BUS 319 FINAL EXAM (remaining chs)

The documents in a voucher packet include all of the following except a. a check b. a purchase order c. a receiving report d. a supplier's invoice

A

The printer ran out of preprinted sales invoice forms and several sales invoices were not printed. The best internal control to detect this error is a. a batch total of sales invoices to be prepared compared to the actual number of sales invoices prepared b. sequentially numbered sales invoices c. visual verification that all sales invoices were prepared d. none of the above will detect this error

A

Which document is least important in determining the financial value of a purchase? a. purchase requisition b. purchase order c. receiving report d. supplier's invoice

A

Supervision in receiving is intended to reduce the theft of assets.

T

The cash receipts journal is a special journal.

T

The principal source document in the sales order system is the sales order.

T

The purpose of the invoice is to bill the customer.

T

Good internal controls in the revenue cycle should ensure all of the following except a. all sales are profitable b. all sales are recorded c. credit is authorized d. inventory to be shipped is not stolen

A

A weekly reconciliation of cash receipts would include comparing a. the cash prelist with bank deposit slips b. the cash prelist with remittance advices c. bank deposit slips with remittance advices d. journal vouchers from accounts receivable and general ledger

A

Because of time delays between receiving inventory and making the journal entry a. liabilities are usually understated b. liabilities are usually overstated c. liabilities are usually correctly stated d. none of the above

A

Copies of the sales order can be used for all of the following except a. purchase order b. credit authorization c. shipping notice d. packing slip

A

In a merchandising firm, authorization for the purchase of inventory is the responsibility of a. inventory control b. purchasing c. accounts payable d. cash disbursements

A

Internal controls for handling sales returns and allowances do not include a. computing bad debt expense using the percentage of credit sales b. verifying that the goods have been returned c. authorizing the credit memo by management d. using the original sales invoice to prepare the sales returns slip

A

The billing department is not responsible for a. updating the inventory subsidiary records b. recording the sale in the sales journal c. notifying accounts receivable of the sale d. sending the invoice to the customer

A

The customer open order file is used to a. respond to customer queries b. fill the customer order c. ship the customer order d. authorize customer credit

A

The purpose of the purchase order is to a. order goods from vendors b. record receipt of goods from vendors c. authorize the purchasing department to order goods d. approve payment for goods received

A

The receiving report is used to a. accompany physical inventories to the storeroom or warehouse b. advise the purchasing department of the dollar value of the goods delivered c. advise general ledger of the accounting entry to be made d. advise the vendor that the goods arrived safely

A

Which of following functions should be segregated? a. opening the mail and making the journal entry to record cash receipts b. authorizing credit and determining reorder quantities c. maintaining the subsidiary ledgers and handling customer queries d. providing information on inventory levels and reconciling the bank statement

A

Which of the following is not a risk exposure in a microcomputer accounting system? a. reliance on paper documentation is increased b. functions that are segregated in a manual environment may be combined in a microcomputer accounting system c. backup procedures require human intervention d. data are easily accessible

A

Which situation indicates a weak internal control structure? a. the mailroom clerk authorizes credit memos b. the record keeping clerk maintains both accounts receivable and accounts payable subsidiary ledgers c. the warehouse clerk obtains a signature before releasing goods for shipment d. the accounts receivable clerk prepares customer statements every month

A

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

T

Customers should be billed for backorders when a. the customer purchase order is received b. the backordered goods are shipped c. the original goods are shipped d. customers are not billed for backorders because a backorder is a lost sale

B

A remittance advice is a. used to increase (debit) an account receivable by the cash received b. is a turn-around document c. is retained by the customer to show proof of payment d. none of the above

B

An advantage of real-time processing of sales is a. the cash cycle is lengthened b. current inventory information is available c. hard copy documents provide a permanent record of the transaction d. data entry errors are corrected at the end of each batch

B

Commercial accounting systems have fully integrated modules. The word "integrated" means that a. segregation of duties is not possible b. transfer of information among modules occurs automatically c. batch processing is not an option d. separate entries are made in the general ledger accounts and the subsidiary ledgers

B

Periodically, the general ledger department receives all of the following except a. total increases to accounts receivable b. total of all sales backorders c. total of all sales d. total decreases in inventory

B

The purchase order a. is the source document to make an entry into the accounting records b. indicates item description, quantity, and price c. is prepared by the inventory control department d. is approved by the end-user department

B

The purpose of the receiving report is to a. order goods from vendors b. record receipt of goods from vendors c. authorize the purchasing department to order goods d. bill for goods delivered

