ACBS 400B EXAM 2 ACTUAL QUESTIONS
WITH VERIFIED SOLUTIONS
◉ What is the main control of the receiving function?
Answer: competent and trustworthy people must receive the goods
(i.e., take custody of the goods) in a reasonably secure area.
◉ True/False: Once the goods are received, the organization has an
obligation to pay for those goods
Answer: True
◉ When should the custody of inventory and the inventory records
should be updated?
Answer: Receiving Function
◉ What is the objective of the A/P function within the expenditure
cycle?
Answer: to keep track of who to pay, when to pay, and approving
how much to pay your vendors
◉ What is the most important function of the expenditure cycle?
Answer: Accounts Payable. Maintains a company's cash flow and
credit rating
,◉ What is the main control of the A/P function?
Answer: 1. must make sure that the expenses from the vendor
invoices are properly posted in the correct period.
2. the invoice is processed by matching the vendor invoice to either a
copy of the purchase order or a copy of the receiving report
◉ What is the objective of the Cash Disbursements function within
the expenditure cycle?
Answer: To pay the supplier the correct amount at the proper time
◉ What is the main control of the A/P function?
Answer: Once the accounting department approves the invoice for
payment, payment to the vendor is processed (e.g., check written)
and signed by the treasurer's office.
◉ True or False: Delaying payments to a vendor can have a negative
impact on an organization's credit
Answer: True
◉ What are Source Documents?
Answer: generated within the organization or come from outside the
organization and are used as evidence of key data for the
expenditure transaction
,◉ Source Document Life Cycle
Answer: Purchase Requisition -> Purchase Order -> Receiving
Report -> Vendor Invoice or A/P Voucher -> Check
◉ All Source Documents are internal except for:
Purchase Order
Vendor Invoice
AP Voucher
Check
Answer: Vendor Invoice
◉ What is a purchase requisition?
Answer: first document used in the purchasing process, internal
form used to request items from the purchasing manager
◉ What are the controls for a purchase requisition?
Answer: 1. Dating and prenumbering allow the purchase
requisitions to be tracked and periodically accounted for so none go
missing
2. Approved prior to ordering
◉ What is a purchase order?
, Answer: A document sent from a buyer to a vendor to request items
for purchase.
◉ What are the controls for a purchase order?
Answer: 1. document is internal and prenumbered
2. is dated and the purchase authorized by management
◉ True/False: The purchase order is considered a commitment to
the vendor that if the goods are received as ordered, the
organization will pay for them.
Answer: True
◉ What is a receiving report?
Answer: a document that records details about each delivery,
including the date received, shipper, supplier, quantity received, and
quality.
◉ What are the controls for a receiving report?
Answer: 1. should refer back to a purchase order that authorized the
order
2. should be prenumbered and dated
◉ What is the receiving report used for in the accounting period?
WITH VERIFIED SOLUTIONS
◉ What is the main control of the receiving function?
Answer: competent and trustworthy people must receive the goods
(i.e., take custody of the goods) in a reasonably secure area.
◉ True/False: Once the goods are received, the organization has an
obligation to pay for those goods
Answer: True
◉ When should the custody of inventory and the inventory records
should be updated?
Answer: Receiving Function
◉ What is the objective of the A/P function within the expenditure
cycle?
Answer: to keep track of who to pay, when to pay, and approving
how much to pay your vendors
◉ What is the most important function of the expenditure cycle?
Answer: Accounts Payable. Maintains a company's cash flow and
credit rating
,◉ What is the main control of the A/P function?
Answer: 1. must make sure that the expenses from the vendor
invoices are properly posted in the correct period.
2. the invoice is processed by matching the vendor invoice to either a
copy of the purchase order or a copy of the receiving report
◉ What is the objective of the Cash Disbursements function within
the expenditure cycle?
Answer: To pay the supplier the correct amount at the proper time
◉ What is the main control of the A/P function?
Answer: Once the accounting department approves the invoice for
payment, payment to the vendor is processed (e.g., check written)
and signed by the treasurer's office.
◉ True or False: Delaying payments to a vendor can have a negative
impact on an organization's credit
Answer: True
◉ What are Source Documents?
Answer: generated within the organization or come from outside the
organization and are used as evidence of key data for the
expenditure transaction
,◉ Source Document Life Cycle
Answer: Purchase Requisition -> Purchase Order -> Receiving
Report -> Vendor Invoice or A/P Voucher -> Check
◉ All Source Documents are internal except for:
Purchase Order
Vendor Invoice
AP Voucher
Check
Answer: Vendor Invoice
◉ What is a purchase requisition?
Answer: first document used in the purchasing process, internal
form used to request items from the purchasing manager
◉ What are the controls for a purchase requisition?
Answer: 1. Dating and prenumbering allow the purchase
requisitions to be tracked and periodically accounted for so none go
missing
2. Approved prior to ordering
◉ What is a purchase order?
, Answer: A document sent from a buyer to a vendor to request items
for purchase.
◉ What are the controls for a purchase order?
Answer: 1. document is internal and prenumbered
2. is dated and the purchase authorized by management
◉ True/False: The purchase order is considered a commitment to
the vendor that if the goods are received as ordered, the
organization will pay for them.
Answer: True
◉ What is a receiving report?
Answer: a document that records details about each delivery,
including the date received, shipper, supplier, quantity received, and
quality.
◉ What are the controls for a receiving report?
Answer: 1. should refer back to a purchase order that authorized the
order
2. should be prenumbered and dated
◉ What is the receiving report used for in the accounting period?
