Question 1

Which of the following is generally not shown on a receiving report?

Accepted Answer

A)   price of the items
B)   quantity of the items
C)   purchase order number
D)   counted and inspected byE) A) and B)
F) A) and C)

Question 2

The management at Sad Clown Pajamas,an Internet-based wholesaler,is considering a new inventory control system.The current system is inadequate because it results in stockouts that interrupt production and excess stocks of some materials that result in markdowns and high carrying costs.The new system,which will focus on ensuring that the amounts purchased minimize these costs,will employ

Accepted Answer

A)   a just-in-time inventory system.
B)   the economic order quantity.
C)   a reorder point.
D)   materials requirements planning.E) A) and C)
F) None of the above

Question 3

Economic Order Quantity (EOQ) includes several variables that must be taken into consideration when calculating the optimal order size.One variable,the costs associated with holding inventory,is referred to as

Accepted Answer

A)   ordering costs.
B)   carrying costs.
C)   the reorder point.
D)   stockout costs.E) None of the above
F) All of the above

Question 4

What is one of the best ways to improve the overall efficiency and effectiveness of the receipt and storage of ordered items?

Accepted Answer

A)   requiring all suppliers to have the carrier verify quantities and item numbers before shipment
B)   requiring all suppliers to include RFID tags on their items
C)   requiring all suppliers to use EDI to expedite the receiving department function
D)   requiring all delivery trucks to have satellite data terminals to expedite the receiving department functionE) A) and C)
F) C) and D)

Question 5

A major cost in the purchasing function is the number of purchase orders processed.One technique that may reduce purchasing-related expenses is to have suppliers compete with each other to meet demand at the lowest price.This name of this technique is

Accepted Answer

A)   an EDI auction.
B)   a trading exchange.
C)   a reverse auction.
D)   a supplier consortium.E) A) and C)
F) C) and D)

Question 6

Bob Chum is the sales manager at Folding Squid Technologies.At lunch with the company CEO,he proudly announced that he had received a ________ from a client to buy a large quantity of components from Folding Squid.

Accepted Answer

A)   purchase order
B)   blanket purchase order
C)   voucher
D)   purchase requisitionE) None of the above
F) All of the above

Question 7

The traditional approach to inventory management to ensure sufficient quantity on hand to maintain production is known as

Accepted Answer

A)   safety stock.
B)   just-in-time production.
C)   economic order quantity.
D)   optimal inventory quantity.E) C) and D)
F) A) and B)

Question 8

What is a key feature of materials requirements planning (MRP) ?

Accepted Answer

A)   minimize or entirely eliminate carrying and stockout costs
B)   reduce required inventory levels by scheduling production rather than estimating needs
C)   determine the optimal reorder point
D)   determine the optimal order sizeE) B) and D)
F) All of the above

Question 9

Which of the following would probably be the least effective control to mitigate the risk of paying an invoice payable to a phony vendor for inventory purchases,mailed to the company by an employee attempting to commit fraud?

Accepted Answer

A)   Only pay from original invoices.
B)   Cancel all invoices and supporting documentation when paid.
C)   Strict access and authorization controls for the approved vendor master file.
D)   Require three-way match for all inventory purchase invoices.E) A) and D)
F) A) and C)

Question 10

Identify ten threats and applicable control procedures in the expenditure cycle.

Accepted Answer

Answers can include the following inform...

Question 11

All of the following are opportunities to improve efficiency of the accounts payable function except

Accepted Answer

A)   use blanket purchase orders.
B)   convert a manual AIS system to EDI and EFT.
C)   streamline noninventory purchases.
D)   use evaluated receipt settlement.E) B) and C)
F) B) and D)

Question 12

Which of the following threats is not specific to the purchase requisition process of the expenditure cycle?

Accepted Answer

A)   stockouts
B)   purchasing from unauthorized vendors
C)   requisitioning goods not needed
D)   All of the above are threats in the purchase requisition process.E) None of the above
F) A) and C)

Question 13

The purchasing manager at Folding Squid Technologies has responsibility for reviewing and authorizing purchase orders.He also reviews receiving reports,approves or corrects them,and authorizes the cashier to pay vendor invoices.Which of the following would correct control weaknesses,if any,related to these activities?

