COLLEGE ACCOUNTING (LL)W/ACCESS>CUSTOM<
4th Edition
ISBN: 9781260255157
Author: Haddock
Publisher: MCG CUSTOM
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Question
Chapter 8, Problem 2.5SRE
To determine
Identify the statement which is not the evidence for the effective internal controls for purchases.
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Students have asked these similar questions
Each of the below describes a procedure consistent with a strong system of internal control except…
Question 7 options:
The customer order department determines when a sale has occurred and should be recorded.
The accounts payable department agrees purchase requisitions, purchase orders, receiving reports, and invoices prior to payment.
Quantities ordered are excluded from the receiving department copy of a purchase order so receiving personnel count and inspect merchandise received.
The use of remittance advices for customers' payments on accounts receivable received in the mail.
Choose the one correct answer.
Which of the following Test of Controls is done to examine whether purchase orders, receiving reports and vouchers are prenumbered and accounted for? *Select samples from creditors list and send creditors’ confirmation.
Examine evidence of approval of unusual trade terms and discounts.
Trace samples of goods received notes to the related suppliers’ invoices and entries in the purchase journal and in creditors’ ledger.
Review bank statements for any unrecorded cheques payments.
Which of the following will be the most appropriate test to determine wherether purchase orders are being processed on a timely basis?
a. Determine the dates of unpaid accounts payable invoices.
b.Compare dates of selected purchase orders with those of purchase requisitions
c.select a block of used purchase order numbers and account for all number in the block
d. discuss proccessing procedures with operating personnel and observe actual processing of purchases.
Chapter 8 Solutions
COLLEGE ACCOUNTING (LL)W/ACCESS>CUSTOM<
Ch. 8 - What is the name of the account used to record...Ch. 8 - What does FOB shipping point mean?Ch. 8 - Prob. 1.3SRQCh. 8 - Prob. 1.4SRECh. 8 - Prob. 1.5SRECh. 8 - Prob. 1.6SRACh. 8 - Prob. 2.1SRQCh. 8 - Prob. 2.2SRQCh. 8 - The total of the schedule of accounts payable...Ch. 8 - In the accounts payable ledger, a suppliers...
Ch. 8 - Prob. 2.5SRECh. 8 - Prob. 2.6SRACh. 8 - What is the name of the account used to record...Ch. 8 - What type of account is Purchases Returns and...Ch. 8 - Prob. 3CSRCh. 8 - Prob. 4CSRCh. 8 - Prob. 5CSRCh. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - Prob. 4DQCh. 8 - Prob. 5DQCh. 8 - Prob. 6DQCh. 8 - What type of accounts are kept in the accounts...Ch. 8 - Prob. 8DQCh. 8 - Prob. 9DQCh. 8 - Prob. 10DQCh. 8 - Prob. 11DQCh. 8 - Prob. 12DQCh. 8 - Prob. 13DQCh. 8 - Why is using the Purchases Returns and Allowances...Ch. 8 - Prob. 15DQCh. 8 - Prob. 16DQCh. 8 - Prob. 17DQCh. 8 - Prob. 18DQCh. 8 - Identify the normal balance of the following...Ch. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Record the following transactions of J. Min...Ch. 8 - Record the following transactions of Allen Inc.:Ch. 8 - Bushard Company (buyer) and Schmidt, Inc. (seller)...Ch. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - Record the following transactions of Fashion Park...Ch. 8 - On April 1, Moloney Meat Distributors sold...Ch. 8 - Bushard Company (buyer) and Schmidt, Inc. (seller)...Ch. 8 - Annettes Photo Shop is a retail store that sells...Ch. 8 - Prob. 2PACh. 8 - Prob. 3PACh. 8 - NewTech Medical Devices is a medical devices...Ch. 8 - Prob. 5PACh. 8 - Bowden Company (buyer) and Song, Inc. (seller),...Ch. 8 - The following transactions took place at Fine...Ch. 8 - Prob. 1PBCh. 8 - Taras Card and Novelty Shop is a retail card,...Ch. 8 - Prob. 3PBCh. 8 - Prob. 4PBCh. 8 - Prob. 5PBCh. 8 - Belladonna Company (buyer) and Sachi, Inc....Ch. 8 - The following transactions took place at The...Ch. 8 - William Evans began Evans Distributors, a sporting...Ch. 8 - Prob. 2CTPCh. 8 - Prob. 1MFCh. 8 - Prob. 2MFCh. 8 - Prob. 3MFCh. 8 - Prob. 4MFCh. 8 - Prob. 5MFCh. 8 - Prob. 6MFCh. 8 - Prob. 1ED
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Similar questions
- There are several elements to internal controls. Which of the following would not address the issue of having cash transactions reported in the accounting records? A. One employee would have access to the cash register. B. The cash drawer should be closed out, and cash and the sales register should be reconciled on a prenumbered form. C. Ask customers to report to a manager if they do not receive a sales receipt or invoice. D. The person behind the cash register should also be responsible for making price adjustments.arrow_forwardWhich, if any,of the followingsituations represent improper segregationof functions? Explain your answer. a. The billing deparment prepares the customers' invoices and records the sale in the sales journal. b. Mail room clerk opens cash receipts envelopes from customers and also prepares the remittance list. c. Accounting clerk receives journal vouchers from various departments and also posts to the GL accounts. d. The sales department approves sales credit memos as the result of product returns and forwards these to the AR department, which adjusts the customer accounts to reflect the return.arrow_forward1. A threat to the expenditure cycle that involves an employee creating and approving fictitious purchase orders is known as: A. Inventory theft B. Unauthorized access C. Check tampering D. Billing schemes 2. Purchase orders are used to initiate a payment in the disbursement cycle. True or False 3.Vendor audits are conducted to address the threat of unauthorized access in the disbursement cycle. True or falsearrow_forward
