Chapter 5

The Expenditure Cycle

Part 1

Accounting information system

01 MCQ
1. All the following are goals of providing
needed resources to organization except

A. Purchase from any B. Purchase high quality

vendor items

C. Receive only those items D. Ensure items are not lost,

ordered stolen, or broken
2. Purchasing prepares a purchase order (PO)
for each vendor and sends copies to all the
following except

A. Inventory Control B. A/P

C. Raw materials storeroom D. Receiving

3. Periodically, A/P search the open vouchers
payable file for items with payments due

A. A/P updates the account B. A/P updates the account

payable general ledger payable subsidiary
ledger

C. A/P sends the voucher D. None of them

and supporting
documents to
purchasing
4. Levels of automating and reengineering
ordering

A. Computer generates PR B. Computer generates PO

C. Computer-generates PO D. EDI
is automatically sent
with manual review
5. All of the following are methods used for
authorizing and ordering inventories except

A. The system uses EDI and B. The system uses EDI and
manually places the electronically places the
order with POs order without POs

C. The system Prepare Pos D. The system distributes Pos

and sends them to directly to the vendors and
purchase for review, internal users, bypassing
signing, and distribution purchases
6. In computer-based cash disbursements, all of
the following are tasks performed
automatically by the computer except

A. The system scans for B. Print checks for the

vouchers currently due vouchers

C. Record the checks in the D. Batch totals are prepared for

check registration the subsidiary ledger
update procedures
7. One of the accounting records in cash
disbursements system is

A. General ledger cash B. Purchases requisition file

account

C. Receiving report file D. Purchase order file

8. One of the accounting records in purchase
processing system is

A. General ledger cash B. Cash disbursement

account journal

C. Purchases requisition file D. Voucher payable file

02 T or F
1. A manual purchases system begins in
Inventory Control

True False
2. A purchase requisition (PR) is prepared and
copies to sent to Purchasing

True False Only

3. A/P reconciles these documents, posts to
the purchases journal, and records the
liability in the accounts payable general
ledger.

True False
4. G/L department receives the journal from
cash disbursements

True False
5. Automation is the use of technology to
restructure business processes and firm
organization

True False
6. Transaction and open document files of
expenditure cycle include Supplier’s invoice
file

True False
7. Receiving department supervise the
purchasing processing system

True False
8. Purchases processing system access to security
of physical assets while cash disbursements system
access to proper security over cash

True False
9. Receiving department supervise the cash
disbursements system

True False
03 Flowcharts
Procurement Purchase Requisition Purchasing

Cycle 1 2

Subsystem PROCUREMENT CYCLE

(SUBSYSTEM)
Receiving/
Cash Disbursements Inspection
3
5

Accounts Payable
4
Manual
Purchases
Flowchart
DFD of Cash
Disbursements
System
Automated
Batch
Purchases
Thank
you!