Accepted Answer

A)   Vendor invoices should be reviewed by the purchasing manager to ensure that they are correct.
B)   Accounts payable should reconcile purchase orders, receiving reports, and invoices.
C)   Vendor invoices should be reviewed by accounts receivable and then cancelled when paid.
D)   Controls are adequate under the current system.E) A) and B)
F) None of the above

Question 14

The management at Sad Clown Pajamas,an Internet-based wholesaler,is considering a new inventory control system.The current system is inadequate because it results in stockouts that interrupt production and excess stocks of some materials that result in markdowns and high carrying costs.The new system,which will focus on forecasting demand for Sad Clown's products,will employ

Accepted Answer

A)   a just-in-time inventory system.
B)   the economic order quantity.
C)   a reorder point.
D)   materials requirements planning.E) A) and B)
F) All of the above

Question 15

Which of the controls below would be least effective to prevent ordering goods at higher than market prices?

Accepted Answer

A)   Variance analysis of actual expenses to budgeted expenses
B)   For high-dollar goods, solicit competitive bids from possible vendors
C)   Only place orders with vendors on an approved vendor list
D)   Frequent review of, and update to, vendor price lists stored in the AISE) A) and B)
F) None of the above

Question 16

Duties in the expenditure cycle should be properly segregated to promote internal control.This means that the authorization function is performed by ________,the recording function is performed by ________,and cash handling is performed by the ________.

Accepted Answer

A)   accounts payable; purchasing; cashier
B)   purchasing; accounts payable; cashier
C)   purchasing; cashier; accounts payable
D)   purchasing; accounts payable; treasurerE) C) and D)
F) B) and C)

Question 17

The document below would be known as what by Alpha Omega Electronics?

Accepted Answer

A)   Receiving report
B)   Purchase order
C)   Purchase requisition
D)   Packing slipE) A) and B)
F) B) and C)

Question 18

Double-checking the accuracy of an invoice is a control that can help to neutralize a threat in the expenditure cycle.What activity would specifically be associated with this control?

Accepted Answer

A)   ordering goods
B)   receiving and storing goods
C)   paying for goods and services
D)   requesting goods be orderedE) B) and D)
F) C) and D)

Question 19

MRP will be a preferred method over JIT when the

Accepted Answer

A)   demand for inventory is fairly predictable.
B)   demand for inventory is mostly unpredictable.
C)   product has a short life cycle.
D)   MRP is always a preferred method over JIT.E) B) and C)
F) A) and C)

Question 20

A key decision in ordering is selecting a suitable vendor.Which of the following would not be a major criterion in vendor selection?

Accepted Answer

A)   prices of goods
B)   quality of goods
C)   credit rating of the vendor
D)   ability to deliver on timeE) A) and B)
F) B) and D)

Exam 13: The Expenditure Cycle: Purchasing to Cash Disbursements

Bob Chum is the sales manager at Folding Squid Technologies.At lunch with the company CEO,he proudly announced that he had received a ________ from a client to buy a large quantity of components from Folding Squid.

Correct Answer
verified

MRP will be a preferred method over JIT when the

Correct Answer
verified

The traditional approach to inventory management to ensure sufficient quantity on hand to maintain production is known as

Correct Answer
verified

Correct Answer
verified

Which of the following would probably be the least effective control to mitigate the risk of paying an invoice payable to a phony vendor for inventory purchases,mailed to the company by an employee attempting to commit fraud?

Correct Answer
verified

All of the following are opportunities to improve efficiency of the accounts payable function except

Correct Answer
verified

Which of the following is generally not shown on a receiving report?

Correct Answer
verified

A key decision in ordering is selecting a suitable vendor.Which of the following would not be a major criterion in vendor selection?

