chap 5 Flashcards
Purchasing decisions are authorized by inventory control
T
The blind copy of the purchase order that goes to the receiving department contains no item descriptions.
F
Firms that wish to improve control over cash disbursements use a voucher system.
T
In a voucher system, the sum of all unpaid vouchers in the voucher register equals the firm’s total voucher payable balance.
T
The accounts payable department reconciles the accounts payable subsidiary ledger to the control account.
F
The use of inventory reorder points suggests the need to obtain specific authorization.
F
Proper segregation of duties requires that the responsibility approving a payment be separated from posting to the cash disbursements journal.
T
A major risk exposure in the expenditure cycle is that accounts payable may be overstated at the end of the accounting year.
F
When a trading partner agreement is in place, the traditional three way match may be eliminated.
T
Authorization of purchases in a merchandising firm occurs in the inventory control department.
T
A three way match involves a purchase order, a purchase requisition, and an invoice.
F
Authorization for a cash disbursement occurs in the cash disbursement department upon receipt of the supplier’s invoice
F
An automated cash disbursements system can yield better cash management since payments are made on time.
T
Permitting warehouse staff to maintain the only inventory records violates separation of duties.
T
A purchasing system that employs electronic data interchange does not use a purchase order.
F