- Payable ICQ Items: Assertions, Tests of Controls, and Possible Errors or Frauds. Following is a selection of items from internal control questionnaires.1. Are purchase orders above a certain level approved by an officer?2. Are the quantity and quality of goods received determined at the time of receipt by receiving personnel independent of the purchasing department?3. Are vendors’ invoices matched against purchase orders and receiving reports before a liability is recorded?4. Are journal entries authorized at appropriate levels?Required:For each preceding item:a. Identify the management assertion to which it applies.b. Specify one test of controls auditors could use to determine whether the control was operating effectively.c. Give an example of an error or fraud that could occur if the control were absent or ineffective.d. Write a substantive procedure that could find errors or frauds that could result from the absence or ineffectiveness of the control items.arrow_forwardWhich of these arrangements of duties could most likely lead to an embezzlement or theft?a. The inventory warehouse manager has responsibility for making the physical inventory observation and reconciling discrepancies to the perpetual inventory records.b. The cashier prepared the bank deposit, endorsed the checks with a company stamp, and delivered the cash and checks to the bank for deposit (no other bookkeeping duties).c. The accounts receivable clerk received a list of payments received by the cashier so he could make entries in the customers’ accounts receivable subsidiary accounts.d. The financial vice president received checks made out to suppliers and the supporting invoices, signed the checks, and mailed the checks.arrow_forwardThe following set of items describes activities completed by a company in purchasing and paying for merchandise. For each activity, identify whether or not the activity adheres to or violates sound internal control procedures.All documents attached to an invoice approval form are canceled before a check is signed.a. Adheres to sound internal control proceduresb. Violates sound internal control proceduresc. Neither strengthens nor violates internal controlarrow_forward
- Which of the following is NOT an independent verification control?a. The shipping department verifies that the goods sent from the warehouse are correct in type and quantity.b. General ledger clerks reconcile journal vouchers that were independently prepared in various departments.c. The use of prenumbered sales orders.d. The billing department reconciles the shipping notice with the sales invoice to ensure that customers are billed for only the quantities shipped.arrow_forwardWhich of the following is an internal control activity that could prevent a paid disbursement voucher from being presented for payment a second time?a. Vouchers should be prepared by individuals who are responsible for signing disbursement checks.b. Disbursement vouchers should be approved by at least two responsible management officials.c. The date on a disbursement voucher should be within a few days of the date the voucher is presented for payment.d. The official who signs the check should compare the check with the voucher and should stamp “PAID” on the voucher documents.arrow_forwardWhich of the following is the best reason for prenumbering in numerical sequence documents such as sales orders, shipping documents, and sales invoices?a. Enables company personnel to determine the accuracy of each document.b. Enables personnel to determine the proper period recording of sales revenue and receivables.c. Enables personnel to check the numerical sequence for missing documents and unrecorded transactions.d. Enables personnel to determine the validity of recorded transactions.arrow_forward
- A fraudulent sales order was prepared by an order entry clerk in an attempt to steal merchandise from an organization. This fraud would most likely be detected by: Question 6 options: Using pre-numbered sales orders. Verifying that the sales order has been prepared correctly. Requiring that all sales orders by supported by an approved customer purchase order. Proper segregation of duties.arrow_forward1. A threat in the expenditure cycle that involves unauthorized individuals making purchases is known as: A. Unauthorized access B. Fraudulent disbursements C. Data breaches D. Inventory theft 2. What is the first step in the expenditure cycle? A. Placing the purchase order B. Recording the transaction C. Authorizing the purchase D. Receiving goods or services 3. Which of the following is not a step in the expenditure cycle? A. Approving the purchase requisition B. Collecting cash from customers C. Receiving goods or services D. Recording the transaction in the general ledgerarrow_forwardAll of the following are true concerning an invoice except: When a shipment arrives, the receiving department counts the items received against the purchase order. The vendor ships items ordered after it receives a purchase requisition. The invoice is sent to the buyer's accounting department where it is placed in the voucher. Ⓒ When all coples are in the voucher, the accounting department can record the purchase and approve its payment.arrow_forward
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