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Chapter 5-Review Questions Accounting Information System

This document contains review questions and answers from Chapter 5 of the textbook "Accounting Information System 7th Edition" by James A. Hall. The questions cover the roles and processes of purchasing, cash disbursements, receiving, and general ledger departments. Key points include that purchasing departments research vendors and prices to procure quality goods on time. Cash disbursements identifies liabilities, prepares payments, and updates accounts payable records. Receiving clerks inspect inventory quantities and conditions with supervision to prevent errors or theft. General ledger verifies totals from other departments. Computerized purchasing can automate routine orders to reduce processing times. Vouchers payable improves cash controls and allows consolidating multiple payments to suppliers.

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Beny Moldogo
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326 views2 pages

Chapter 5-Review Questions Accounting Information System

This document contains review questions and answers from Chapter 5 of the textbook "Accounting Information System 7th Edition" by James A. Hall. The questions cover the roles and processes of purchasing, cash disbursements, receiving, and general ledger departments. Key points include that purchasing departments research vendors and prices to procure quality goods on time. Cash disbursements identifies liabilities, prepares payments, and updates accounts payable records. Receiving clerks inspect inventory quantities and conditions with supervision to prevent errors or theft. General ledger verifies totals from other departments. Computerized purchasing can automate routine orders to reduce processing times. Vouchers payable improves cash controls and allows consolidating multiple payments to suppliers.

Uploaded by

Beny Moldogo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Review Questions- CHAPTER 5

Accounting Information System 7th Edition


James A. Hall
Page 244

Rotsen M. Moldogo

2. What does a purchasing department serve?


A purchasing department researches the quality and pricing of various vendors. Their job
is to monitor various supply sources and choose the highest quality good for a given price which
can be reliably delivered on time. Purchasing department receives the purchase requisitions, sorts
them by vendor, and prepares a multipart PO for each vendor. Copies are sent to:
• Vendor
• AP
• receiving
• data processing
• purchasing department’s file

4. What are the three logical steps of the cash disbursements system?
The three logical steps of the cash disbursements system are:
1) Identify liabilities due
2) Prepare cash disbursement
3) Update AP record

6. What two types of exposure can close supervision of the receiving department reduce?
The receiving clerk's responsibility is to inspect the quantities and condition of the
goods received. The two exposures are 1) failing to perform his/her duty and 2) pilfering
or stealing the inventory. Thus, the copy of the purchase order which they use for this
inspection should not contain quantities or amounts. If the quantity is printed on the receiving
clerk's copy of the purchase order, he or she may be tempted to skip the physical inspection and
the company may be paying for inventory it did not receive or is damaged. A supervisor is
necessary to remove the packing slip which contains quantity information and to make sure the
receiving clerks actually inspect the goods. If the value of the inventory is listed, the
employee may be tempted to steal some of the inventory. Close supervision should deter
employees from stealing.
8. What steps of independent verification does the General Ledger department perform?
The general ledger department receives journal vouchers from inventory control,
accounts payable, and cash disbursements. With these summary figures, the general ledger clerk
verifies that
1) total obligations recorded = total inventories received, and
2) total reductions in accounts payable = total disbursements of cash.

10. How do computerized purchasing systems help to reduce the risk of purchasing bottlenecks?
Routine purchases can be automated, thus reducing the time lag between the purchase
requisition and the placement of the order, which also reduces the amount of time to receive
the inventory. Thus, routine orders which may be automated should cause the ordering processing
time to be reduced.

12. Give one advantage of using a vouchers payable system.


One advantage of vouchers payable system is that it provide improved control over cash
disbursements and allow firms to consolidate several payments to the same supplier on a single
voucher, thus reducing the number of checks written.

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