C5 SIA

Purchasing decisions are authorized by inventory control.

• True

• False

The blind copy of the purchase order that goes to the receiving department contains no item descriptions.

• False

• True

Firms that wish to improve control over cash disbursements use a voucher-sales system.

• False
• True

In a voucher system, the sum of all unpaid vouchers in the voucher register equals the firm’s total voucher payable balance.

• True

• False

The accounts payable department reconciles the accounts payable subsidiary ledger to the control account.

• True

• False

The use of inventory reorder points suggests the need to obtain specific authorization.

• True

• False

Proper segregation of duties requires that the responsibility approving a payment be separated from posting to the cash disbursements journal.

• True

• False

A major risk exposure in the expenditure cycle is that accounts payable may be overstated at the end of the accounting year.

• True

• False

When a trading partner agreement is in place, the traditional three-way match should be eliminated.

• True

• False

Authorization of purchases in a merchandising firm occurs in the voucher control department.

• True

• False