Chapter19---final

19-1CHAPTER19Multiple-ChoiceQuestions1.Theclassesoftransactionsintheacquisitionandpaymentcycleincludeacquisitionof:easya.goods.db.goodsandservices.c.goodsandservices,andcashdisbursements.d.goodsandservices,cashdisbursements,andpurchasereturnsandallowances.2.Theoverallobjectiveintheauditoftheacquisitionandpaymentcycleis:easya.toensurethereliabilityoftheaffectedaccounts.cb.toensuretheaccuracyoftheaffectedaccounts.c.toevaluatewhethertheaffectedaccountsarefairlystatedinaccordancewithGAAP.d.alloftheabove.3.Theauditoftheacquisitionandpaymentcycleoftentakes____timetoauditthanothercycles.easya.lesscb.aboutthesamec.mored.noless4.Whattypicallyinitiatestheacquisitionsandpaymentcycle?easya.Issuanceofapurchaserequisitionorrequestforpurchaseofgoods/services.ab.Issuanceofpaymenttovendor.c.Approvalofanewvendor.d.Noneoftheabove.5.Whattypicallyendstheacquisitionsandpaymentcycle?easya.Issuanceofapurchaserequisitionorrequestforpurchaseofgoods/services.bb.Issuanceofapaymenttoavendor.c.Approvalofanewvendor.d.Noneoftheabove.6.easyThereceiptofgoodsandservicesinthenormalcourseofbusinessrepresentsthedateclientsnormallyrecognize:ba.income.b.theliability.c.warrantyassets.d.expenses.7.Whichofthefollowingaccountsisnotincludedintheacquisitionsclassoftransactions?easya.Inventory.cb.Prepaidexpenses.c.Purchasediscounts.d.Accountspayable.19-28.Adocumentindicatingareductionintheamountowedtoavendorbecauseofreturnedgoodsis:easya.adebitmemo.ab.acreditmemo.c.areceivingroomreport.d.ashippingroomreport.9.easyAdocumentusedbyorganizationstoestablishaformalmeansofrecordingandcontrollingacquisitionswhichusuallycontainsapackageofdocumentsabouttheacquisitionisthe:aa.voucher.b.purchaseorder.c.receivingreport.d.purchaserequisition.10.Theaccountspayableaccountincludesobligationsfortheacquisitionof:easya.rawmaterials.db.equipment.c.utilities.d.allthreeoftheabove.11.easyComparingexpensestoprioryearsisaneffectiveanalyticalprocedureforaccountspayablebecauseexpensesfromyeartoyearare:da.erratic.b.variable.c.dynamic.d.relativelystable.12.Theoverallobjectiveintheauditofaccountspayableistodeterminewhetheraccountspayable:easya.isfairlystatedandproperlydisclosed.ab.isoverstated.c.isunderstated.d.isaccuratelystated.13.Atwhatpointdomostcompaniesrecognizeliabilitiesintheacquisitionandpaymentcycle?easya.Theissuanceofapurchaseorder.cb.Receiptofacknowledgementoforderbyvendor.c.Receiptofgoodsorservices.d.Anyoftheabove.14.easyThiscomputer-generatedfilerecordsacquisitions,disbursementsandallowancesforeachvendor.aa.Accountspayablemasterfileb.Cashdisbursementsfile.c.Acquisitionstransactionfile.d.Anyoftheabove.15.Thisisacomputer-generatedfilethatincludesallacquisitiontransactionsduringagivenperiod.easya.Accountspayablefilecb.Cashdisbursementsfile.c.Acquisitionstransactionfile.d.Anyoftheabove.19-316.Themajorbalancesheetaccountintheacquisitionandpaymentcycleis:mediuma.Notespayable.cb.Accrualspayable.c.Accountspayable.d.Accruedliabilities.17.mediumWhichofthefollowingbusinessfunctionsisnotconsideredtobepartoftheacquisitionsclassoftransactions?da.Processingpurchaseorders.b.Recognizingliabilities.c.Receivinggoodsandservices.d.Processingcashdisbursements.18.Itusuallytakesmoretimetoaudittheacquisitionandpaymentcyclethanothercyclesbecause:mediuma.thereisagreaterpossibilityoffraudinthesetransactions.cb.internalcontrolsinthisareaareusuallytheweakest.c.ofthelargenumberofaccountsaffected.d.thereisagreaterlikelihoodoflawsuitsagainsttheCPArelatingtotheseaccounts.19.Awrittenpurchaseorderisalegaldocumentthatis:mediuma.anoffertobuy.ab.notenforceableifitisnotinwriting.c.abindingagreementbetweenpurchaserandvendor.d.anacceptanceofavendor’scatalogoffertosell.20.Forgoodinternalcontrol,thepurchasingdepartmentshouldnotberesponsiblefor:mediuma.findingthelowestcostvendor.db.reviewingvendors’catalogdescriptionsandpricesforstandardizeditems.c.designingthepurchaseorderform.d.authorizingtheacquisitionofgoods.21.Onceacheckissignedbyanauthorizedpersonitis:mediuma.aliabilitybb.anassetc.bearerinstrumentd.noneoftheabove22.mediumTheaccountspayabledepartmentusuallyhasresponsibilityforverifyingtheproprietyofacquisitionsbycomparingthedetailsonthe:ca.vendor’sinvoiceandthereceivingreport.b.vendor’sinvoiceandthepurchaserequisition.c.purchaseorder,receivingreport,andvendor’sinvoice.d.purchaserequisition,purchaseorder,andreceivingreport.23.Testsofcontrolsfortheacquisitionandpaymentcycleareusuallydividedinto:mediuma.testsofacquisitionsandclassification.db.testsofauthorizationandacquisition.c.testsofauthorizationanddisbursement.d.testsofacquisitionsanddisbursements.19-424.mediumManycompaniesdonotmaintainanaccountspayablemasterfilebyvendor.Thesecompaniespayonthebasisof:ba.vendors’monthlystatements.b.individualvendors’invoices.c.theaccountspayableaccountinthegeneralledger.d.dunningletters.25.mediumAnimportantcontrolintheaccountspayableandITdepartmentsistoensurethatthosepersonnelwhorecordacquisitionsdonothaveaccessto:da.vendors’pricelists.b.theaccountspayablemasterfile.c.listsofvendors’namesandaddresses.d.cash,marketablesecuriti