Processing efficiency can be improved by: requiring suppliers to submit invoices by EDI; having the system automatically match invoices to POs and receiving reports; eliminating vendor invoices; using procurement cards for non-inventory purchases; using company credit cards and electronic forms for travel expenses; …
What are the activities in expenditure cycle?
The expenditure cycle is the set of activities related to the acquisition of and payment for goods and services. These activities include
the determination of what needs to be purchased, purchasing activities, the receipt of goods, and payments to suppliers
.
What is the example of expenditure cycle?
Your expenditure cycle would be
creating purchase orders from various employee requests for more paper, pencils and print cartridges, and calling the office supply store to place the order using the purchase order
.
What is expenditure cycle controls?
Some controls usually found in the expenditure cycle:
Purchases based on approved requisition
. Purchasing agents review requisitions for proper approval and budgets. Purchases made from approved vendors. Compare goods received to purchase order.
Which of the following control methods is most likely to be used for a product for which sales can be reliably forecast?
Which of the following
inventory control methods
is most likely to be used for a product for which sales can be reliably forecast? MRP forecasts sales and uses that information to purchase inventory to meet anticipated needs.
What is the first step in the expenditure cycle?
The first step in the expenditure cycle is to
order materials, supplies and services for the company
. Different individuals or departments in the company track their consumables and create a purchase requisition when they're low on goods.
What is the relation between expenditure cycle and financing cycle?
The expenditure cycle gets funds from the financing cycle
; provides raw materials to the production cycle; and provides data to the general ledger and reporting system.
What are the repetitive process of expenditure cycle controls?
An expenditure cycle is a set of purchasing decisions and actions. It's the repetitive process of
creating purchase orders and ordering goods and services, receiving these items, approving the invoices for these items and services, and paying the invoices
.
What is conversion cycle in AIS?
The conversion cycle is
one of the four transactions cycle used by accounting systems that records one economic event – the consumption of labor, material and overhead to produce a product or service
.
Why is there a need to segregate key functions in the expenditure cycle?
Segregation of duties serves two key purposes:
It ensures that there is oversight and review to catch errors
. It helps to prevent fraud or theft because it requires two people to collude in order to hide a transaction.
What types of decision making and strategic information should an AIS provide in the expenditure cycle?
The AIS should provide decision making and strategic information to:
Determine when and how much additional inventory to order
. Select the appropriate vendors from whom to order. Verify the accuracy of vendor invoices. Decide whether purchase discounts should be taken.
Which of the following controls could be used to mitigate the threat of unauthorized disclosure of sensitive information in the expenditure cycle?
Encryption
. You just studied 10 terms!
Which document is used to establish a contract for the purchase of goods or services?
The
purchase requisition
authorizes a purchase to be made by the purchasing department. A debit memo is the document that should be prepared in case damaged goods need to be returned to a supplier.
Which control would be best to prevent payments made to fictitious vendors?
Which control would best prevent payments made to fictitious vendors?
Allow payments only to approved vendors
.
Why is the expense cycle more complex than the revenue cycle?
An expense cycle is a set of purchasing decisions. The process repeats itself by creating purchased products and receiving the goods and services that are approved and paid through invoices. Expense cycle is more complex than the revenue cycle since
it operates on a wide range of business sphere
.
Who creates purchase requisition?
| Feature Purchase Requisition | What is it? Request for a purchase | Who creates it? Any employee | When is it sent? When an employee sees a demand for goods or services | Who receives it? Head of department and/or purchasing department |
|---|
Which cycle request goods and services purchase?
The purchasing cycle
—also called the procurement cycle or procure-to-pay (P2P)—is the process by which you order, obtain, and pay for the goods and services your business needs.
