Homework 8th edition Chapter 11

Homework 8th edition Chapter 11 - Multiple Choice...

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Multiple Choice Questions: 11-41. d. 11-42. a. 11-43. d. 11-44. b. 11-45. c. 11-46. b. 11-47. b. 11-48. d. 11-49. b 11-50. c. 11-51 c 11-52 d 11-53 c 11-54 a 11-59 a. Deficiencies and inefficiencies are: Everyone is authorized to issue and file the purchase orders, but there is no ultimate responsibility. The shipper's invoice is automatically accepted by anyone in the receiving function and is forwarded to the controller for recording and subsequent payment by the treasury department. The VPS is filed without any comparison with goods received. All goods received are placed in storage by receiving department personnel without notification of warehouse personnel. b. The process could be improved in the following ways: The department head should specify responsibility for the filing of the purchase orders and those specified should be held accountable for the reliability of the files. The shipper's invoice should be sent directly to filing personnel who should match the shipper's invoice and the purchase order. If matched, the shipper's invoice should be forwarded to the controller. The VPS should be sent to filing personnel and filed with the associated purchase order. The goods should be counted by dock personnel who should prepare an independent, pre-numbered receiving report. The receiving reports should be accounted for and sent to the filing personnel where it should be compared with the VPS. If the receiving report and VPS are not the same, the
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department head should be notified. If they agree, they should be matched and filed. Separation between receiving, quality control inspection, and warehousing should be maintained. c. Incompatible functions (authorization, physical custody, and record keeping) need to be segregated to minimize error and the possibility of an employee stealing an asset and covering it up by also doing the authorization and record keeping. If someone could authorize the purchase of inventory, obtain physical custody of the inventory, and process payment therefore, they could have their company pay for items they use or sell personally. When these functions are automated, purchase orders are automatically generated by inventory control system based on certain parameters. Those parameters should only be set or changed by someone independent of the receiving and payment functions using appropriate access restrictions – password and ID. Receiving department personnel should access the purchase order information in the computer in a read- only mode. They should then scan the barcodes or physically enter the receiving information into the computer. The vendor’s invoice may be received electronically or entered into the system by accounts payable personnel from a paper invoice. The system can then match this information and schedule a payment date and automatically generate a check to pay the invoice. The treasury function should control the signature plate used to sign checks or authorize electronic payment. Access to the purchasing and vendors databases should be restricted.
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Homework 8th edition Chapter 11 - Multiple Choice...

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