment

c. inventories are not secured on the receiving dock

d. the audit trail is destroyed

d. the audit trail is destroyed

When searching for unrecorded liabilities at the end of an accounting period, the accountant would search all of the files except

a. the purchase requisition file

b. the cash receipts file

c. the purchase order file

d. the receiving report file

b. the cash receipts file

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

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

b. the purchase order proves that the purchase was required

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

a. the inventory control clerk

b. the purchasing department

c. the vendor

d. the computer system

d. the computer system

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

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. the most competitive price will be obtained

In a real-time processing system with a high number of transactions, the best and most practical control over cash disbursements is to have

a. all checks manually signed by the treasurer

b. all checks signed by check-signing equipment

c. checks over a certain dollar amount manually signed by the treasurer

d. checks over a certain dollar amount manually signed by the cash disbursements clerk

c. checks over a certain dollar amount manually signed by the treasurer

The document which will close the open purchase requisition file is the

a. purchase order

b. vendor invoice

c. receiving report

d. one of the above

c. receiving report

Goods received are inspected and counted to

a. determine that the goods are in good condition

b. determine the quantity of goods received

c. preclude payment for goods not received or received in poor condition

d. all of the above

d. all of the above

If a company uses a standard cost system, inventory records can be updated from the

a. vendor invoice

b. purchase order

c. receiving report

d. purchase requisition

c. receiving report

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

a. vendor invoice

b. purchase order

c. receiving report

d. purchase requisition

a. vendor invoice

Copies of a purchase order are sent to all of the following except

a. inventory control

b. receiving

c. general ledger

d. accounts payable

c. general ledger

The receiving report

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

b. accompanies the goods to the storeroom

A supplier invoice

a. is included with the goods

b. shows what was ordered even if all was not shipped

c. is sent by vendor to accounts payable

d. none of the above

c. is sent by vendor to accounts payable

The cash disbursement function is

a. part of accounts payable

b. an independent accounting function

c. a treasury function

d. part of the general ledger department

c. a treasury function

It contributes to both control and efficiency by listing only those vendors approved to do business with the organization.

a. Voucher System

b. Valid Vendor File

c. Blind Copy of the Purchase Order

d. Receiving Report

b. Valid Vendor File

These procedures include the tasks involved in identifying inventory needs, placing the order, receiving the inventory and recognizing the liability.

a. Cash Disbursement System

b. Sales Forecasting

c. Financial Reporting

d. Purchases Processing Procedures

d. Purchases Processing Procedures

Which document helps to ensure that the receiving clerks actually count the number of goods received?

a. Packing List

b. Blind Copy of Purchase Order

c. Shipping Notice

d. Invoice

b. Blind Copy of Purchase Order

The reconciliation of this document with the PO signifies that the organization has a legitimate obligation.

a. Invoices

b. Purchase Orders

c. Purchase Requisitions

d. Receiving Reports

d. Receiving Reports

This document should reconcile with the purchase requisition.

a. Invoices

b. Purchase Orders

c. Checks

d. Receiving Reports

b. Purchase Orders

In this department a multipart purchase order is prepared to be sent to the vendor, AP, receiving, data processing, and purchasing department file.

a. Data Processing Department

b. Receiving Department

c. Purchasing Department

d. Accounts Payable Department

c. Purchasing Department

After receiving the purchase order in data processing department, an open purchase order file will be created and the open purchase requisition file will be transferred to close purchase requisition file.

a. True

b. False

a. True

This file contains purchase requisition number, inventory number, quantity on order, vendor number, and the unit standard cost.

a. Open and Close Requisition File

b. Inventory Master File

c. Vendor File

d. Open and Purchase Order File

a. Open and Close Requisition File

It processes the payment of obligations created in the purchases system.

a. Cash Disbursement System

b. Cash Receipt System

c. Purchases Procedure

d. Sales Reporting

a. Cash Disbursement System

This function continually monitors inventory levels. As inventory levels drop to their predetermined reorder points, it formally authorizes replenishment with a purchase requisition.

