Chapter 13—The Accounts Payable/Cash Disbursements (AP/CD)
Process Key
1. The cashier is responsible for processing vendor invoices, preparing payment vouchers, and recording
purchase and disbursement transactions.
2. The notification of an obligation to pay a vendor for merchandise that was ordered and received is known as
a purchase order.
3. A true voucher system requires that all expenditures for whatever purpose and in excess of a certain dollar
amount be formally approved for payment before they can be paid.
4. The vendor invoice master data is a repository of all unpaid vendor invoices.
5. The AP/CD process is an interacting structure of people, equipment, activities, and controls that is designed
to accomplish the handling of repetitive work routines of the AP department and the cashier, support their
decision needs, and assist in the preparation of internal and external reports.
6. The cashier usually reports to the controller.
7. The VP of finance usually has the cashier and the controller directly reporting to him (her).
8. When it is time to make a payment, an approved voucher is sent to the accounts payable department.
9. The Level 0 diagram of the AP/CD Process contains the two process bubbles depicting the two major logical
steps in the process: Establish payable and Approve checks.
10. When the vendor payment is made, the general ledger is updated for the cash disbursement.
11. The vendor invoice triggers the “establish payable” process.
12. The vendor sends a confirmation to establish the payable.
13. A disbursement voucher is designed to reflect formal approval of the voucher for payment and to provide
such added data as the account distribution and the amounts to be debited.
14. The purchase order triggers the make payment process.
15. Within the make payment process, the three sub-processes are “Prepare proposed payments,” “Select and
record payments,” and “Issue and record disbursements.”
16. The trigger for either a true voucher process or a nonvoucher process is a payment request.
17. The cash disbursements event data shows, in alphabetical order, the details of each cash payment made.
18. In the ER diagram for AP/CD process, CASH_DISBURSEMENTS are prepared by EMPLOYEES
(Treasury Employees).
19. In the ER diagram of the AP/CD process, VALID_INVOICES are received from the purchasing
department.
20. In a relational table for PURCHASE_RECEIPTS, the primary key would be the receipt number (Rec_No).
21. In a relational table for VALID_INVOICES, the primary key would be the vendor number.
22. In the flowchart for the AP/DC process the symbol below represents the enterprise database.
23. Fraud abuses in the AP/CD process usually entail creating phony customers or submitting fictitious
purchase orders.
24. Independent validation of vendor invoices helps ensure that appropriate cash discounts are obtained.
25. The duties of the cashier are segregated from the treasurer to protect the cash resource.
26. The cash disbursements process uses disbursement vouchers as inputs to update the accounts payable master
27. A key control in the AP/CD process is to segregate the treasurer and controller.
28. Chapter 13 describes the electronic invoicing and payment (EIPP) system for the B2C environment.
29. The electronic invoicing and payment (EIPP) system for the B2B environment is similar to the electronic
bill presentment and payment (EBPP) system for the B2C environment.
30. Evaluated receipt settlement (ERS) is a process by which an organization pays for a purchase on the basis of
the goods receipt.
31. Purchase returns and allowances usually occur at the point of inspecting and counting the goods or at the
point of validating vendor invoices.
32. Spear phishing is a type of phishing attack that is sent to a wide variety of persons. The e-mail appears to be
coming from an individual or organization that the recipient recognizes and from whom they normally receive
e-mails.
33. Independent authorization to make payment ensures that only authorized purchases are made.
34. The “three-way match” matches the invoice with the purchase order and disbursement voucher.
35. It is difficult to independently validate the vendor invoice if we do not segregate purchasing, receiving, and
accounts payable.
36. The typical AP/CD process would capture and record data related to the day-to-day operations of all of the
following departments except:
37. Which of the following is least likely to report (either directly or indirectly) to the vice president of
finance?
A. controller
38. Which of the following managers is most likely to report to the controller?
39. The typical horizontal flows of information in an accounts payable/cash disbursements process might
include all of the following except:
A. an invoice is received from a vendor
40. Which of the following process bubbles would you not expect to see in the logical DFD for an AP/CD
process?
41. In an AP/CD process “establish payable” would normally be triggered by:
42. In an AP/CD process, a process “make payment” normally would be triggered by the data flow:
A. purchase order
43. At the time that an AP/CD process makes payment for goods or services, the process generally follows
which order.”
A. select and record payments, prepare proposed payments, issue and record disbursements
44. When the AP/CD process records a payable obligation, the data flow between “validate invoice” and “record
payable” is?
45. In the Level 0 DFD for an AP/CD process, a data flow called “vendor invoice” most likely would be sent by
the vendor to which of the following processes?
46. In the Level 0 DFD for an AP/CD, a data flow called “receiving report” most likely would be sent by the
purchasing process to which of the following processes?
47. Data flows of an AP/CD process normally might include all of the following except:
48. Who usually authorizes a payment?
A. the controller
49. Which of the following is designed to reflect the formal approval of the voucher for payment?
A. a vendor invoice
50. An exception routine is usually performed for:
51. Payments not typically supported by invoices include:
A. payroll
52. The document one business sends to another business that identifies the amount to be paid is:
53. Which document typically notifies the purchaser of his or her obligation to pay?
A. vendor packing slip
54. Which of the following documents would be matched with the vendor invoice to ensure that the purchase
was authorized (i.e., to ensure input validity)?
