QUIZ #5: THE EXPENDITURE CYCLE PART I – PURCHASES AND CASH DISBURSEMENTS

PROCEDURES

1. It contributes to both control and efficiency by listing only those vendors approved to do
business with the organization.
a. Voucher System
b. Valid Vendor File
c. Blind Copy of the Purchase Order
d. Receiving Report
2. These procedures include the tasks involved in identifying inventory needs, placing the
order, receiving the inventory and recognizing the liability.
a. Cash Disbursement System
b. Sales Forecasting
c. Financial Reporting
d. Purchases Processing Procedures
3. Which document helps to ensure that the receiving clerks actually count the number of
goods received?
a. Packing List
b. Blind Copy of Purchase Order
c. Shipping Notice
d. Invoice
4. The reconciliation of this document with the PO signifies that the organization has a
legitimate obligation.
a. Invoices
b. Purchase Orders
c. Purchase Requisitions
d. Receiving Reports
5. This document should reconcile with the purchase requisition.
a. Invoices
b. Purchase Orders
c. Checks
d. Receiving Reports
6. In this department a multipart purchase order is prepared to be sent to the vendor, AP,
receiving, data processing, and purchasing department file.
a. Data Processing Department
b. Receiving Department
c. Purchasing Department
d. Accounts Payable Department
7. After receiving the purchase order in data processing department, an open purchase order
file will be created and the open purchase requisition file will be transferred to close
purchase requisition file.
a. True
b. False
8. This file contains purchase requisition number, inventory number, quantity on order,
vendor number, and the unit standard cost.
a. Open and Close Requisition File
b. Inventory Master File
c. Vendor File
d. Open and Purchase Order File
9. It processes the payment of obligations created in the purchases system.
a. Cash Disbursement System
b. Cash Receipt System
c. Purchases Procedures
d. Sales Reporting
10. This function continually monitors inventory levels. As inventory levels drop to their
predetermined reorder points, it formally authorizes replenishment with a purchase
requisition.
a. Inventory Control
b. Purchase Orders
c. Purchases Subsystem
d. Supervision
11. The reengineered system addresses many of the operational weaknesses associated with
the automated system except:
a. It uses real-time procedures and direct access files to shorten the lag time in record
keeping
b. It eliminates routine clerical procedures by distributing terminals to user areas
c. This system removes the physical separation between authorization and transaction
processing
d. It achieves a significant reduction in paper documents by using digital communications
between departments and by digitally storing records.
12. The automated system of expenditure cycle promotes effective cash management by
scanning the voucher file daily for items due, thus avoiding early payments and missed
due dates.
a. True
b. False
13. The blind copy contains no __________________ information about the products being
received.
a. Quantity or Price
b. Quantity and Price
c. Price or PO Number
d. Price and Terms
14. Upon recording the liability, the AP clerk transfers all source documents to the open AP
file. These source documents include the following except:
a. Purchase Order
b. Receiving Report
c. Disbursement Voucher
d. Invoice
15. This states that there must be a control of access to physical assets. Controls might
include locks, alarms, and restricted access to areas that contain inventories and cash.
a. Theft of Assets
b. Indirect Access
c. Direct Access
d. Supervision