Skip to Main Content
Purchasing, Inventory, and Cash Disbursements
book

Purchasing, Inventory, and Cash Disbursements

by Glenn Helms
April 2018
Intermediate to advanced content levelIntermediate to advanced
144 pages
3h 36m
English
Wiley
Content preview from Purchasing, Inventory, and Cash Disbursements

SOLUTIONS

CHAPTER 1

Solutions to Practice Questions

1.      

Recorded acquisitions are for goods received (occurrence) Acquisitions are recorded (completeness) Acquisitions are recorded accurately (accuracy) Acquisitions are classified correctly (classification)
Control Activities
Vendors are rotated among purchasing agents X
Purchase orders are required for all procurements X X X
Receiving reports are required for all receipts X X X
The numerical sequence of receiving reports are accounted for by accounts payable X
There is a separate warehouse that counts goods obtained from the receiving department X X X
A physical inventory is taken periodically X X X X

2.     Duties should be separated as follows:

     Bookkeeping — Should be performed by accounts payable.

     Access to assets — Should be restricted to authorized personnel (warehouse personnel) and enforced by the use of keys and identification cards that are inspected by security personnel, or by some other means.

     Authorization of transaction — Using the example from this chapter, all departmental supplies requests had to be approved by the departmental manager. In addition, the purchasing department is the only department that should issue purchase orders.

     Independent reconciliation — A physical inventory should be performed with adequate frequency. The physical inventory should be observed by personnel independent of the warehouse department and test counts should ...

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Start your free trial

You might also like

How to Keep Score in Business: Accounting and Financial Analysis for the Non-Accountant, Second Edition

How to Keep Score in Business: Accounting and Financial Analysis for the Non-Accountant, Second Edition

Robert Follett

Publisher Resources

ISBN: 9781119512264Purchase book