14. With regard to the accounts payable department, which statement is false?

a) The receiving report provides evidence of the physical receipt of the goods.

b) The purchase order proves that the purchase was requested.

c) The purchase requisition shows that the order was authorized.

d) The suppliers invoice indicates the financial value of the transaction.

15. A fundamental principle of responsibility accounting is that

a) The information flow is in two direction

b) A managers span of control should exceed eight people

c) Managers are accountable only for items they can control

d) Managers are accountable for items they cannot control

16. Which of the following is a problem associated with standard cost accounting?

a) The financial orientation of standard costing does not promote bad decisions.

b) Applying standard costing leads to product cost distortions in a lean environment.

c) Standard cost data are not associated with excessive time lags that reduce its usefulness.

d) Standard costing encourages management from producing large batches of products and build inventory.

17. Which of the following management principles affects the management reporting system?

a) Formalization of tasks

b) Limitations in authority

c) Reporting responsibilities

d) All of the above

18. Which statement is true? Responsibility accounting

a) Involves both a top-down and bottom-up flow of information

b) Acknowledges that some economic events can be traced to any employees of the organization

c) Creates a budget and sets financial ratio

d) Compares actual performance with previous period

19. An example of a continuous process is the production of

a) All of the above

b) Pre-loved items

c) Television

d) Paint

20. Which situation does not violate the segregation of functions control procedure?

a) Employee record direct labor on job tickets

b) Production planning and control is located adjacent to the work centers

c) Cost accounting has custody of and makes entries on cost records

d) Inventory control maintains custody of inventory items

21. In a service firm, authorization for the purchase of inventory is the responsibility of

a) Inventory control

b) Cash disbursements

c) Accounts payable

d) Purchasing

22. A copy of the purchase order is given to the following departments except

a) Receiving

b) Accounts payable

c) Purchasing

d) Inventory control

23. When purchasing inventory, which document usually does not trigger the recording of a liability?

a) Purchase order

b) Purchase requisition

c) Suppliers invoice

d) Receiving report