1. Which of the following is (are) true about the expenditure cycle?
   1. The primary external information exchange is with customers.
   2. Expense data flow from the expenditure cycle to the general ledger and reporting system.
   3. The primary objective of the expenditure cycle is to minimize the total cost of retaining customers.
   4. All of the statements above are true.
   5. None of the statements above is true.
2. Which of the following is (are) used to determine the reorder point of inventory items?
   1. Delivery time
   2. Desired stock levels to handle unexpected demand fluctuations
   3. Number of items required
   4. Only a. and b.
   5. None of the above
3. In which of the following cases will a debit memo be prepared? (Select all that apply.)
   1. When the quantity of goods received is different from the amount ordered
   2. When damaged goods are received
   3. When poor quality goods are received
   4. When a duplicate payment has been made
   5. When inventory is moved from the warehouse to the loading dock
4. Why should the receiving department have access to the open purchase order file?
   1. To ensure accurate counts of inventory received
   2. To compare actual versus budgeted expenses
   3. To only accept deliveries with a valid purchase order
   4. To reduce costs of unloading and storing unordered goods
   5. All of the above
5. What can be used to reduce the number of small invoices paid by accounts payable?
   1. Disbursement voucher
   2. ERS
   3. Non-voucher system
   4. Procurement card
   5. Imprest fund