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Multiple Choice Quiz
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1
A "voucher" is a
A)Document received from the vendor to request payment
B)An authorization to prepare a purchase order.
C)A check that has been prepared and forwarded for signing.
D)None of the above.
2
A "blind purchase order" is a
A)Purchase order with the quantity deleted to be used in the receiving department.
B)An automatic purchase performed using electronic data interchange.
C)A blanket purchase order for goods to be received throughout the year.
D)None of the above.
3
Which of the following accounts is not included in the acquisition and expenditure cycle?
A)Cash.
B)Inventory.
C)Sales returns and allowances.
D)Freight-in.
4
Canceling invoices with a "PAID" stamp after payment is a control that relates to which assertion?
A)Existence or occurrence.
B)Completeness.
C)Rights and obligations.
D)Valuation or allocations.
5
Which of the following is not a step in the search for unrecorded liabilities?
A)Examine the open purchase order file.
B)Examine disbursements for the period immediately before the end of the period.
C)Examine the unmatched receiving reports.
D)All of the above are steps in the search.
6
Which of the following fraud signs could be detected by a CAAT?
A)Look for vendor's invoices submitted in numerical order.
B)Look for invoices always slightly lower than a review threshold.
C)Look for vendors with only post office box addresses.
D)All of the above.
7
Which of the following control questions relates to the existence and occurrence objective in purchasing and accounts payable?
A)Are the purchase order forms prenumbered and the numerical sequence checked for missing documents?
B)Does the accounting department check invoices for mathematical accuracy?
C)Does the chart of accounts and accounting manual give instructions for classifying debit entries?
D)Are receiving reports prepared for each item received?
8
Auditors usually focus on which assertion when auditing current liabilities?
A)Occurrence.
B)Completeness.
C)Accuracy.
D)Classification.
9
If goods ordered under a binding purchase commitment permanently decline in value below the agreed on purchase prices, a company should.
A)Disclose the terms of the commitment in the financial statements.
B)Record a loss for items received.
C)Record a loss for items not yet received.
D)None of the above.
10
The purchasing department.
A)Should obtain competitive bids from vendors.
B)Should inspect incoming goods and forward them to the receiving department.
C)Should inspect vendor invoices and forward them to the accounting department.
D)All of the above.





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