Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN: 9781337619455
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: Cengage Learning
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Question
Chapter 11, Problem 3CYBK
To determine
Introduction: The acquisition and payment cycle are also referred as the purchase, payables, and payment cycle which includes all the activities from incurring the payables to the payment of the payables. It is related with the purchases and their payments in cash.
To choose: The correct option among the given options.
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What document signals that a company should record thepurchase of goods on account?a. Purchase requisitionb. Purchase orderc. Receiving reportd. Supplier invoice
A company indicates the condition of goods obtained onwhich of the following documents?a. Purchase requisitionb. Purchase orderc. Receiving reportd. Supplier invoice
Which of the following functions is not included in the typical expenditure cycle involving goods?
A. Disbursing payments to the vendors
B. Placing an order for goods or services
C. Posting to the accounts payable subsidiary ledger
D. Processing a credit memo
E. Ascertaining the validity of payment obligations
Chapter 11 Solutions
Auditing: A Risk Based-Approach (MindTap Course List)
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- Under the realization principle, revenue from sale of products is recognized a. At date of delivery to the customers C. When the customers are billed b. When the inventories are readied for shipment D. Upon receipt of cash paymentarrow_forward1. Sales revenue should be recognized when: a. sales are invoiced. b. payment is received from the customer. c. the customer's order is received. d. goods are shipped.arrow_forwardAccounting information systems have five generic elements . Which of the following pairs includes examples of two different elements within the context of the acquisition /payment process ? Select one : a. All of these b. Journal entry that debits inventory and credits cash O c. Separation of duties and a blind copy of the receiving report O d. Purchase requisition and schedule of accounts payablearrow_forward
- 1. Why should the function of requisitioning the purchase of goods be segregated from the function of issuing purchase orders? 2. Explain how an automated matching process works regarding the payment of accounts payable 3. What control objective is addressed by having prenumbered receiving documentsarrow_forwardWhich of the following is NOT a financial transaction? a. purchase of products b. cash receipts c. update valid vendor file d. sale of inventoryarrow_forwardA form used to request the responsible person or department to purchase merchandise or other property is known as a a.purchase invoice. b.purchase order. c.purchase requisition. d.receiving report.arrow_forward
- What is the account title used for revenue when goods are delivered to customers?arrow_forwardA credit balance to a client’s accounts payable account representing right to receive payment for delivery of goods should be properly classified as:arrow_forwardWhich of the following steps in the expenditure cycle would not appear as event entities in an REA diagram? Select one: a. Ordering b. Approve Supplier Invoices c. Cash Disbursements d. Receivingarrow_forward
- A. What document is used to create the Purchase Order in the Expenditure Cycle and wheredoes it come from?B. Who creates the Purchase Order?C. Who gets copies of the Purchase Order?In the space below, please answer parts A, B, and C.arrow_forwardIt is used to who is responsible for paying shipping and when the title of the goods passes from seller to buyer: This term will be applicable to a. Discount term b. Credit terms c. Cash term d. Shipping termsarrow_forwardWhich of the following accounts does not belong in the purchases and disbursement cycle? Group of answer choices a.Prepayments b.Accounts payable c.Sales returns and allowances d.Fixed assetsarrow_forward
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