55. In a typical, efficient AP/CD process, you would expect that “validating” a vendor invoice might include all
of the following steps except:
56. Which disbursement system most easily facilitates paying a number of invoices with a single check?
57. Which of the following activities would not occur when an inventory manager decides to return
merchandise to a vendor?
58. In a voucher system, the data flow between the originating department and the process “prepare
disbursement voucher” typically is:
59. Which of the following statements regarding evaluated receipt settlement (ERS) is false?
A. ERS is a system by which an organization pays for a purchase on the basis of the goods receipt.
60. Information for evaluating vendor performance normally would reside on the:
61. In an entity-relationship (E-R) diagram for the accounts payable/cash disbursements process, you would
expect that the words sent to would appear in the diamond showing the relationship between:
62. A company using a centralized database approach to data management might not maintain a relational table
for ACCOUNTS PAYABLE. Rather, accounts payable balances at any point in time could be computed as the
difference between the relations for which of the following continuous events?
A. PURCHASE_ORDERS and INVENTORY_RECEIPTS
63. What factor has caused an escalation of check forgeries in recent years?
64. Which of the following items is not a control plan of the AP/CD process?
65. The resources for which the AP/CD process wants to ensure security typically include all of the following
except:
66. The control plan tickler file of payments due, is directed primarily at which of the following control goals?
A. select a vendor who will provide the best quality at the lowest price by the promised delivery date
67. A control plan that helps ensure the security of resources within the AP/CD process is:
A. requisition confirmation to originating department
68. A control plan to ensure input accuracy in payables processing is:
69. The control plan independent validation of vendor invoice is directed primarily at which of the following
control goals?
70. The AP application matches invoices, quantities, prices and terms when it performs the control plan:
71. For payment voucher input validity, which control plan uses records in the AP master data to give
authorization to the cash disbursements computer program to make a payment?
73. Which control is most likely to address the goal of input completeness?
A. agreement of run-to-run totals
74. The AP/CD process handles the repetitive work routines of:
75. The debit entry in the general ledger at the time that the vendor invoice is recorded will be to a clearing
account because of the:
A. design of the business process
76. An enterprise system may facilitate the AP/CD process by linking:
A. the PO and receiving report
77. Information technology has enhanced the AP/CD process by:
78. The ______________________________ department is responsible for processing vendor invoices,
preparing disbursement vouchers, and recording purchase and disbursement transactions.
79. The notification of an obligation to pay a vendor for merchandise that was ordered and received is known as
a(n) ______________________________.
80. In an AP/CD process, a frequent exception routine is caused by ______________________________.
81. To initiate an adjustment for returned goods or for a price allowance in the case of otherwise nonconforming
goods, someone usually prepares a(n) ______________________________ and sends it to the vendor.
82. A true ______________________________ system requires that all expenditures be formally approved for
payment and be recorded as a payable before they can be paid.
83. The ______________________________ data is a repository of all unpaid vendor invoices.
84. The ______________________________ is an interacting structure of people, equipment, activities, and
controls that is designed to accomplish the handling of repetitive work routines of the AP department and the
cashier, support their decision needs, and assist in the preparation of internal and external reports.
85. The cashier usually reports to the ______________________________.
86. The VP of finance usually has the ______________________________ and the
______________________________ directly reporting to him (her).
87. When it is time to make a payment, an approved ______________________________ is sent to the cashier.
88. The Level 0 diagram of the AP/CD Process contains the two process bubbles of
______________________________ and ______________________________.
89. The vendor sends a(n) ______________________________ to notify the purchaser of an obligation to pay
for goods or services ordered by and shipped to the purchaser.
90. The ______________________________ triggers the “establish payable” process.
91. A(n) ______________________________ is designed to reflect formal approval of a payment and to
provide such added data as the account distribution and the amounts to be debited.
92. The ______________________________ triggers the “make payment” process.
93. Within the make payment process, the three sub-processes are “Prepare proposed payments”, “Select and
record payments,” and ______________________________.
94. When processing non-invoiced disbursements, the trigger for either a true voucher process or a non voucher
process is a(n) ______________________________.
95. The ______________________________ master data store is a repository of all unpaid vendor invoices.
96. The ______________________________ data shows, in chronological sequence, the details of each cash
payment made.
97. In the ER diagram for AP/CD process, CASH_DISBURSEMENTS are
______________________________ by EMPLOYEES (Treasury Employees).
98. In the ER diagram of the AP/CD process, VALID_INVOICES are received from the
______________________________.
99. In a relational table for PURCHASE_RECEIPTS, the primary key would be the
______________________________.
100. In a relational table for VALID_INVOICES, the primary key would be the
______________________________.
101. Fraud abuses in the AP/CD process usually entail creating phony ______________________________ or
submitting fictitious invoices.
102. The control plan ______________________________ includes an aging of open vouchers / accounts
payable records that is produced and reviewed on a regular basis in order to ensure that there is an adequate
cash reserve to make required payments.
103. Input validity for ______________________________ is ensured by making sure that the invoice is for
goods that were actually ordered and actually received.
104. The AP process that uses vendor invoices for inputs updates the ______________________________
master data.
105. ______________________________ is an exception that usually occurs at the point of inspecting and
counting the goods or when validating vendor invoices.