Correct Answer
verified

Which of the controls below would be least effective to prevent ordering goods at higher than market prices?

Correct Answer
verified

Identify ten threats and applicable control procedures in the expenditure cycle.

Correct Answer
verified
Answers can include the following inform...
View Answer

Duties in the expenditure cycle should be properly segregated to promote internal control.This means that the authorization function is performed by ,the recording function is performed by ,and cash handling is performed by the .

Correct Answer
verified

Economic Order Quantity (EOQ) includes several variables that must be taken into consideration when calculating the optimal order size.One variable,the costs associated with holding inventory,is referred to as

Correct Answer
verified

A major cost in the purchasing function is the number of purchase orders processed.One technique that may reduce purchasing-related expenses is to have suppliers compete with each other to meet demand at the lowest price.This name of this technique is

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Double-checking the accuracy of an invoice is a control that can help to neutralize a threat in the expenditure cycle.What activity would specifically be associated with this control?

Correct Answer
verified

What is one of the best ways to improve the overall efficiency and effectiveness of the receipt and storage of ordered items?

Correct Answer
verified

What is a key feature of materials requirements planning (MRP) ?

Correct Answer
verified

Which of the following threats is not specific to the purchase requisition process of the expenditure cycle?

Correct Answer
verified

The document below would be known as what by Alpha Omega Electronics?

Correct Answer
verified

Exam 13: The Expenditure Cycle: Purchasing to Cash Disbursements

Bob Chum is the sales manager at Folding Squid Technologies.At lunch with the company CEO,he proudly announced that he had received a ________ from a client to buy a large quantity of components from Folding Squid.

Correct AnswerverifiedShow Answer

MRP will be a preferred method over JIT when the

Correct AnswerverifiedShow Answer

The traditional approach to inventory management to ensure sufficient quantity on hand to maintain production is known as

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following would probably be the least effective control to mitigate the risk of paying an invoice payable to a phony vendor for inventory purchases,mailed to the company by an employee attempting to commit fraud?

Correct AnswerverifiedShow Answer

All of the following are opportunities to improve efficiency of the accounts payable function except

Correct AnswerverifiedShow Answer

Which of the following is generally not shown on a receiving report?

Correct AnswerverifiedShow Answer

A key decision in ordering is selecting a suitable vendor.Which of the following would not be a major criterion in vendor selection?

Correct AnswerverifiedShow Answer

Which of the controls below would be least effective to prevent ordering goods at higher than market prices?

Correct AnswerverifiedShow Answer

Identify ten threats and applicable control procedures in the expenditure cycle.

Correct AnswerverifiedAnswers can include the following inform...View AnswerShow Answer

Duties in the expenditure cycle should be properly segregated to promote internal control.This means that the authorization function is performed by ________,the recording function is performed by ________,and cash handling is performed by the ________.

Correct AnswerverifiedShow Answer

Economic Order Quantity (EOQ) includes several variables that must be taken into consideration when calculating the optimal order size.One variable,the costs associated with holding inventory,is referred to as

Correct AnswerverifiedShow Answer

A major cost in the purchasing function is the number of purchase orders processed.One technique that may reduce purchasing-related expenses is to have suppliers compete with each other to meet demand at the lowest price.This name of this technique is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Double-checking the accuracy of an invoice is a control that can help to neutralize a threat in the expenditure cycle.What activity would specifically be associated with this control?

Correct AnswerverifiedShow Answer

What is one of the best ways to improve the overall efficiency and effectiveness of the receipt and storage of ordered items?

Correct AnswerverifiedShow Answer

What is a key feature of materials requirements planning (MRP) ?

Correct AnswerverifiedShow Answer

Which of the following threats is not specific to the purchase requisition process of the expenditure cycle?

Correct AnswerverifiedShow Answer

The document below would be known as what by Alpha Omega Electronics?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Answers can include the following inform...
View Answer

Duties in the expenditure cycle should be properly segregated to promote internal control.This means that the authorization function is performed by ,the recording function is performed by ,and cash handling is performed by the .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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