Purchases: Expenditures Processes and Controls 
1ACCOUNTING INFORMATION SYSTEMS
CONTROLS AND PROCESSES
TURNER / WEICKGENANNT
CHAPTER 9: Expenditures Processes and Controls – Purchases
TEST BANK - CHAPTER 9 - TRUE / FALSE
1. When the company is a vendor, goods flow into the company and cash is paid out.
2. Companies in the same line of business are not likely to have many differences in their purchasing habits.
3. The purchasing process starts when the purchase invoice is submitted by the vendor.
4. A purchase order is essentially an internal document, one that does not go outside the company, whereas a purchase requisition is an external document, which will be presented to an entity outside the company.
5. A purchase requisition is essentially an internal document, one that does not go outside the company, whereas a purchase order is an external document, which will be presented to an entity outside the company.
6. The use of a blind purchase order forces the receiving clerk to perform an independent check of the quantity and quality of the delivery.
7. A company is not obligated to pay for goods until 30 days after the goods are received.
8. Even though a company has an obligation to pay for goods as soon as the goods are received, it is common to not record the actual liability until the invoice is received.
9. It is necessary for the purchasing department to set up the proper procedures to avoid problems related to cutoff issues.
10. The accounts payable department keeps copies of purchase orders and receiving reports, that will be compared to the related invoice, to be sure that the invoices represent goods that were ordered and received.
11. The accounting department is responsible for implementing internal controls over each business process.
12. Independent reconciliation of the accounts payable subsidiary ledger to the general ledger control account will help to assure that all inventories has been properly recorded.
13. Independent
CONTROLS AND PROCESSES
TURNER / WEICKGENANNT
CHAPTER 9: Expenditures Processes and Controls – Purchases
TEST BANK - CHAPTER 9 - TRUE / FALSE
1. When the company is a vendor, goods flow into the company and cash is paid out.
2. Companies in the same line of business are not likely to have many differences in their purchasing habits.
3. The purchasing process starts when the purchase invoice is submitted by the vendor.
4. A purchase order is essentially an internal document, one that does not go outside the company, whereas a purchase requisition is an external document, which will be presented to an entity outside the company.
5. A purchase requisition is essentially an internal document, one that does not go outside the company, whereas a purchase order is an external document, which will be presented to an entity outside the company.
6. The use of a blind purchase order forces the receiving clerk to perform an independent check of the quantity and quality of the delivery.
7. A company is not obligated to pay for goods until 30 days after the goods are received.
8. Even though a company has an obligation to pay for goods as soon as the goods are received, it is common to not record the actual liability until the invoice is received.
9. It is necessary for the purchasing department to set up the proper procedures to avoid problems related to cutoff issues.
10. The accounts payable department keeps copies of purchase orders and receiving reports, that will be compared to the related invoice, to be sure that the invoices represent goods that were ordered and received.
11. The accounting department is responsible for implementing internal controls over each business process.
12. Independent reconciliation of the accounts payable subsidiary ledger to the general ledger control account will help to assure that all inventories has been properly recorded.
13. Independent