Chapter 11: Expenditure Cycle
6 Written Questions
6 Multiple Choice Questions
- the level to which the inventory balance of an item must fall befor an order to replenish stock is initiated.
- a document used to record a reduction to the balance due to a vendor
- a recurring set of business activities and related data processing operations associated with the purchase of and payment for goods and services
- a corporate credit card that employees can use to purchase specific kinds of items
- the set of documents used to authorize payment to a vendor. it consists of a purchase order, receiving report, and vendor invoice.
- a document that identifies the vendor, lists the outstanding invoices, and indicates the net amount to be paid after deducting any applicable discounts and allowances
5 True/False Questions
nonvoucher system → a method for processing accounts payable in which each approved invoice is posted to individual vendor records in the accounts payable file and iis then stored in an open invoice file. when a check is written to pay for an invoice, the invoice is removed from the open invoice file, marked paid, and stored in the paid invoice file.
economic order quantity EOQ → the optimal order size so as to minimize the sum of ordering, carrying, and stockout costs. Ordering costs include all expenses associated with processing purchase transactions. Carrying costs are the costs associated with holding inventory. stockout costs represent costs, such as lost sales or production delays, which result from inventory shortages.
kickbacks → gifts given by vendors to purchaseing agents for the purpose of influencing their choice of suppliers
purchase requisition → a documentor electronic form that identifies the requisitioner; specifies the delivery location and date needed; identifies the item numbers, descriptions, quantity, and price of each item requested; and may suggest vendors
imprest fund → a document used to record a reduction to the balance due to a vendor