Question 1

The raw material purchasing reports can provide management with insight into how to improve processes. Additional raw materials purchasing analytics can be used for decision making and dashboards. Which raw material purchasing analytic analyzes the frequency of purchasing at a single vendor increasing greater than a threshold over time?

Accepted Answer

Vendor frequency analytics specifically analyze how often purchases are made from a single vendor, including any increases in frequency that exceed a predetermined threshold, which is directly related to the question's focus.

Question 2

The raw material purchasing reports can provide management with insight into how to improve processes. Additional raw materials purchasing analytics can be used for decision making and dashboards. Which raw material purchasing analytic analyzes vendors with the same telephone number, address, or email?

Accepted Answer

Duplicate vendor data analytics specifically focuses on identifying vendors that may have been entered into the system more than once, potentially under slightly different names but with the same contact information such as telephone number, address, or email. This can help in cleaning up the vendor database and ensuring more accurate purchasing and financial reporting.

Question 3

The raw material purchasing reports can provide management with insight into how to improve processes. Additional raw materials purchasing analytics can be used for decision making and dashboards. Which raw material purchasing analytic compares vendor telephone numbers, addresses, emails, and bank accounts to the employee master table?

Accepted Answer

Vendor-employee comparison analytics specifically looks at comparing vendor contact information, such as telephone numbers, addresses, emails, and bank accounts, to the employee master table to identify any potential conflicts of interest or fraudulent activities.

Question 4

The raw material purchasing reports can provide management with insight into how to improve processes. Additional raw materials purchasing analytics can be used for decision making and dashboards. Which raw material purchasing analytic analyzes discount terms given, discounts taken, and discounts forfeited?

Accepted Answer

Discounts analytics specifically focuses on analyzing the terms of discounts offered by suppliers, the discounts actually taken advantage of by the purchasing company, and any discounts that were available but not utilized. This analysis helps in understanding how well the company is leveraging discount opportunities to reduce costs.

Question 5

The raw material purchasing reports can provide management with insight into how to improve processes. Additional raw materials purchasing analytics can be used for decision making and dashboards. Which raw material purchasing analytic calculates purchasing ratios, such as accounts payable turnover days, purchasing to sales, and purchases growth to sales growth?

Accepted Answer

Financial ratios are the analytics that calculate purchasing ratios like accounts payable turnover days, purchasing to sales, and purchases growth to sales growth. These ratios are crucial for understanding the financial health and efficiency of the purchasing process.

Question 6

The data collected during the accounts payable process can be converted into several accounts payable reports. Below is a list of some of those reports. Which accounting journal report captures all payments recorded?

Accepted Answer

The Cash Disbursements Journal captures all payments recorded, including those made to vendors, thereby detailing the outflow of cash from the business.

Question 7

The data collected during the accounts payable process can be converted into several accounts payable reports. Below is a list of some of those reports. Which report summarizes purchases by vendor over a specific period of time to look for unusual activity?

Accepted Answer

The "Purchases by vendor" report summarizes purchases by each vendor over a specific period, making it easier to spot any unusual activity or trends in purchasing.

Question 8

The data collected during the accounts payable process can be converted into several accounts payable reports. Below is a list of some of those reports. Which report lists outstanding accounts payable balances, which can be summarized by vendor?

Accepted Answer

The answer of The data collected during the accounts payable...

Question 9

The data collected during the accounts payable process can be converted into several accounts payable reports. Below is a list of some of those reports. Which report summarizes outstanding accounts payable by vendor and separates them into buckets based on the number of days outstanding?

Accepted Answer

The Vendor Aging Report summarizes outstanding accounts payable by vendor and categorizes them into different time frames based on the number of days the invoices have been outstanding. This helps businesses manage their payables more efficiently by identifying overdue payments.

Question 10

There are five business activities involved in the purchasing process.
i. Pay for the inventory received
ii. Order the inventory
iii. Determine inventory to order
iv. Receive the inventory
v. Request availability and prices
Put these activities in the correct order.

Accepted Answer

The answer of There are five business activities involved in...

Question 11

Raw materials are purchased from a seller, called a supplier or vendor. While the terms "supplier"
and "vendor"
may sound interchangeable, there's a subtle difference between them. Briefly describe the differences between suppliers and vendors.

Accepted Answer

The answer of Raw materials are purchased from a seller,...

Question 12

RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. RAM Manufacturing maintains a lot of inventory and uses NetSuite as their ERP system. RAM Manufacturing uses an approved vendor table. Senior management of RAM Manufacturing wants to ensure that only approved vendors are used. Discuss some of the general control activities RAM Manufacturing may want to implement for the approved vendor table.

Accepted Answer

The answer of RAM Manufacturing LLC is a rapidly growing...

