Question 1

Which of the following tasks is NOT performed by the cash disbursement clerk?

Accepted Answer

A)   Review the supporting documents for completeness and accuracy.
B)   Prepare checks.
C)   Sign checks.
D)   Mark the supporting documents paid.

Question 2

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

Accepted Answer

A)   as soon as possible
B)   on the due date
C)   on the discount date
D)   by the end of the month

Question 3

The blind copy of the purchase order that goes to the receiving department contains no item descriptions.

Accepted Answer

A) True 
 B)False

Question 4

The purpose of the purchase order is to

Accepted Answer

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

Question 5

Discuss the steps taken in the purchasing department in a basic technology expenditure cycle.

Accepted Answer

The purchasing department receives purch...

Question 6

Describe four tasks the purchases computer application performs automatically in the integrated purchases processing system.

Accepted Answer

1. The system reads the purchases requis...

Question 7

Authorization of purchases in a merchandising firm occurs in the inventory control department.

Accepted Answer

A) True 
 B)False

Question 8

The level of departmental activity is higher with an integrated purchases processing system than it is with a basic technology system.

Accepted Answer

A) True 
 B)False

Question 9

Explain how a voucher payable system works. How is the balance of AP determined?

Accepted Answer

In place of a standard accounts payable ...

Question 10

Which internally generated document should be compared to the supplier's invoice to verify the price of an item?

Accepted Answer

The answer of Which internally generated document should be compared...

Question 11

What is the principle objective of the cash disbursement system?

Accepted Answer

The principal objective of this system i...

Question 12

Of the following duties, it is most important to separate

Accepted Answer

A)   warehouse from stores
B)   warehouse from inventory control
C)   accounts payable and accounts receivable
D)   purchasing and accounts receivable

Question 13

Assuming the organization uses the perpetual inventory method, what general ledger journal entries are triggered by the purchases system? From which departments do these journal entries arise?

Accepted Answer

(Accounts Payable)
Inventory C...

Question 14

What is the purpose of a receiving report? How are copies of the report distributed?

Accepted Answer

Upon completion of the physical count an...

Question 15

The accounts payable department reconciles the accounts payable subsidiary ledger to the control account.

Accepted Answer

A) True 
 B)False

Question 16

If accounts payable receives an invoice directly from the supplier it needs to be reconciled with the purchase order and receiving report.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A)   the purchasing department
B)   the receiving department
C)   accounts payable
D)   general ledger

Question 18

Where is access control exercised in the purchasing/cash disbursement functions?

Accepted Answer

A firm must limit access to do...

Question 19

A three way match involves a purchase order, a purchase requisition, and an invoice.

Accepted Answer

A) True 
 B)False

Question 20

The receiving department is not responsible to

Accepted Answer

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

Exam 5: The Expenditure Cycle Part I: Purchases and Cash Disbursements Procedures

Assuming the organization uses the perpetual inventory method, what general ledger journal entries are triggered by the purchases system? From which departments do these journal entries arise?

Correct Answerverified(Accounts Payable)Inventory C...View AnswerShow Answer

Authorization of purchases in a merchandising firm occurs in the inventory control department.

Correct AnswerverifiedShow Answer

What is the principle objective of the cash disbursement system?

Correct AnswerverifiedThe principal objective of this system i...View AnswerShow Answer

The accounts payable department reconciles the accounts payable subsidiary ledger to the control account.

Correct AnswerverifiedShow Answer

What is the purpose of a receiving report? How are copies of the report distributed?

Correct AnswerverifiedUpon completion of the physical count an...View AnswerShow Answer

Which of the following tasks is NOT performed by the cash disbursement clerk?

Correct AnswerverifiedShow Answer

Describe four tasks the purchases computer application performs automatically in the integrated purchases processing system.

Correct Answerverified1. The system reads the purchases requis...View AnswerShow Answer

Discuss the steps taken in the purchasing department in a basic technology expenditure cycle.

Correct AnswerverifiedThe purchasing department receives purch...View AnswerShow Answer

The purpose of the purchase order is to

Correct AnswerverifiedShow Answer

If accounts payable receives an invoice directly from the supplier it needs to be reconciled with the purchase order and receiving report.

Correct AnswerverifiedShow Answer

Of the following duties, it is most important to separate

Correct AnswerverifiedShow Answer

The receiving department is not responsible to

Correct AnswerverifiedShow Answer

A three way match involves a purchase order, a purchase requisition, and an invoice.

Correct AnswerverifiedShow Answer

Where is access control exercised in the purchasing/cash disbursement functions?

Correct AnswerverifiedA firm must limit access to do...View AnswerShow Answer

The blind copy of the purchase order that goes to the receiving department contains no item descriptions.

Correct AnswerverifiedShow Answer

The level of departmental activity is higher with an integrated purchases processing system than it is with a basic technology system.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Explain how a voucher payable system works. How is the balance of AP determined?

Correct AnswerverifiedIn place of a standard accounts payable ...View AnswerShow Answer

Which internally generated document should be compared to the supplier's invoice to verify the price of an item?

Correct AnswerverifiedShow Answer

Correct Answer
verified
(Accounts Payable)
Inventory C...
View Answer

Correct Answer
verified

Correct Answer
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The principal objective of this system i...
View Answer

Correct Answer
verified

Correct Answer
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Upon completion of the physical count an...
View Answer

Correct Answer
verified

Correct Answer
verified
1. The system reads the purchases requis...
View Answer

Correct Answer
verified
The purchasing department receives purch...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A firm must limit access to do...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In place of a standard accounts payable ...
View Answer

Correct Answer
verified