SUA Chapter 4 comprehensive Questions and Answers
with 100% Correct Answers | Latest Version
Question 1.
Control Objectives: Purchases/Cash Disbursement Cycle
Correct Answer: 1. All transactions are authorized 2. All transactions are recorded
and summarized at the correct amounts 3. All transactions are correctly classified as
defined by the chart of accounts 4. All transactions are included in the proper period
Question 2.
4 subcycles
Correct Answer: 1. Purchases 2. Cash disbursements 3. Purchases returns and
allowances 4.Period-end: provision for depreciation and adjustments for deferrals
and accruals
Question 3.
Purchases (actions, documents, journals)
Correct Answer: Actions: process purchase orders, receiving goods, record purchase
in journal and subsidiary ledger, summarize journal and post to general ledger
Documents: purchase requisition, purchase order, receiving report, vendor invoice
Journals: purchases, A/P subsidiary ledger, fixed asset subsidiary ledger
Question 4.
Cash disbursements (actions, documents, journals)
Correct Answer: Actions: disburse cash, record cash disbursements in journal and
subsidiary ledger, summarize journal and post to general ledger Documents: check,
disbursement voucher Journals: cash disbursements, A/P subsidiary ledger
Question 5.
Purchase return and allowance (actions, documents, journals)
Correct Answer: Actions: request purchase return or allowance, return goods, record
in journal and subsidiary ledger, summarize journal and post to general ledger
Documents: return request, bill of lading, debit memo Journals: Purchases, A/P
subsidiary ledger
Question 6.
Provision for depreciation and adjustments for deferrals and accruals (actions, documents,
journals)
Correct Answer: Actions: determine appropriate adjustments, record in general
journal and post to general ledger Documents: calculation/memo Journals: general
journal, subsidiary ledger (depreciation for fixed assets)
, Question 7.
Purchase transaction process
Correct Answer: 1. Requirement determination 2. Selection of supplier 3. Issue
purchase order 4. Receipt of goods 5. Record purchase
Question 8.
Purchase Transaction: Requirements Determination Task
Correct Answer: -The starting point for the acquisition process is the recognition of a
need for a type of good or service by one of the employees. -This need generates a
document called a purchase requisition- an internal document prepared by the
employee requesting the purchase; indicates the goods or services requested, the
quantity desired, and the date needed. -Depending on the cost and/or company
guidelines, it may require the signature of the employee's supervisor.
Question 9.
Purchase Transaction: Issue Purchase Order Task
Correct Answer: -Once a supplier has been selected, a purchase order is sent to the
supplier. -A purchase order is a request for goods or services from the supplier.
Suppliers sometimes acknowledge acceptance by signing and returning a copy or
may also do so by shipping the goods.
Question 10.
Purchase Transaction: Selection of Supplier Task
Correct Answer: Purchase requisitions are then sent to the purchasing department
where a supplier is selected. -For commonly purchased items (such as raw materials)
there may already be existing agreements with approved suppliers. -For items that are
not purchased regularly, the purchasing agent may need to identify a supplier and
submit requests for quotation.
Question 11.
Where does the purchase order go?
Correct Answer: One copy of the purchase order goes to the supplier, a second copy
goes to the receiving department to prepare for the receipt of goods and a third copy
goes to the accounting department.
Question 12.
What is on a purchase order?
Correct Answer: 1. The name and address of the vendor 2. The goods or service
desired 3. Price 4. Quantity 5. The desired delivery date 6. Shipping and payment
terms
with 100% Correct Answers | Latest Version
Question 1.
Control Objectives: Purchases/Cash Disbursement Cycle
Correct Answer: 1. All transactions are authorized 2. All transactions are recorded
and summarized at the correct amounts 3. All transactions are correctly classified as
defined by the chart of accounts 4. All transactions are included in the proper period
Question 2.
4 subcycles
Correct Answer: 1. Purchases 2. Cash disbursements 3. Purchases returns and
allowances 4.Period-end: provision for depreciation and adjustments for deferrals
and accruals
Question 3.
Purchases (actions, documents, journals)
Correct Answer: Actions: process purchase orders, receiving goods, record purchase
in journal and subsidiary ledger, summarize journal and post to general ledger
Documents: purchase requisition, purchase order, receiving report, vendor invoice
Journals: purchases, A/P subsidiary ledger, fixed asset subsidiary ledger
Question 4.
Cash disbursements (actions, documents, journals)
Correct Answer: Actions: disburse cash, record cash disbursements in journal and
subsidiary ledger, summarize journal and post to general ledger Documents: check,
disbursement voucher Journals: cash disbursements, A/P subsidiary ledger
Question 5.
Purchase return and allowance (actions, documents, journals)
Correct Answer: Actions: request purchase return or allowance, return goods, record
in journal and subsidiary ledger, summarize journal and post to general ledger
Documents: return request, bill of lading, debit memo Journals: Purchases, A/P
subsidiary ledger
Question 6.
Provision for depreciation and adjustments for deferrals and accruals (actions, documents,
journals)
Correct Answer: Actions: determine appropriate adjustments, record in general
journal and post to general ledger Documents: calculation/memo Journals: general
journal, subsidiary ledger (depreciation for fixed assets)
, Question 7.
Purchase transaction process
Correct Answer: 1. Requirement determination 2. Selection of supplier 3. Issue
purchase order 4. Receipt of goods 5. Record purchase
Question 8.
Purchase Transaction: Requirements Determination Task
Correct Answer: -The starting point for the acquisition process is the recognition of a
need for a type of good or service by one of the employees. -This need generates a
document called a purchase requisition- an internal document prepared by the
employee requesting the purchase; indicates the goods or services requested, the
quantity desired, and the date needed. -Depending on the cost and/or company
guidelines, it may require the signature of the employee's supervisor.
Question 9.
Purchase Transaction: Issue Purchase Order Task
Correct Answer: -Once a supplier has been selected, a purchase order is sent to the
supplier. -A purchase order is a request for goods or services from the supplier.
Suppliers sometimes acknowledge acceptance by signing and returning a copy or
may also do so by shipping the goods.
Question 10.
Purchase Transaction: Selection of Supplier Task
Correct Answer: Purchase requisitions are then sent to the purchasing department
where a supplier is selected. -For commonly purchased items (such as raw materials)
there may already be existing agreements with approved suppliers. -For items that are
not purchased regularly, the purchasing agent may need to identify a supplier and
submit requests for quotation.
Question 11.
Where does the purchase order go?
Correct Answer: One copy of the purchase order goes to the supplier, a second copy
goes to the receiving department to prepare for the receipt of goods and a third copy
goes to the accounting department.
Question 12.
What is on a purchase order?
Correct Answer: 1. The name and address of the vendor 2. The goods or service
desired 3. Price 4. Quantity 5. The desired delivery date 6. Shipping and payment
terms
