Question 1

Comparing quantities on a vendor invoice to quantities on the receiving report would not prevent or detect which of the following situations?

Accepted Answer

A)   receiving and accepting inventory not ordered
B)   theft of inventory by receiving department employees
C)   update of wrong inventory items due to data entry error
D)   order for an excessive quantity of inventory

Question 2

Which of the following is least likely to be a major criterion in vendor selection?

Accepted Answer

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

Question 3

Which of the following factors is not of key importance when selecting inventory suppliers?

Accepted Answer

A)   product price
B)   vendor corporate structure
C)   product quality
D)   vendor delivery dependability

Question 4

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.

Question 5

Which control would best prevent payments made to fictitious vendors?

Accepted Answer

A)   Allow payments only to approved vendors.
B)   Restrict access to any payment or approval documents.
C)   Have an independent bank reconciliation.
D)   Make sure all documents are in order before approving payments.

Question 6

Although there are some similarities between JIT and MRP,identify one major difference below.

Accepted Answer

A)   production scheduling
B)   reducing the opportunity for inventory theft
C)   reducing inventory carrying costs
D)   requires more analysis than EOQ

Question 7

Ngai Nhung is the sales manager at Hung Technologies.At lunch with the company CEO,Ngai proudly announced that he had negotiated a(n) ________ with a client that represented the customer's long-term commitment to buy components from Hung.

Accepted Answer

A)   purchase order
B)   evaluated receipt settlement
C)   voucher
D)   blanket purchase order

Question 8

Explain what is meant by the expenditure cycle as a "mirror image" of the revenue cycle.

Accepted Answer

The expenditure cycle has been called a ...

Question 9

One of the basic activities in the expenditure cycle is the receiving and storage of goods,supplies,and services.What is the counterpart of this activity in the revenue cycle?

Accepted Answer

A)   sales order entry process
B)   shipping function
C)   cash collection activity
D)   cash payments activity

Question 10

The management at Barks-a-Million is considering a new inventory control system.The current system is inadequate because it frequently causes stockouts that interrupt production and lead to excess stock of other materials - resulting in markdowns and high carrying costs.The new system,which will focus on forecasting demand for Sad Clown's products,will likely employ

Accepted Answer

A)   a just-in-time inventory system.
B)   the economic order quantity.
C)   materials requirements planning.
D)   a reorder point.

Question 11

Anong Mali is the purchasing manager at Wattana Technologies.She has responsibility for reviewing and authorizing purchase orders.She also reviews receiving reports,approves or corrects them,and authorizes the cashier to pay vendor invoices.Which of the following would correct control weaknesses related to these activities?

Accepted Answer

A)   Controls are adequate under the current system.
B)   Vendor invoices should be reviewed by accounts receivable and then cancelled when paid.
C)   Vendor invoices should be reviewed by the purchasing manager to ensure that they are correct.
D)   Accounts payable should reconcile purchase orders, receiving reports, and invoices.

Question 12

The first major business activity in the expenditure cycle is

Accepted Answer

A)   ordering inventory, supplies, or services.
B)   a customer sale.
C)   shipping goods to customers.
D)   receiving goods from vendors.

Question 13

Ngai Nhung is the sales manager at Hung Technologies.At lunch with the company CEO,Ngai proudly announced that he had received a ________ from a client.The client had just requested a large quantity of components from Hung.

Accepted Answer

A)   blanket purchase order
B)   voucher
C)   purchase order
D)   purchase requisition

Question 14

One objective of accounts payable is to authorize payment only for goods or services actually ordered and received.The best way to process supplier invoices is to use

Accepted Answer

A)   electronic funds transfer for small, occasional purchases from suppliers.
B)   a nonvoucher system.
C)   EDI for all small, occasional purchases from suppliers.
D)   a disbursement voucher system.

Question 15

a)What is the major cost driver in the purchasing function? b)Describe how information technology can be used to control this cost driver.

Accepted Answer

a)The major cost driver in the purchasing function is the number of purchase orders processed.
b)The number of purchase orders can be reduced or streamlined by: Electronic data interchange (EDI)for transmitting purchase orders to vendors.Use procurement cards for small dollar and small quantity purchases of non-inventory items.Reduce clerical costs by using the Internet to perform certain purchasing functions.Use vendor-managed inventory programs to reduce purchasing and inventory costs.Implement reverse auctions and pre-award audits.

Question 16

What is the main reason a list of potential alternative suppliers be maintained?

Accepted Answer

A)   in case the primary supplier is out of stock
B)   so the firm can sample different suppliers
C)   in case the primary supplier is more expensive
D)   to segregate purchasing suppliers

Question 17

The management at Barks-a-Million is considering a new inventory control system.The current system is inadequate because it frequently causes 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 reducing or completely eliminating carrying costs,most likely employing

Accepted Answer

A)   a just-in-time inventory system.
B)   a reorder point.
C)   materials requirements planning.
D)   the economic order quantity. A

Question 18

The Gwallter Reece Chihuahua Sweater Co.(GRCCo) was established in 2013.It recently signed a large contract with PetCo pet stores.GRCCo will be required to track and forecast sweater sales.The technology that is used for communication between GRCCo and PetCo is

Accepted Answer

A)   electronic data interchange.
B)   vendor-managed inventory.
C)   sales force automation.
D)   optical character recognition.