Question 13

RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. RAM Manufacturing maintains a lot of inventory and uses NetSuite as their ERP system. Senior management of RAM Manufacturing wants to ensure that appropriate controls are used in the purchasing department. Discuss some of the general control activities RAM Manufacturing may want to implement for purchase orders.

Accepted Answer

The answer of RAM Manufacturing LLC is a rapidly growing...

Question 14

RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. RAM Manufacturing maintains a lot of inventory and uses NetSuite as their ERP system. Senior management of RAM Manufacturing wants to ensure that appropriate controls are used in the receiving department. Discuss some of the general control activities RAM Manufacturing may want to implement for receiving.

Accepted Answer

The answer of RAM Manufacturing LLC is a rapidly growing...

Question 15

RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. RAM Manufacturing maintains a lot of inventory and uses NetSuite as their ERP system. RAM Manufacturing recently purchased a new warehouse building for $350,000, paid $3,000 in legal fees, $10,000 in agent commissions and $150,000 to remodel the warehouse. The land on which the warehouse sits cost $170,000. RAM Manufacturing took out a mortgage for $500,000 and paid the remainder in cash. Record the journal entry.

Accepted Answer

The answer of RAM Manufacturing LLC is a rapidly growing...

Question 16

RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. RAM Manufacturing maintains a lot of inventory and uses NetSuite as their ERP system. RAM Manufacturing recently purchased a new laser marking machine for $27,500 and a used industrial strength lathe for $25,300. $1,950 worth of cleaning and maintenance was required to get the lathe ready for use. RAM Manufacturing took out an equipment loan for $40,000 and paid the remainder in cash. Record the journal entry.

Accepted Answer

The answer of RAM Manufacturing LLC is a rapidly growing...

Question 17

RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. RAM Manufacturing is considering purchasing and implementing an ERP system but has not yet chosen a vendor. Maeve, an accounts payable clerk, manually recorded a payment in the wrong vendor account and this eventually resulted in duplicate payments to the vendor.
What control activity could be implemented to prevent this risk in the future?

Accepted Answer

The answer of RAM Manufacturing LLC is a rapidly growing...

Question 18

RAM Manufacturing LLC is a small but rapidly growing manufacturer of parts for the automotive industry. RAM Manufacturing is considering purchasing and implementing an ERP system but has not yet chosen a vendor. Maeve, an accounts payable clerk, processes accounts payable twice per month and regularly fails to take advantage of offered vendor payment discounts.
What control activity could be implemented to prevent this risk in the future?

Accepted Answer

The answer of RAM Manufacturing LLC is a small but...

Question 19

RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. Maeve, an accounts payable analyst, is performing a three-way match before issuing payments to the vendors. RAM Manufacturing recently went live with NetSuite as their ERP system. However, they have not yet started using the receiving system and use Microsoft Excel to track receipts. Therefore, Maeve must match the combined purchase order and invoice with a separate spreadsheet that has the receiving report data.
Purchase and invoice data:
  Receiving report spreadsheet:
  Do all the invoices pass the three-way match? If not, explain why.

Accepted Answer

The answer of RAM Manufacturing LLC is a rapidly growing...

Question 20

RAM Manufacturing LLC is a rapidly growing manufacturer of parts for the automotive industry. Maeve, an accounts payable analyst, is performing a three-way match before issuing payments to the vendors. RAM Manufacturing recently went live with NetSuite as their ERP system. However, they have not yet started using the receiving system and use Microsoft Excel to track receipts. Therefore, Maeve must match the combined purchase order and invoice with a separate spreadsheet that has the receiving report data.
Purchase and invoice data:
  Receiving report spreadsheet:
  Do all the invoices pass the three-way match? If not, explain why.

Accepted Answer

The answer of RAM Manufacturing LLC is a rapidly growing...

Quiz 10: Purchasing and Payments Process

The data collected during the accounts payable process can be converted into several accounts payable reports. Below is a list of some of those reports. Which accounting journal report captures all payments recorded?

The data collected during the accounts payable process can be converted into several accounts payable reports. Below is a list of some of those reports. Which report summarizes purchases by vendor over a specific period of time to look for unusual activity?

The data collected during the accounts payable process can be converted into several accounts payable reports. Below is a list of some of those reports. Which report lists outstanding accounts payable balances, which can be summarized by vendor?

The data collected during the accounts payable process can be converted into several accounts payable reports. Below is a list of some of those reports. Which report summarizes outstanding accounts payable by vendor and separates them into buckets based on the number of days outstanding?

There are five business activities involved in the purchasing process. i. Pay for the inventory received ii. Order the inventory iii. Determine inventory to order iv. Receive the inventory v. Request availability and prices Put these activities in the correct order.

Raw materials are purchased from a seller, called a supplier or vendor. While the terms "supplier" and "vendor" may sound interchangeable, there's a subtle difference between them. Briefly describe the differences between suppliers and vendors.