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