True or False Finals

Purchase Order File contains records of purchases placed with buyers.

• True

• False

The auditor can use ACL’s Stratify and Classify features to identify various charac teristics and anomalies associated with accounts payable procedures

• True

• False

The search for unrecorded liabilities involves the Disbursement Voucher and Receiving Report files.

• True

• False

Upon receipt of the purchase order, the purchasing department prepares a five-part purchase order. Copies go to the vendors, accounts payable, receiving, data processing, and the purchasing department’s own file.

• True

• False

The cost accounting department enters job cost data (real-time or daily) to create the labor usage file.

• True

• False

The sales process begins in the billing department with the receipt of a customer order indicating the type and quantity of merchandise being requested.

• True

• False

The next step in the revenue cycle is transaction authorization, which involves verifying the customer’s creditworthiness.

• True

• False

Each sales transaction record processed is added to the sales journal file. At the end of the run, these are summarized and an entry is made to the journal voucher file to reflect total purchases and total increases to accounts receivable.

• True

• False

In open invoice systems, each invoice is billed and paid individually.

• True

• False

Batch controls are used to manage high volumes of transaction data through a system.

• True

• False