Question 1

What is the purpose of the supplier's invoice?

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Question 2

What is the objective of automated purchase approval?

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Question 3

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.
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Accounts payable compares the warehouse memo to the supplier's invoice.Accounts payable prepares a check which the treasurer signs.
Discuss potential internal control risks inherent in this system.

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Question 4

Identify three IT controls in the expenditure cycle.

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Question 5

Discuss the steps taken in the purchasing department in a basic technology expenditure cycle.

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Question 6

Explain why a three-way match may not be required for transactions covered by a trading partner agreement.

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Question 7

What are the six classes of physical internal controls? What is the purpose of these controls?

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Question 8

Assuming the organization uses the perpetual inventory method,what general ledger journal entries are triggered by the purchases system? From which departments do these journal entries arise?

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Question 9

Differentiate between a purchase requisition and a purchase order.

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Question 10

What is the purpose of the purchase requisition?

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Question 11

What is the purpose of the purchase order?

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Question 12

What are steps taken in the receiving department under a basic technology expenditure cycle?

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Question 13

What is the principle objective of the cash disbursement system?

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Question 14

What is an AP packet?

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Question 15

What are the steps taken in the basis technology cash disbursement system?

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Question 16

What is a blind copy of a purchase order and what is its purpose?

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Question 17

What is the purpose of a receiving report? How are copies of the report distributed?

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Question 18

Name the key tasks associated with purchases procedures.

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Question 19

Explain how a voucher payable system works.How is the balance of AP determined?

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Question 20

Where is access control exercised in the purchasing/cash disbursement functions?

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