ACC321 Exam 2 Flashcards
(86 cards)
Expenditure cycle
A recurring set of business activites and related information processing operations associated with the purchase of and payment for goods and services
Objectives of the expenditure cycle
Tracking purchases of goods and or services from vendors, tracking amounts owed, maintaining vendor records, controlling inventory, making timely and accurate vendor payments, forecasting purchases and cash outflows
Included in the expenditure cycle
Request goods, order goods, recieve goods, approve invoices, pay for goods, returns
Purchase requisition
Documents the need to purchase goods for supplies. What how when to purchase, not whi
Request goods opportunites for using info tech
Electronic purchase requition, automatic reordering
Purchase order
Formally request a vendor to sell and deliver specified products at specified prices also a promise to pay
Order goods opportunites for using info tech
Electronic data interchage to reduce costs, linking edi to point of sales, vendor managed inventory, on line ordering
Order goods threats and controls
Stockouts/excess inventory, ordering unnecessary items, purchasing goods at inflated prices, purching bad quality, purchasing from unautorized suppliers, kickbacks
Receiving report
Documents the details of each delivery
Recieve goods IT
Bar coding, rfid, gps locating of shipments
Recieve goods threats/controls
Recieving unordered goods, errors in counting recieved foods, stealing inventory
Disbursements voucher
Summarizes the info in a set of vendor invoices-authorized payment
Risk and controls cash disbursement process
Authorization of transactions, segregation of duties, three way match, business process reengineering
Three way match
Matching of a purchase order to the related recieving report and invoice
Business process reengineering
Computer based matching and checking of purchasing documents
Approve invoices IT
Edi invoicing, matching edi invoice to computer supporting documents, eliminating invoices entirely, procurment cards and company cards
Pay for goods IT
Electronic funds transfer for paying vendors
Approve/pay threats and control
Failing to catch errors in invoice, paying for goods not recieved, failing to take available discounts, pauong the same invoice twice, recording and posting errors in ap, misappropriation of moneh
Outputs of the purchasing process
Financial statement info, vendor checks, check register
Continuous processing
Creates a homogeneous product through a continuous series of standard procedures
Batch processing
Produce descrete groups of products. Each item in the batch is similar
Make to order processing
Involves the fabrication of discrete products in accordance with customer specifications
The production cycle
A recurring set of business activites and related info processing operaions associatd with convering raw inputs to outputs
Production cycle includes
Product design, planning and scheduling, production operations, cost accounting
