Question :
121. The document that the purchasing department prepares and sends to : 1225914
121. The document that the purchasing department prepares and sends to the vendor to place an order is the
A. Purchase requisition.
B. Purchase order.
C. Invoice.
D. Receiving report.
E. Invoice approval.
122. The document that is an itemized statement of goods prepared by a vendor listing the customer’s name, items sold, sales prices, and terms of the sale is the
A. Purchase requisition.
B. Purchase order.
C. Invoice.
D. Receiving report.
E. Invoice approval.
123. The internal document that is prepared to notify the appropriate persons that ordered goods have been received and describes the quantities and condition of the goods is the
A. Purchase requisition.
B. Purchase order.
C. Invoice.
D. Receiving report.
E. Invoice approval.
124. The document, also known as the check authorization, that is a checklist of steps necessary for approving an invoice for recording and payment is the
A. Purchase requisition.
B. Purchase order.
C. Invoice.
D. Receiving report.
E. Invoice approval.
125. A voucher system is a series of prescribed control procedures:
A. Designed to eliminate the need for subsidiary ledgers.
B. Designed to determine if the company is operating profitably.
C. Used almost exclusively by small companies.
D. Used to ensure that the company sells on credit only to creditworthy customers.
E. Designed to control cash disbursements and the acceptance of obligations.
126. The gross method of recording purchases refers to the method of recording:
A. Purchases at the invoice price less any cash discounts.
B. Specified amounts and timing of payments that a buyer agrees to make in return for being granted credit.
C. Purchases at the full invoice price, without deducting any cash discounts.
D. Inventory at its selling price.
E. Inventory at the lower of cost or market.
127. An expense resulting from failing to take advantage of cash discounts on purchases is called:
A. Sales discounts.
B. Trade discounts.
C. Purchases discounts.
D. Discounts lost.
E. Discounts earned.
128. A company using the net method of recording purchases failed to take advantage of a discount available. When they pay the full (gross) amount of an invoice at the end of the credit period the journal entry will include a debit to:
A. Merchandise Inventory.
B. Sales Discounts.
C. Discounts Lost.
D. Cash.
E. Accounts Receivable.
129. A company that uses the net method of recording invoices made a purchase of $400 with terms of 2/10, n/30. The entry to record the purchase would include:
A. A debit to Merchandise Inventory for $392.
B. A credit to Discounts Lost for $8.
C. A credit to Cash for $392.
D. A debit to Discounts Lost for $8.
E. A debit to Cash for $392.
130. Merchandise with an invoice price of $2,000 was purchased on October 3, terms 1/15, n/60. The company uses the net method to record purchases. The entry to record the cash payment of this purchase obligation on October 17 is:
A. Debit Accounts Payable $1,980; credit Cash $1,980.
B. Debit Accounts Payable $2,000; credit Cash $2,000.
C. Debit Accounts Payable $1,980; credit Discounts Lost $20; credit Cash $2,000.
D. Debit Accounts Payable $2,000; credit Merchandise Inventory $20; credit Cash $1,980.
E. Debit Accounts Payable $2,000; credit Merchandise Inventory $40; credit Cash $1,960.
131. A company records purchases using the net method. On February 1, they purchased merchandise inventory on account for $8,300 with terms of 1/10, n/30. The February 1 journal entry to record this transaction would include a:
A. Debit to Merchandise Inventory of $8,300.
B. Debit to Merchandise Inventory of $8,217.
C. Debit to Merchandise Inventory of $83.
D. Credit to Merchandise Inventory of $83.
E. Credit to Accounts Payable of $8,300.
132. Reasons that internal controls are crucial to companies that convert from U.S. GAAP to IFRS include all of the following except:
A. Possible misstatement of financial information.
B. Possible fraud.
C. Controls are significantly different across the globe.
D. Ineffective communication of the change to investors, creditors, and others.
E. Management’s inability to certify the effectiveness of the controls.
133. Effective cash management involves applying all of the following cash management principles except:
A. Encourage collection of receivables, offer discounts for payments received early.
B. Keep only necessary levels of assets.
C. Plan expenditures.
D. Leave excess cash available for unexpected expenditures.
E. Delay payment of liabilities until the last possible day.
