ACCT 4600 TEST 4 PART 2

The requesting department

Which of the following reviews and approves the purchase order prior to its further processing?

purchase order

a document which identifies a vendor and confirms the quantity and price of goods identified in it is called

sign checks and also cancel supporting documents

in a properly designed internal accounting control system, the same employee may be permitted to

authorization of transactions from the custody of related assets

the purpose of segregating the duties of hiring personnel and distributing payroll checks is to separate the

An approved vendor should possess all of these attributes

Vendors found on a company’s approved vendor list should possess the attributes of

receiving report and the purchase order

for effective internal accounting control, the accounts payable department should compare the information on each vendor’s invoice with the

Match purchase order, receiving report, and vendor’s invoice for each voucher in the accounts payable department

Which of the following is the most effective control procedure to detect vouchers that were prepared for the payment of goods that were not received?

receiving department

Internal accounting control is strengthened when the quantity of merchandise ordered is omitted from the copy of the purchase order sent to the

Payroll department

the department responsible for the actual computation and preparation of payroll is the

once an invoice is posted

vendor payment is typically made

Establish the agreement of the vendor’s invoice with the receiving report and purchase order

for effective internal control purposes, the vouchers payable department should generally

internal auditor

for the most effective internal accounting control, monthly bank statements should be received directly from the banks and reviewed by the

signs the checks last

mailing disbursement checks and remittance advices should be controlled by the employee who

purchase orders, receiving reports, and vendors’ invoices are matched independently in preparing vouchers

Which of the following controls would be most effective in ensuring that recorded purchases are free of material errors?

Payroll bank accounts are reconcilied monthly to appropriate personnel

An appropriate compliance test to confirm that only valid employees are on the payroll is to ensure that

distributing payroll checks to employees

A cpa reviews a client’s payroll procedures. The CPA would consider internal control to be less effective if a payroll department supervisor was assigned the responsibility for

internal audit

the function responsible for reconciling the bank account upon which voucher checks are drawn is

use of an imprest fund

which of the following is not a major control feature of the cash disbursements business processes

prepare disbursement vouchers and sign checks

in a properly designed internal accounting control system, the same employee should not be permitted to

approved purchase order

the authority to accept incoming goods in receiving should be based on

purchase order

a document which identifies a vendor and confirms the quantity and price of goods identified in it is called

inadequate separation of duties exist

on receipt of a requisition, the stores manager initates a three-part purchase order. Two copies go to the vendor, and one copy stays in the stores file. On receipt of goods, the stores manager matches the purchase order with the invoice and forwards them to accounts payable for payment. Which of the following statements best describes the internal control over purchasing?

personnel, payroll, and timekeeping

Which of the following should not have access to signed paychecks

accounts payable, stores, and the receiving department

which of the following accesses the purchase order database during the processing of a purchase order?

have formal written-policies and procedures over procurement

The best way to prevent improper buyer-vendor relationships is to

purchase orders

jackson , the purchasing agent of JUDD harware Wholesalers, has a relative who owns a retail hardware store. Jackson arranged for hardware to be delievered by manufactures to the retail store on a COD basis, thereby enabling his relative to buy at Judd’s wholesale prices. Jackson probably was able to accomplish this because of Judd’s poor internal control over

remittance advice

A turnaround document that is used to enhance internal control and promote the accuracy of incoming cash receipts is the

inadequate internal control because of a lack of segregation of duties

As payments are received, one mailroom employee is assigned the responsibility of prelisting receipts and preparing the deposit slip prior to forwarding the receipts, deposit slip, and remittance advices to accounts receivable for posting. Accounts receivable personnel refoot the deposit slip, stamp a restrictive endorsement on the back of each check, and then forward the receipts and deposit slip to the treasury department. Evaluate the internal control of the described process. Which of the following is a reasonable assessment of internal control in this process?

Sales returns

to conceal defalcations involving receivables, the auditor would expect an experienced bookkeeper to charge which of the following accounts?

an independently prepared master price list authorized by management

The prices entered on sales orders should be independent of the sales order function. to achieve this transaction cycle control, the company’s ordering system should use

final authorization of credit memos by personnel in the sales department could permit an employee defalcation scheme

The most likely result of ineffective internal control policies and procedures in the revenue cycle is that

accounts receivable

to provide an adequate separation of functions in the accounts receivable business process, maintaining the subsidiary accounts receivable ledger should be the responsibility of

a journal voucher from cash receipts and a control total from accounts receivable

the amount of cash receipts for august 12 is $6,389.42. for the general ledger to post this amount, it must receive

Controller

For good internal control, the billing department should be under the direction of the

Answers A and B are both correct

to maintain an adequate separation of duties, various functions within the customer order process should be independent of each other. An example of this is

all of these are correct

Using a lockbox system

Write-offs must be approved by a responsible officer after review of credit department recommendations and supporting evidence

Which of the following internal control procedures will most likely prevent the concealment of a cash shortage resulting from improper write-off of a trade account receivable?

enforce a segregation of duties between employees who have custody of cash receipts and those who account for them

the most effective way to prevent an employee from misappropriating cash and then altering the accounting records to conceal the shortage is to

the billing function should be assigned to people other than those responsible for maintaining accounts receivable subsidiary records

which of the following is an effective internal accounting control over accounts receivable?

internal use document

a sales order is

have customers send payments directly to the company’s depository bank

Which of the following would be the best protection for a company that wishes to prevent the lapping of trade accounts receivable?

write-offs of customer accounts

for effective internal accounting control, employees maintaining the accounts receivable subsidiary ledger should not also approve

the billing department supervisor matches prenumbered shipping documents with entries in the sales journal

Which of the following controls most likely would help ensure that all credit sales transactions of an entity are recorded?

a bank lockbox system

an entity with a large volume of customer remittances by mail most likely could reduce the risk of employee misappropriation of cash by using

shipments to customers were invoiced

tracing bills of lading to sales invoices provides evidence that

an independently prepared master price list authorized by management

The prices entered on sales orders should be independent of the sales order function. to acheive this transaction cycle control, the company’s ordering system should use

the packing list and a bill of lading

what documents typically accompany the physical shipment of goods to a customer?

employees involved in the credit granting function are separated from the sales function

which of the following controls most likely would be effective in offsetting the tendency of sales personnel to maximize sales volume at the expense of high bad-debt write-offs?

Answers A and B are both correct

to maintain adequate separation of functions, accounts receivable should not have access to