The Multiple Choice Questions Blog

The following process describes aspects of the sales system in operation at Alex plc:

For the process, select whether it represents a big strength, a big deficiency, a minor impact or no impact on the system.

• The condition of the returned goods is checked, and a goods returned note is issued. A copy of this is sent to the accounts department, and the chief accountant raises a credit note.

Select ONE answer:

1. a big strength
2. a minor impact
3. no impact
4. a big deficiency

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

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The following process describes aspects of the sales system in operation at Alex plc:

For each process, select whether it represents a major strength, a significant deficiency, a minor impact, or no impact on the system.

• The receivables ledger clerk posts the sales invoices and cash received to the receivables’ ledger. The receivables ledger clerk also reconciles the receivables ledger to the control account monthly.

Select ONE answer:

1. a minor impact
2. no impact
3. a major strength
4. a significant deficiency

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – In this process there is insufficient segregation of duties. The same individual should not be responsible for processing invoices, posting cash and performing the control account reconciliation.

This work is licensed under a Creative Commons Attribution 4.0 International License.

The following process describes aspects of the sales system in operation at Alex plc:

For the process select whether it represents a big strength, a big deficiency, a minor impact or no impact on the system.

• Sales invoices are matched to despatch notes and sales orders. The calculations on the invoices are checked by the accounts clerk.

Select ONE answer:

1. a minor impact
2. no impact
3. a big strength
4. a big deficiency

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Alex Manufacturing Ltd has recently discovered that it has been paying invoices for goods that were returned as faulty before acceptance.

It is company policy to record goods only if they have been accepted.

Which ONE of the following controls would have prevented this from occurring?

Select ONE answer:

1. Matching of purchase invoices with orders
2. Matching of purchase invoices with goods received notes
3. Comparison of supplier statements with payables ledger accounts
4. Date stamping purchase invoices on receipt

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – As it is company policy to record goods only if accepted then a comparison of invoices with goods received records would identify if the goods had not been accepted – as there is no goods received record, the goods must have been faulty (or rejected for some other reason). This would then prevent the invoice from being processed.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The organisational structure at Alex Manufacturing Ltd is as follows.

The production department is headed by Arthur, whose deputy is Jonny.

Arthur reports to the managing director, Alex.

There are several other departments (sales and marketing, accounting, purchasing, HR and internal audit).

• Which ONE of the following statements reflects the ideal situation concerning purchase ordering?

Select ONE answer:

1. Arthur and Jonny should requisition materials as production needs dictate, but orders should be placed by the purchasing department
2. Arthur and Jonny should make purchase orders as production needs dictate
3. Arthur should make purchase orders, although Jonny could make requisitions as production needs dictate
4. Arthur and Jonny should requisition materials as production needs dictate. Still, orders should be placed by the purchasing department, having been authorised by Alex

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – Arthur and Jonny should requisition materials as production needs dictate, but orders should be placed (and by implication authorised) by the purchasing department. The managing director, Alex, would not be involved in authorising normal purchasing transactions in a company with a purchasing department. Someone other than the production department leaders should authorise purchases.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.