Acquisition and Payments Cycle

Question 1

What is the acquisitions cycle?

Answer 1

1. Recquisition
2. Acquisition
3. Receipt
4. Payment approval
5. Recognition of liability
6. Processing and recording cash dispursements and discounts

Question 2

What are the 6 types of acquisitions?

Answer 2

Inventiory
PPE
Leasehold improvements
Accounts payable
Manufacturing expenses
Selling and administrative expenses

Question 3

What are the 6 types of acquisitions?

Answer 3

Inventiory
PPE
Leasehold improvements
Accounts payable
Manufacturing expenses
Selling and administrative expenses

Question 4

What type of control tests are acquisition cycle tests generally?

Answer 4

Attribute sampling tests

Question 5

What are 2 fraud risks in the acquisition cycle?

Answer 5

Overstatement of inventory or assets
Understatement of expenses or liability