Question 19

An important control that can be used to reduce the risk of employee kickbacks is

Accepted Answer

A)   surveillance cameras.
B)   job rotation.
C)   off-site restrooms.
D)   use of ID badges. B

Question 20

The disbursement voucher and supporting documents are sent to the ________ for payment prior to the due date.

Accepted Answer

A)   cashier
B)   treasurer
C)   controller
D)   accounts payable department

Exam 13: The Expenditure Cycle: Purchasing to Cash Disbursements

Comparing quantities on a vendor invoice to quantities on the receiving report would not prevent or detect which of the following situations?

Correct Answer
verified

Which of the following is least likely to be a major criterion in vendor selection?

Correct Answer
verified

Which of the following factors is not of key importance when selecting inventory suppliers?

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

Which control would best prevent payments made to fictitious vendors?

Correct Answer
verified

Although there are some similarities between JIT and MRP,identify one major difference below.

Correct Answer
verified

Ngai Nhung is the sales manager at Hung Technologies.At lunch with the company CEO,Ngai proudly announced that he had negotiated a(n) ________ with a client that represented the customer's long-term commitment to buy components from Hung.

Correct Answer
verified

Explain what is meant by the expenditure cycle as a "mirror image" of the revenue cycle.

Correct Answer
verified
The expenditure cycle has been called a ...
View Answer

One of the basic activities in the expenditure cycle is the receiving and storage of goods,supplies,and services.What is the counterpart of this activity in the revenue cycle?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The first major business activity in the expenditure cycle is

Correct Answer
verified

Ngai Nhung is the sales manager at Hung Technologies.At lunch with the company CEO,Ngai proudly announced that he had received a ________ from a client.The client had just requested a large quantity of components from Hung.

Correct Answer
verified

One objective of accounts payable is to authorize payment only for goods or services actually ordered and received.The best way to process supplier invoices is to use

Correct Answer
verified

a)What is the major cost driver in the purchasing function? b)Describe how information technology can be used to control this cost driver.

What is the main reason a list of potential alternative suppliers be maintained?

Correct Answer
verified

Correct Answer
verified
A

The Gwallter Reece Chihuahua Sweater Co.(GRCCo) was established in 2013.It recently signed a large contract with PetCo pet stores.GRCCo will be required to track and forecast sweater sales.The technology that is used for communication between GRCCo and PetCo is

Correct Answer
verified

An important control that can be used to reduce the risk of employee kickbacks is

Correct Answer
verified
B

The disbursement voucher and supporting documents are sent to the ________ for payment prior to the due date.

Correct Answer
verified

Exam 13: The Expenditure Cycle: Purchasing to Cash Disbursements

Comparing quantities on a vendor invoice to quantities on the receiving report would not prevent or detect which of the following situations?

Correct AnswerverifiedShow Answer

Which of the following is least likely to be a major criterion in vendor selection?

Correct AnswerverifiedShow Answer

Which of the following factors is not of key importance when selecting inventory suppliers?

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

Which control would best prevent payments made to fictitious vendors?

Correct AnswerverifiedShow Answer

Although there are some similarities between JIT and MRP,identify one major difference below.

Correct AnswerverifiedShow Answer

Ngai Nhung is the sales manager at Hung Technologies.At lunch with the company CEO,Ngai proudly announced that he had negotiated a(n) ________ with a client that represented the customer's long-term commitment to buy components from Hung.

Correct AnswerverifiedShow Answer

Explain what is meant by the expenditure cycle as a "mirror image" of the revenue cycle.

Correct AnswerverifiedThe expenditure cycle has been called a ...View AnswerShow Answer

One of the basic activities in the expenditure cycle is the receiving and storage of goods,supplies,and services.What is the counterpart of this activity in the revenue cycle?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The first major business activity in the expenditure cycle is

Correct AnswerverifiedShow Answer

Ngai Nhung is the sales manager at Hung Technologies.At lunch with the company CEO,Ngai proudly announced that he had received a ________ from a client.The client had just requested a large quantity of components from Hung.

Correct AnswerverifiedShow Answer

One objective of accounts payable is to authorize payment only for goods or services actually ordered and received.The best way to process supplier invoices is to use

Correct AnswerverifiedShow Answer

a)What is the major cost driver in the purchasing function? b)Describe how information technology can be used to control this cost driver.

What is the main reason a list of potential alternative suppliers be maintained?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA

The Gwallter Reece Chihuahua Sweater Co.(GRCCo) was established in 2013.It recently signed a large contract with PetCo pet stores.GRCCo will be required to track and forecast sweater sales.The technology that is used for communication between GRCCo and PetCo is

Correct AnswerverifiedShow Answer

An important control that can be used to reduce the risk of employee kickbacks is

Correct AnswerverifiedB

The disbursement voucher and supporting documents are sent to the ________ for payment prior to the due date.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The expenditure cycle has been called a ...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A

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Correct Answer
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B

Correct Answer
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