B

The reason that a blind copy of the purchase order is sent to receiving is to a. inform receiving when a shipment is due b. force a count of the items delivered c. inform receiving of the type, quantity, and price of items to be delivered d. require that the goods delivered are inspected

B

The revenue cycle consists of a. one subsystem-order entry b. two subsystems-sales order processing and cash receipts c. two subsystems-order entry and inventory control d. three subsystems-sales order processing, credit authorization, and cash receipts

B

Usually specific authorization is required for all of the following except a. sales on account which exceed the credit limit b. sales of goods at the list price c. a cash refund for goods returned without a receipt d. write off of an uncollectible account receivable

B

Usually the open voucher payable file is organized by a. vendor b. payment due date c. purchase order number d. transaction date

B

Which control does not help to ensure that accurate records are kept of customer accounts and inventory? a. reconcile accounts receivable control to accounts receivable subsidiary b. authorize credit c. segregate custody of inventory from record keeping d. segregate record keeping duties of general ledger from accounts receivable

B

Which department is least likely to be involved in the revenue cycle? a. credit b. accounts payable c. billing d. shipping

B

Which document triggers the revenue cycle? a. the sales order b. the customer purchase order c. the sales invoice d. the journal voucher

B

Which of the following statements is not correct? a. the voucher system is used to improve control over cash disbursements b. the sum of the paid vouchers represents the voucher payable liability of the firm c. the voucher system permits the firm to consolidate payments of several invoices on one voucher d. many firms replace accounts payable with a voucher payable system

B - ==>SUM OF UNPAID VOUCHERS = VOUCHER PAYABLE LIABILITY OF FIRM

Adjustments to accounts receivable for payments received from customers is based upon a. the customer's check b. the cash prelist c. the remittance advice that accompanies payment d. a memo prepared in the mailroom

C

All of the following are advantages of real-time processing of sales except a. The cash cycle is shortened b. Paper work is reduced c. Incorrect data entry is difficult to detect d. Up-to-date information can provide a competitive advantage in the marketplace

C

At which point is supervision most critical in the cash receipts system? a. accounts receivable b. general ledger c. mail room d. cash receipts

C

In a merchandising firm, authorization for the payment of inventory is the responsibility of a. inventory control b. purchasing c. accounts payable d. cash disbursements

C

In the expenditure cycle, general ledger does not a. post the journal voucher from the accounts payable department b. post the account summary from inventory control c. post the journal voucher from the purchasing department d. reconcile the inventory control account with the inventory subsidiary summary

C

The accounts receivable clerk destroys all invoices for sales made to members of her family and does not record the sale in the accounts receivable subsidiary ledger. Which procedure will not detect this fraud? a. prenumber and sequence check all invoices b. reconcile the accounts receivable control to the accounts receivable subsidiary ledger c. prepare monthly customer statements d. reconcile total sales on account to the debits in the accounts receivable subsidiary ledger

C

The cash disbursement clerk performs all of the following tasks except a. reviews the supporting documents for completeness and accuracy b. prepares checks c. signs checks d. marks the supporting documents paid

C

The credit department a. prepares credit memos when goods are returned b. approves credits to accounts receivable when payments are received c. authorizes the granting of credit to customers d. none of the above

C

The data processing method that can shorten the cash cycle is a. batch, sequential file processing b. batch, direct access file processing c. real-time file processing d. none of the above

C

The open purchase order file in the purchasing department is used to determine a. the quality of items a vendor ships b. the best vendor for a specific item c. the orders that have not been received d. the quantity of items received

C

The purpose of the purchase requisition is to a. order goods from vendors b. record receipt of goods from vendors c. authorize the purchasing department to order goods d. bill for goods delivered

C

The purpose of the sales invoice is to a. record reduction of inventory b. transfer goods from seller to shipper c. bill the customer d. select items from inventory for shipment

C

The reconciliation that occurs in the shipping department is intended to ensure that a. credit has been approved b. the customer is billed for the exact quantity shipped c. the goods shipped match the goods ordered d. inventory records are reduced for the goods shipped

C

To maintain a good credit rating and to optimize cash management, cash disbursements should arrive at the vendor's place of business a. as soon as possible b. on the due date c. on the discount date d. by the end of the month

C

Which department prepares the bill of lading? a. sales b. warehouse c. shipping d. credit

C

Which document is included with a shipment sent to a customer? a. sales invoice b. stock release form c. packing slip d. shipping notice

C

Which journal is not used in the revenue cycle? a. cash receipts journal b. sales journal c. purchases journal d. general journal

