ACG 3401 Exam 3 Review 2026
Questions and Answers Graded A+
Procurement/Expenditure Cycle - Correct answer-1. Purchase Requisition
2. Purchasing
3. Receiving/Inspection
4. Accounts Payable
5. Cash Disbursements
Split Expenditure Cycle - Correct answer-Physical Phase (Purchasing) and
Financial Phase (Cash Disbursements)
- split caused by time lag
Payroll Cycle - Correct answer-kept separate from other cash disbursements
Periodic Method - Correct answer-what everybody mostly uses; take a physical
count of goods at end of year; downside is everything that is gone is COGS, even if
it is stolen or destroyed
Perpetual Method - Correct answer-check as the purchase or sale occurs
,Valid Vendor File - Correct answer-only choose from certain approved vendors
- People adding people to vendor file should not be doing anything else in the
vendor system (control)
Receiving Report - Correct answer-report shows that we have received the items
Purchase Requisition - Correct answer-a need to order, usually done by item; list of
quantity and items of what we have ordered
Purchase Order - Correct answer-typically by vendor
Blind Copy - Correct answer-leaves out quantity to force receiving people to count
what's in the box
- Most receiving docs have a lot of supervision
Conservatism - Correct answer-don't understate liabilities or overstate assets
3 way match - Correct answer-Compare Purchase order, receiving report, and the
invoice
always concerned about - Correct answer-unrecorded liabilities
Voucher system used when - Correct answer-you have a separate cash
disbursements and AP department
, Computer Based Accounting Systems have two extremes - Correct answer-
automation - use technology to improve efficiency and effectiveness
reengineering - use technology to restructure business processes and firm
organization
Authorization Controls - Correct answer-- Purchases of inventory should be
authorized by the Inventory Control department, not by purchasing agents
- Accounts Payable authorizes the payments of bills, not the cash disbursements
clerk, who writes the checks
Computer-Based Authorization Controls - Correct answer-Authorizations are
automated.
- programmed decision rules must be debugged
Automating inventory in EDI and JIT
- faulty inventory model can lead to over-purchasing or under-purchasing
Cash disbursements may automate check printing and signing.
- programming logic must be flawless
- automated signing only below a dollar threshold
Separation of valid vendor file and who processes the purchases
Questions and Answers Graded A+
Procurement/Expenditure Cycle - Correct answer-1. Purchase Requisition
2. Purchasing
3. Receiving/Inspection
4. Accounts Payable
5. Cash Disbursements
Split Expenditure Cycle - Correct answer-Physical Phase (Purchasing) and
Financial Phase (Cash Disbursements)
- split caused by time lag
Payroll Cycle - Correct answer-kept separate from other cash disbursements
Periodic Method - Correct answer-what everybody mostly uses; take a physical
count of goods at end of year; downside is everything that is gone is COGS, even if
it is stolen or destroyed
Perpetual Method - Correct answer-check as the purchase or sale occurs
,Valid Vendor File - Correct answer-only choose from certain approved vendors
- People adding people to vendor file should not be doing anything else in the
vendor system (control)
Receiving Report - Correct answer-report shows that we have received the items
Purchase Requisition - Correct answer-a need to order, usually done by item; list of
quantity and items of what we have ordered
Purchase Order - Correct answer-typically by vendor
Blind Copy - Correct answer-leaves out quantity to force receiving people to count
what's in the box
- Most receiving docs have a lot of supervision
Conservatism - Correct answer-don't understate liabilities or overstate assets
3 way match - Correct answer-Compare Purchase order, receiving report, and the
invoice
always concerned about - Correct answer-unrecorded liabilities
Voucher system used when - Correct answer-you have a separate cash
disbursements and AP department
, Computer Based Accounting Systems have two extremes - Correct answer-
automation - use technology to improve efficiency and effectiveness
reengineering - use technology to restructure business processes and firm
organization
Authorization Controls - Correct answer-- Purchases of inventory should be
authorized by the Inventory Control department, not by purchasing agents
- Accounts Payable authorizes the payments of bills, not the cash disbursements
clerk, who writes the checks
Computer-Based Authorization Controls - Correct answer-Authorizations are
automated.
- programmed decision rules must be debugged
Automating inventory in EDI and JIT
- faulty inventory model can lead to over-purchasing or under-purchasing
Cash disbursements may automate check printing and signing.
- programming logic must be flawless
- automated signing only below a dollar threshold
Separation of valid vendor file and who processes the purchases
