ch18 mc - Exam Name MULTIPLE CHOICE Choose the one...

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the quest 1)It usually takes more time to audit the acquisition and payment cycle than any other cycle because 1) A) there is a greater likelihood of lawsuits against the auditor relating to these accounts. B) of the large number of accounts affected. C) internal controls in this area are usually weakest. D) there is a greater possibility of fraud in these transactions. 2)The major balance sheet account in the acquisition and payment cycle is 2) A) purchases. B) merchandise inventory. C) accounts payable. D) common stock. 3) A document identifying the description, supplier, quantity, and related information for goods and services the company intends to purchase is the 3) 4)The purchase order, usually in writing, is a legal document that is 4) 5) The point at which most companies first recognize the acquisition and related liability on their records is when the 5) 6) An important control in the accounts payable and information systems departments is to require that those personnel who record acquisitions do not have access to 6) A) vendors' price lists. B) cash, marketable securities, and other assets. C) the accounts payable master file. D) lists of vendors' names and addresses. 7) When processing and recording cash disbursements, it is important to have a method of cancelling the supporting documents to prevent their reuse as support for another cheque at a later time. A common method is to 7) A) write the cheque number on the supporting documents. B) transfer possession of the documents to a bank vault such as a safety deposit box. C) shred the documents so they can't be reused. D) move the documents to a permanent off - site facility such as a warehouse. 8) Since the audit of accounts payable generally takes a considerable amount of audit time, effective internal controls, properly tested, can significantly reduce audit costs by reducing 8) 1
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