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

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Question 51

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How does a voucher payable system work? What documents are reconciled? Who prepares the voucher? How is the A/P balance determined? How does the voucher payable system improve control over cash?

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In place of a standard accounts payable ...

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Question 52

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

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Question 53

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Name the key tasks associated with purchases procedures.

What are the key authorization issues in purchasing and cash disbursements?

The accounts payable clerk is responsible for updating the AP Control accounts to reflect each vendor liability.

The Soap Manufacturing Company has three employees who work in the warehouse.All of the warehouse workers are authorized to order inventory when it falls below the reorder level.The workers complete a purchase order and mail it to the supplier of their choice.The inventory is delivered directly to the warehouse.The workers send a memo to accounts payable reporting the receipt of inventory. Accounts payable compares the warehouse memo to the supplier's invoice.Accounts payable prepares a check which the treasurer signs. Describe at least five needed internal control improvements.

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

When purchasing inventory,which document usually triggers the recording of a liability?

Firms can expect that proper use of a valid vendor file will result in all of the following benefits except

In a firm with proper segregation of duties,adequate supervision is most critical in

Of the following duties,it is most important to separate

Usually the open voucher payable file is organized by

What general ledger journal entries are triggered by the purchases system? From which departments do these journal entries arise?

When a cash disbursement in payment of an accounts payable is recorded

When a trading partner agreement is in place,the traditional three way match may be eliminated.

Describe an internal control procedure that would detect that a vendor overcharged for goods delivered.

The receiving department is not responsible to

Permitting warehouse staff to maintain the only inventory records violates separation of duties.

A purchasing system that employs electronic data interchange does not use a purchase order.

Which internally generated document should be compared to the supplier's invoice to verify the quantity being billed for?