Purchase Cycle Practice Test
the greatest amount of internal and business process control in the cash disbursements process comes from
a final review of transaction documents prior to the authorization of payment
which of the following accesses the purchase order database during the processing of a purchase order
accounts payable, stores, and the receiving department
which of the following procedures, noted by an auditor during a preliminary survey of the payroll function, indicates inadequate control
all unclaimed payroll checks are returned to the payroll clerk for disposition
vendors found on a company's approved vendor list should possess the attribute of
an approved vendor should possess all of these attributes
in a properly designed accounts payable system, a voucher is prepared after the invoice, purchase order, requisition, and receiving report are verified. The next step in the system is to
approve the voucher for payment
the authority to accept incoming goods in receiving should be based on
approved purchase order
The purpose of segregating the duties of hiring personnel and distributing payroll checks is to separate the
authorization of transactions from the custody of related assets
which of the following procedures in the cash disbursements cycle should not be performed by the accounts payable department
canceling supporting documents after payment
among the following pair of functions, which pair represents the most serious internal control weakness when the duties are performed by the same individual
cash disbursement and verification of vendor incoices
To avoid potential errors and irregularities, a well-designed system of internal accounting control in the accounts payable area should include a separation of which the following functions
cash disbursements and vendor invoice verification
to avoid potential errors and irregularities, a well-designed system of internal accounting control in the accounts payable area should include a separation of which of the following functions
cash disbursements and vendor invoice verification
which of the following would be the most appropriate test to determine whether purchase orders are being processed on a timely basis
compare dates of selected purchase orders with those of purchase requisitions
which of the following control procedures is not usually performed in the vouchers payable department
controlling the mailing of the check nad remittance advice
with respect to the segregation of duties, the main function of cash disbursements is
custody of assets
a CPA reviews a client's payroll procedures. The CPA would consider internal control to be less than effective if a payroll department supervisor was assigned the responsibility
distributing payroll checks to employees
proper internal control over the cash payroll function would mandate which of the following
each employee should be asked to sign a receipt
for effective internal control purposes, the vouchers payable department should generally
establish the agreement of the vendor's invoice with the receiving report and purchase order
Matching the supplier's invoice, the purchase order, and the receiving report normally should be the responsibility of the
general accounting function
the best way to prevent improper buyer-vendor relationships is to
have formal written policies and procedures over procurement
on receipt of a requisition, the stores manager initiates a three-part purchase order. Two copies go to the vendor, and one copy stays in the stores file. On receipt of goods, the stores manager matches the purchase order with the invoice and forwards them to accounts payable for payment. which of the following statements best describes the internal control over purchasing
inadequate separation of duties exists
the function responsible for reconciling the bank account upon which voucher checks are drawn is
internal audit
For the most effective internal accounting control, monthly bank statement should be received directly from the banks and reviewed by the
internal auditor
which of the following is the most effective control procedure to detect vouchers that were prepared for the payment of goods that were not received
match purchase order, receiving report, and vendor's invoice for each voucher in the accounts payable department
the department responsible for the actual computation and preparation of payroll is
payroll department
which of the following departments should have the responsibility for authorizing payroll rate changes
personnel
which of the following should not have access to signed paychecks
personnel, payroll, and timekeeping
a document which identifies a vendor and confirms the quantity and price of goods identified in it is called
purchase order
jackson, the purchasing agent of judd hardware wholesalers, has a relative who owns retail hardware store. jackson arranged for hardwareto be delivered by manufacturers to the retail store on a COD basis, thereby enabling his relative to buy at Judd's wholesale prices. Jackson probably was able to accomplish this because of judd's poor internal control over
purchase orders
which of the following controls would be most effective in ensuring that recorded purchases are free of material errors
purchase orders, receiving reports, and vendor invoices are matched independently in preparing vouchers
the documents which accounts payable should use to verify a purchase transaction are
purchase requisition, invoice, receiving report, and purchase order
the department or function that is responsible to selecting a vendor to order materials from is
purchasing
which of the following normally receives a copy of the purchase requisition
purchasing
internal accounting control is strengthened when the quantity of merchandise ordered is omitted from the copy of the purchase order sent to
receiving department
which of the following constitutes the most significant risk within the purchasing cycle
receiving department personnel sign receiving documents without inspecting or counting the goods
for effective internal control, the accounts payable department should compare the information on each vendor's invoice with the
receiving report and the purchase order
to determine whether accounts payable are complete, an auditor performs a test to verify that all merchandise received is recorded. The population of documents for this test consists of
receiving reports
to determine whether accounts payable are complete, an auditor performs a test to verify that all merchandise received is recorded. the population of documents for this test consists of all
receiving reports
for internal control purposes, which of the following individuals should be responsible for the distribution of payroll checks
receptionist
the primary objective of a voucher system is to
review cash payments
to do a blind count, the receiving department
should receive a copy of the purchase order with the quantities omitted
in a properly designed internal accounting control system, the same employee may be permitted to
sign checks and also cancel supporting documents
an effective internal accounting control measure that protects against the preparation of improper or inaccurate disbursements would be to require that all checks be
signed by an officer after necessary supporting evidence has been examined
which of the following is an effective internal accounting control over cash payments
signed checks should be mailed under the supervision of the check signer
mailing disbursement checks and remittance advices should be controlled by the employee who
signs the checks last
which of the following procedures most likely would be considered a weakness in an entity's internal controls over payroll
the employee who distributes payroll checks returns unclaimed payroll checks to the payroll department
which of the following in an internal control procedure would prevent a paid disbursement voucher from being presented for payment a second time
the official signing the check should compare the check with the voucher and should deface the voucher documents
which one of the following represents a weakness in internal control regarding the human resources area
the payroll staff distributes paychecks to employees in other departments
which of the following reviews and approves the purchase order prior to its further processing
the requesting department
the department responsible for collecting and maintaining time cards and reconciling these to job time summary tickets is the
timekeeping department
which of the following is not a major control feature of the cash disbursements business process
use of an imprest fund
when goods are received, the receiving clerk should match the goods with the
vendor's shipping document and the purchase order
effective internal control procedures over the payroll function may include
verification of agreement of job-time tickets with employee clock card hours by a payroll department employee