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Accounting Information System - Chapter 5 PDF

This document contains discussion questions and answers about purchasing processes. It explains that a purchasing department is responsible for researching vendors and choosing high quality goods at good prices [1]. Purchase requisitions are created when inventory drops to predetermined reorder points to initiate purchases [2]. Supervision in receiving is important to prevent theft, as clerks have access to assets. Blind fields on receiving reports ensure goods are properly counted and inspected by removing quantity information visible to clerks [3].

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197 views2 pages

Accounting Information System - Chapter 5 PDF

This document contains discussion questions and answers about purchasing processes. It explains that a purchasing department is responsible for researching vendors and choosing high quality goods at good prices [1]. Purchase requisitions are created when inventory drops to predetermined reorder points to initiate purchases [2]. Supervision in receiving is important to prevent theft, as clerks have access to assets. Blind fields on receiving reports ensure goods are properly counted and inspected by removing quantity information visible to clerks [3].

Uploaded by

Third Montefalco
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Chapter 5

Discussion Questions

1. What purpose does a purchasing department serve?

2. In the Basic technology system, the inventory control clerk reviews the purchase requisition file
to identify inventory needs. Explain how this file is created.

3. Discuss the importance of supervision controls in the receiving department and the reasons
behind blind fields on the receiving report.

Answers:

1. A purchasing department can research the quality and pricing of various vendors. Its job is
to monitor various supply sources and choose the highest quality good for a given price,
with reliable delivery. The purchasing department may also take advantage of quantity
discounts, especially when two or more manufacturing facilities are involved. The
Purchasing department receives the purchase requisition, sorts them by vendor, and adds a
record to the digital open purchase order file. One copy of the PO is sent to the vendor.
Another is sent to inventory control.

2. Purchase requisitions are created during the sales activity when the inventories dropped to
their predetermined reorder point. When you sell your inventory, it means that you have to
buy more in order to make your product. When that happens, a purchase requisition is
prepared and sent to the prepare purchase order function to initiate the purchase process.

3. Supervision control in the receiving department is important to deter opportunities for theft
and fraud. Since the receiving clerks have access to many of the firm's assets: their
inventory, it is critical that there is proper supervision. Two exposures potentially exist: 1.
the clerk fails to perform his/her duty and 2. the clerk pilfers or steals the inventory. And
the reasons behind the blind fields on the receiving report is to make sure that the goods
received are properly counted and checked for quality, as well as to ensure that the correct
items that were ordered are received. The copy of the purchase order is used for the
inspection and it should not have the quantities and amounts listed. It should be covered so
that it may not be read. If the quantity is printed on the receiving clerk's copy of the
purchase order, he/she may be tempted to skip the physical inspection and the company
may be paying for inventory it did not receive or that 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 and the blind fields on the receiving report help to ensure that the
receiving department clerks are fulfilling their tasks by manually counting and inspecting
the goods received.

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