C

All of the following departments have a copy of the purchase order except a. the purchasing department b. the receiving department c. accounts payable d. general ledger

D

EDI trading partner agreements specify all of the following except a. selling price b. quantities to be sold c. payment terms d. person to authorize transactions

D

The adjustment to accounting records to reflect the decrease in inventory due to a sale occurs in the a. warehouse b. shipping department c. billing department d. inventory control department

D

The financial value of a purchase is determined by reviewing the a. packing slip b. purchase requisition c. receiving report d. supplier's invoice

D

The most effective internal control procedure to prevent or detect the creation of fictitious credit memoranda for sales returns is to a. supervise the accounts receivable department b. limit access to credit memoranda c. prenumber and sequence check all credit memoranda d. require management approval for all credit memoranda

D

The revenue cycle utilizes all of the following files except a. credit memo file b. sales history file c. shipping report file d. cost data reference file

D

The shipping notice a. is mailed to the customer b. is a formal contract between the seller and the shipping company c. is always prepared by the shipping clerk d. informs the billing department of the quantities shipped

D

The stock release copy of the sales order is not used to a. locate and pick the items from the warehouse shelves b. record any out-of-stock items c. authorize the warehouse clerk to release custody of the inventory to shipping d. record the reduction of inventory

D

When a cash disbursement in payment of an accounts payable is recorded a. the liability account is increased b. the income statement is changed c. the cash account is unchanged d. the liability account is decreased

D

When a copy of the receiving report arrives in the purchasing department, it is used to a. adjust perpetual inventory records b. record the physical transfer of inventory from receiving to the warehouse c. analyze the receiving department's process d. recognize the purchase order as closed

D

When purchasing inventory, which document usually triggers the recording of a liability? a. purchase requisition b. purchase order c. receiving report d. supplier's invoice

D

A cash prelist is a. a document that records sales returns and allowances b. a document returned by customers with their payments c. the source of information used to prepare monthly statements d. none of the above

D - Another name is the remittance list; basically a list of recorded cash receipts (who has paid) is then compared to bank deposit slips

A bill of lading is a request for payment for shipping charges.

F

A major risk exposure in the expenditure cycle is that accounts payable may be overstated at the end of the accounting year.

F

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

F

Authorization for a cash disbursement occurs in the cash disbursement department upon receipt of the supplier's invoice.

F

If a customer submits a written purchase order, there is no need to prepare a sales order.

F

In a computerized accounting system, segregation of functions refers to inventory control, accounts receivable, billing, and general ledger tasks.

F

Inspection of shipments in the receiving department would be improved if the documentation showed the value of the inventory.

F

Inventory control has physical custody of inventory.

F

Inventory control should be located in the warehouse.

F

Sales return involves receiving, sales, credit, and billing departments, but not accounts receivable.

F

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

F

The blind copy of the purchase order that goes to the receiving department contains no item descriptions.

F

The packing slip is also known as the shipping notice.

F

The use of inventory reorder points suggests the need to obtain specific authorization.

F

In the revenue cycle, the internal control "limit access" applies to physical assets only.

F - In most large organizations, the journal voucher file has replaced the formal general journal.

The bill of lading is a legal contract between the buyer and the seller.

F - formal contract between seller and shipping company

A written customer purchase order is required to trigger the sales order system.

F- does not need to be written

Warehouse stock records are the formal accounting records for inventory.

F- informal

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

F- purchase order, invoice, receiving order

Proper segregation of duties requires that the responsibility approving a payment be separated from posting to the cash disbursements journal.

T

Purchasing decisions are authorized by inventory control.

T

Sales orders should be prenumbered documents.

T

A remittance advice is a form of turn-around document.

T

An automated cash disbursements system can yield better cash management since payments are made on time.

T

Another name for the stock release form is the picking ticket.

T

Authorization of purchases in a merchandising firm occurs in the inventory control department.

T

Firms that wish to improve control over cash disbursements use a voucher system.

T

If accounts payable receives an invoice directly from the supplier it needs to be reconciled with the purchase order and receiving report.

T

In a voucher system, the sum of all unpaid vouchers in the voucher register equals the firm's total voucher payable balance.

T

In most large organizations, the journal voucher file has replaced the formal general journal.

T

In point of sale systems, authorization takes the form of validation of credit card charges.

T

In real-time processing systems, routine credit authorizations are automated.

T

Integrated accounting systems automatically transfer data between modules.

T

One reason for authorizing purchases is to enable efficient inventory management.

T

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

T