a. Inventory Control

b. Purchase Orders

c. Purchases Subsystem

d. Supervision

a. Inventory Control

The reengineered system addresses many of the operational weaknesses associated with the automated system except:

a. It uses real-time procedures and direct access files to shorten the lag time in record keeping

b. It eliminates routine clerical procedures by distributing terminals to user areas

c. This system removes the physical separation between authorization and transaction processing

d. It achieves a significant reduction in paper documents by using digital communications between departments and by digitally storing records.

c. This system removes the physical separation between authorization and transaction processing

The automated system of expenditure cycle promotes effective cash management by scanning the voucher file daily for items due, thus avoiding early payments and missed due dates.

a. True

b. False

a. True

The blind copy contains no __________________ information about the products being received.

a. Quantity or Price

b. Quantity and Price

c. Price or PO Number

d. Price and Terms

a. Quantity or Price

Upon recording the liability, the AP clerk transfers all source documents to the open AP file. These source documents include the following except:

a. Purchase Order

b. Receiving Report

c. Disbursement Voucher

d. Invoice

c. Disbursement Voucher

This states that there must be a control of access to physical assets. Controls might include locks, alarms, and restricted access to areas that contain inventories and cash.

a. Theft of Assets

b. Indirect Access

c. Direct Access

d. Supervision

c. Direct Access

This should travel with the goods to describe its contents.

a. order goods from vendors

b. record receipt of goods from vendors

c. authorize the purchasing department to order goods

d. bill for goods delivered

c. authorize the purchasing department to order goods

The purpose of the receiving report is to

a. order goods from vendors

b. record receipt of goods from vendors

c. authorize the purchasing department to order goods

d. bill for goods delivered

b. record receipt of goods from vendors

All of the following departments have a copy of the purchase order except

a. order goods from vendors

b. the receiving department

c. accounts payable

d. general ledger

d. general ledger

The purpose of the purchase order is to

a. order goods from vendors

b. record receipt of goods from vendors

c. authorize the purchasing department to order goods

d. approve payment for goods received

a. order goods from vendors

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

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

c. the orders that have not been received

The purchase order

a. is the source document to make an entry into the accounting records

b. indicates item description, quantity, and price

c. is prepared by the inventory control

department

d. is approved by the end-user department

b. indicates item description, quantity, and price

The reason that a blind copy of the purchase order is sent to receiving is to

a. inform receiving when a shipment is due

b. force a count of the items delivered

c. inform receiving of the type, quantity, and price of items to be delivered

d. require that the goods delivered are inspected

b. force a count of the items delivered

The receiving report is used to

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

a. accompany physical inventories to the storeroom or warehouse

When a copy of the receiving report arrives in the purchasing department, it is used to

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. recognize the purchase order as closed

d. recognize the purchase order as closed

The financial value of a purchase is determined by reviewing the

a. Packing slip

b. purchase requisition

c. receiving report

d. supplier’s invoice

d. supplier’s invoice

Which document is least important in determining the financial value of a purchase?

a. purchase requisition

b. purchase order

c. receiving report

d. supplier’s invoice

a. purchase requisition

In a merchandising firm, authorization for the payment of inventory is the responsibility of

a. inventory control

b. purchasing

c. accounts payable

d. cash disbursements

c. accounts payable

Because of time delays between receiving inventory and making the journal entry

a. liabilities are usually understated

b. liabilities are usually overstated

c. liabilities are usually correctly stated

d. none of the above

a. liabilities are usually understated

Which of the following statements is not correct?

a. the voucher system is used to. improve control over cash disbursements

b. the sum of the paid vouchers represents the voucher payable liability of the firm

c. the voucher system permits the firm to consolidate payments of several invoices on one voucher

d. many firms replace accounts payable with a voucher payable systems

b. the sum of the paid vouchers represents the voucher payable liability of the firm

When a cash disbursement in payment of an accounts payable is recorded

a. the liability account is increased

b. the income statement is changed

c. the cash account is unchanged

d. the liability account is decreased

d. the liability account is decreased