Month: January 2026

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.

Alex Maintenance Ltd is a large property management company that uses many contractors for building, design, and decorating.

Which ONE of the following internal controls are most likely to prevent services from being used for the private purposes of employees?

Select ONE answer:

1. Purchase orders should only be placed with authorised contractors
2. Purchase invoices are matched to authorised purchase orders
3. Purchase orders are processed by the buying department following authorisation by ANY project employee
4. Purchase requisitions must be signed by TWO team members for any given project

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 – 1 is not correct as inappropriate orders could still be made with authorised suppliers. 2 is not correct as once inappropriate orders have been authorised, matching the order with the invoice will not prevent that act having taken place.

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

Alex Maintenance Ltd is a large property management company that uses many contractors for building, design, and decorating.

Which ONE of the following internal controls are most likely to prevent services from being used for the private purposes of employees?

Select ONE answer:

1. Purchase orders should only be placed with authorised contractors
2. Purchase invoices are matched to authorised purchase orders
3. Purchase orders are processed by the buying department following authorisation by the operations director
4. Purchase requisitions must be signed by ONE team member for any given project

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 – 1 is not correct as inappropriate orders could still be made with authorised suppliers. 2 is not correct as once inappropriate orders have been authorised, matching the order with the invoice will not prevent that act having taken place.
4. Not correct

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

The following is a process that makes up the purchasing system at Alex Manufacturing Ltd.

For this process, select whether it represents a Big Strength, Big Deficiency, Small Impact or No Impact on the purchasing system.

• Payments are made by direct transfer. The direct transfer list is authorised by the financial controller, who checks the payments t o supporting documents, such as the invoice or service agreement.

Select ONE answer:

1. No Impact
2. Big Strength
3. Small Impact
4. 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 2

1. Not correct
2. Correct ==> Strength – payments authorised
3. Not correct
4. Not correct

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