Tag: Topic 2

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.

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.

• Invoices for services are checked against the service provider’s proof of delivery, which is requested from each service provider.

Select ONE answer:

1. Big Strength
2. No Impact
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 1

1. Correct – ==> Strength – company only recognises liability for services received
2. Not correct
3. Not correct
4. Not correct

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

Bash and Co, the auditor of Alex Manufacturing Ltd., has identified the following deficiency within that business’s accounting system.

For the deficiency identified below, select the MOST likely consequence which might arise because of this deficiency.

• Invoices are not checked against the original orders.

Select ONE answer:

1. Sales receipts
2. Sales invoices
3. Goods dispatch notes
4. Sales orders

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 – The checking of invoices to orders will reduce the risk of accepting invoices for goods or services which were not ordered.
4. Not correct

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

Bash and Co, the auditor of Alex Manufacturing Ltd has identified the following deficiency within that business’s
accounting system.

For the deficiency identified below, select the MOST likely consequence which might arise because of this deficiency.

• Goods inwards are not checked.

Select ONE answer:

1. False invoices could be paid
2. Accepting inferior quality goods
3. Services received are not accurately recorded
4. The Supplier Will become unhappy with Alex Manufacturing Ltd

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 – 1 is incorrect as it does not relate to the goods inwards stage of the purchase system. 3 is also erroneous, as the question refers to goods and not services.
3. Not correct
4. Not correct

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

For the following example, select the type of internal control activity it represents?

• Numerical sequence checks are undertaken on goods received records.

Select ONE answer:

1. Information processing
2. Authorisation
3. Matching
4. Performance review

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 – Checking numerical sequences helps ensure completeness of records.
2. Not correct
3. Not correct
4. Not correct

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