Nothing Special   »   [go: up one dir, main page]
Scribd Logo
Upload

Welcome to Scribd!

  • 28 views

    Test Chuong 07 - Expenditure Cycle - TLHD

    Uploaded by

    Ly Ly
    This document contains questions and answers related to key concepts in the expenditure cycle of a business. It addresses topics like receiving and storing goods, inventory management approaches like economic order quantity and just-in-time production, materials requirements planning, vendor selection criteria, types of purchase orders, the accounts payable process, and controls to mitigate risks in the expenditure cycle.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Test Chuong 07 - Expenditure Cycle - TLHD

    Uploaded by

    Ly Ly
    28 views3 pages
    This document contains questions and answers related to key concepts in the expenditure cycle of a business. It addresses topics like receiving and storing goods, inventory management approaches like economic order quantity and just-in-time production, materials requirements planning, vendor selection criteria, types of purchase orders, the accounts payable process, and controls to mitigate risks in the expenditure cycle.

    Original Description:

    Test_ Systems Accounting

    Original Title

    Test chuong 07 - Expenditure Cycle - TLHD

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document contains questions and answers related to key concepts in the expenditure cycle of a business. It addresses topics like receiving and storing goods, inventory management approaches like economic order quantity and just-in-time production, materials requirements planning, vendor selection criteria, types of purchase orders, the accounts payable process, and controls to mitigate risks in the expenditure cycle.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    28 views3 pages

    Test Chuong 07 - Expenditure Cycle - TLHD

    Uploaded by

    Ly Ly
    This document contains questions and answers related to key concepts in the expenditure cycle of a business. It addresses topics like receiving and storing goods, inventory management approaches like economic order quantity and just-in-time production, materials requirements planning, vendor selection criteria, types of purchase orders, the accounts payable process, and controls to mitigate risks in the expenditure cycle.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    LO1 Describe the basic business activities and related information processing

    operations performed in the expenditure cycle.


    LO1.1. One of the basic activities in the expenditure cycle is the receiving and storage
    of goods, supplies, and services. What is the counterpart of this activity in the revenue
    cycle?
    A) sales order entry process B) shipping function
    C) cash collection activity D) cash payments activity

    LO1.2. The traditional approach to inventory management to ensure sufficient


    quantity on hand to maintain production is known as
    A) safety stock. B) just-in-time production
    C) economic order quantity. D) optimal inventory quantity

    LO1.3. The EOQ calculation that considers loss sales or production delays is:
    a. carrying costs b. stockout costs
    c. reorder point d.ordering costs

    LO1.4. The ________ specifies the point at which inventory is needed.


    A) company inventory policies B) reorder point
    C) economic order quantity D) stockout point
    LO1.5. The approach to managing inventory that is based on forecasted sales to
    schedule production is:
    a. IBM b. EOQ c. MRP d. JIT

    LO1.6. What is the key difference between the MRP and JIT inventory management
    approaches?
    A) Only JIT reduces costs and improves efficiency.
    B) MRP is especially useful for products such as fashion apparel.
    C) JIT is more effectively used with products that have predictable patterns of
    demand.
    D) MRP schedules production to meet estimated sales needs; JIT schedules
    production to meet customer demands.

    LO1.7. When would an MRP inventory approach be a preferred to a JIT inventory


    approach?
    A) when a product has a short life cycle
    B) when demand for inventory is fairly predictable
    C) when demand for inventory is very unpredictable
    D) MRP is always a preferred method over JIT.

    LO1.8. ________ attempts to minimize or eliminate carrying and stockout costs.


    A) Just-in-time inventory B) Materials requirements planning
    C) Economic order quantity D) Evaluated receipt settlement
    LO1.9. Which of the following is least likely to be a major criterion in vendor
    selection?
    A) prices of goods B) credit rating of the vendor
    C) quality of goods D) ability to deliver on time

    LO1.10. Duc An Incorporated provides free coffee to employees. Starbucks delivers


    coffee packages, sugar, creamer, and filters each week. Every month, Starbucks sends
    Duc An an invoice. This arrangement is best described as a
    A) set purchase order. B) fixed purchase order.
    C) blanket purchase order. D) standard purchase order.

    LO1.11. The major cost driver in the purchasing function is


    a .the number of purchase orders processed b. the price of the items purchased
    c. the reputation of the supplier d.none of the above.

    LO1.12. A receiving report is typically not used for


    a.low cost supply items b.items ordered on blanket purchase orders
    c.receipt of services d.reoccurring items

    LO1.13. Identify in which of the following scenarios a company could adjust the
    balance due the vendor by issuing a debit memo.
    A) quantity different from that ordered B) damage to the goods
    C) goods that fail inspection for quality D) All of the above are possible scenarios.

    LO1.14. The disbursement voucher and supporting documents are sent to the
    ________ for payment prior to the due date.
    A) cashier B) treasurer C) controller D) accounts payable department

    LO1.15. A(n) ________ system posts an approved invoice to the vendor account and
    stores it in an open invoice file until payment is made by check.
    A) nonvoucher B) voucher C) cycle D) evaluated receipt settlement
    LO1.16. A voucher package should include
    A) a purchase requisition, vendor invoice, and receiving report.
    B) a purchase order, vendor invoice, and receiving report.
    C) a purchase requisition, purchase order, and receiving report.
    D) a bill of lading and vendor invoice.

    LO1.17. To minimize the number of checks that need to be written to pay vendor
    invoices, a company should use
    A) a voucher system. B) a just-in-time inventory system.
    C) a nonvoucher system. D) an evaluated receipt settlement system

    LO1.18. Once a purchase request is approved, what is the next step?


    A) The system creates a purchase order.
    B) The accounts payable department approves the purchase request, creating a
    purchase order.
    C) The inventory master file is accessed to find the preferred supplier(s).
    D) The department that created the purchase request may buy the requested item(s).
    LO2 Discuss the key decisions to be made in the expenditure cycle, and identify
    the information needed to make those decisions.
    LO2.1. To accomplish the objectives set forth in the expenditure cycle, a number of
    key management decisions must be addressed. Which of the decisions below is not
    ordinarily found as part of the expenditure cycle?
    A) How can cash payments to vendors be managed to maximize cash flow?
    B) What is the optimal level of inventory and supplies to carry on hand?
    C) Where should inventories and supplies be held?
    D) What are the optimal prices for each product or service?
    LO3 Identify major threats in the expenditure cycle, and evaluate the adequacy
    of various control procedures for dealing with those threats.
    LO3.1. Comparing quantities on a vendor invoice to quantities on the receiving report
    would not prevent or detect which of the following situations?
    A) receiving and accepting inventory not ordered
    B) theft of inventory by receiving department employees
    C) update of wrong inventory items due to data entry error
    D) order for an excessive quantity of inventory
    LO3.2. What is the best control to mitigate the threat of paying prices that are too high
    for goods ordered?
    A) Require the receiving department to verify the existence of a valid purchase order.
    B) Use only approved suppliers and solicit competitive bids.
    C) Only pay invoices that are supported by the original voucher package.
    D) Use bar-code technology to eliminate data entry errors.

    You might also like