1. Which of the following is generally not shown on
Which of the following is least likely to be a major
a receiving report?
Answer: price of the items
2. A voucher package should include
Answer: a purchase order, vendor invoice, and
receiving report.
3. The authority to accept incoming goods in
receiving should be based on a(n)
Answer: Approved purchase order
4. The management at Barks-a-Million is
considering a new inventory control system. The
current system is inadequate because it
frequently cause stockouts that interrupt
production and lead to excess stock of other
materials – resulting in markdowns and high
carrying costs. The new system will focus on
ensuring that these costs are minimized. The
new inventory control system will likely employ
Answer: the economic order quantity
5. This document is used to record adjustments to
accounts payable based on return of
unacceptable inventory to supplier.
Answer: debit memo
6. This is a document that helps to ensure the
receiving clerks count the number of goods
received.
Answer: blind copy of purchase order
7. Which of the following inventory control
methods is most likely to be used for a product
for which sales can be reliably forecast?
Answer: MRP
8. Vendor invoices are approved by the _____,
which reports to the _____.
Answer: accounts payable department;
controller
9. Which electronic files are either read or updated
when goods are ordered from a vendor?
Answer: inventory, vendors, and open purchase
orders
10.
criterion in vendor selection?
Answer: credit rating of the vendor
11. The accounts payable department receives a
purchase order form to accomplish all of the
following except
Answer: Ensuring that the goods had been
received by the party requesting the goods.
12. Which of the following is a primary function of
the purchasing department?
Answer: Ensuring the acquisition of goods of a
specified quality.
13. The accounts payable department generally
should
Answer: Agree the vendor’s invoice with the
receiving report and purchase order
14. The mailing of disbursement checks and
remittance advices should be controlled by the
employee who
Answer: Signed the checks last
15. Once a purchase request is approved, what is the
next step?
Answer: The inventory master file is accessed to
find the preferred supplier(s).
16. Which duties should be segregated?
Answer: writing checks and maintaining the
check register
17. Which of the following information is LEAST
LIKELY to be obtained when acquiring an
inventory
Answer: Performance of the vendor
18. Which of the following procedures is designed to
prevent the purchasing agent from receiving
kickbacks?
Answer: requiring purchasing agents to disclose
any financial investments in potential suppliers
19. Which of the following is true?
Answer: Cash disbursements is a treasury
function
20. Which of the following procedures is designed to
prevent the purchasing agent from receiving
kickbacks?
Answer: requiring purchasing agents to disclose
any financial investments in potential suppliers.
21. Which of the following tasks should the cash
disbursement clerk NOT perform?
Answer: approve the liability
22. Who will usually approve the payment of
suppliers invoice?
Answer: Accounts payable
23. To achieve control when there is no billing
department, the billing function should be
performed by
Answer: Accounting department
24. What is the reason for ensuring that every copy
of a vendor’s invoice has a receiving report?
Answer: To ascertain that merchandise billed by
the vendor was received by the company.
25. What is the best control to mitigate the threat of
paying prices that are too high to goods ordered?
Answer: Use only approved suppliers and solicit
competitive bids.
26. What control would best mitigate the threat of
paying an invoice twice?
Answer: never authorizing payment of a
photocopy of an invoice
27. Which control would best prevent payments
made to fictitious vendors?
Answer: Allow payments only to approved
vendors
28. A surprise count of an imprest petty cash fund
should find the total of _____ equal to the
amount authorized for the fund.
Answer: cash and vouchers
29. A CPA learns that his client has paid a vendor
twice for the same shipment, once based upon
the original invoice and once based upon the
monthly statement. A control procedure that
should have prevented this duplicate payment is
Answer: Attachment of the receiving report to
the disbursement report.
30. Requiring all packing slips be reconciled to
purchase orders before accepting a delivery of
inventory would be most likely to prevent which
of the following situations?
Answer: A supplier delivers more inventory
than ordered at the end of the year and sends
an invoice for the total quantity delivered.
31. Accounts Payable department authorize
payments, while Treasury department disburse
cash.
Answer: Both statements are true.
32. Paying for goods not received is prevented by
Answer: Checking the purchase orders whether
they are properly authorized.
33. The following internal control can detect the
mistakes in posting to accounts payable, which is
not?
Answer: Require a complete voucher package.
34-36 What are the three generic functions that need
to be segregated?
34. Authorizing Transactions
35. Recording Transactions
36. Custody of Assets
37-40 Enumerate the 4 primary activities of
Expenditure Cycle
37. Ordering goods, supplies, and services
38. Receiving and storing these items
39. Approving the invoice presented by vendors
and suppliers
40. Paying for these items/the invoices