Question

1. what control best prevents the receipt of items in the warehouse that are not ordered?

a. reconciliation of PO's to Receiving report

b. Bar-code scanners

c. receiving should have approved purchase order before receiving inventory\

2. what control prevents paying the same invoice twice?

a. only treasury should do cash disbursements

b. only pay original invoices

c. reconcile vender invoices to vendor payments

3. what control best prevents paying for items ordered, but yet received?

a. all receiving reports should be prenumbered

b. reconcile PO to Receiving report before making payment

c. all PO's should be prenumbered

Answer 1

1) c

explanation: Because we need to prevent the receipt of goods not ordered, so we need to take a step before receiving the item.Therefore, receiving should have an approved purchase order BEFORE taking the actual delivery of the order.

2) b

explanation To prevent paying the same invoice twice only the original invoice should be paid because using this way we will only pay for the original invoice and not for any copy of invoice.
Whereas, we can only reconcile the vendor invoice and vendor payments AFTER the payment has been made , therefore it is not useful. Using only treasury to make cash disbursement would also not help as he may pay for a duplicate invoices too. So using option B is the best solution.

3) b

explanation The best way to pervent paying for the items, not received yet is by reconciling the PO with the receiving report before making payment. As by this way we will only pay for items that have been recorded by the receivin department. Whereas, using prenumbered reports can be misleading as receipt of item may not be as per the said schedule.