D251 WGU EXAM REVISION QUESTIONS
AND CORRECT ANSWERS!!
What is the most important control related to Purchases?
The authorized vendor database
What are all the Purchasing controls mentioned in the textbook?
Approval supplier contracts, restricted access to relevant computer programs, a bidding process
for large purchases, monitoring inventory and purchase levels
What are the AICPA guidelines to prevent and detect vendor fraud?
1. Perform due diligence when selecting new vendor
2. Ensure segregation of duties
3. Use data analytics
4. Provide training to all employees
6. establish a fraud hotline
T or F
Because a purchase order is an external document, its level of reliability is higher than that
of a requisition, which is an internal document.
False
What is a typical control associated with the requisition process for inventory purchases in
a just-in-time manufacturing process?
An agreement is signed with the supplier whereby the supplier agrees to ship merchandise
according to the production schedule set by the manufacturer.
, What are the 7 steps that an auditor takes for planning analytical procedures?
1. Determine suitability of a particular procedure
2. Evaluate reliability of data
3. Develop an expectation of preciseness of data
4. Define expectations and recorded amounts
5. Compare expectations to recorded amounts
6. Investigate unexpected differences
7. Ensure documentation of all previous steps
inventory turnover formula
COGS/ending Inventory
number of days sales in inventory formula
365/inventory turnover
Shrinkage Ratio formula?
Inventory write-down/ending inventory
Accounts Payable Turnover Formula
Purchases/Average Accounts Payable
Days outstanding in accounts payable formula
365/accounts payable turnover
AP Turnover Ratio Formula
Accounts Payable/Current liabilities
AND CORRECT ANSWERS!!
What is the most important control related to Purchases?
The authorized vendor database
What are all the Purchasing controls mentioned in the textbook?
Approval supplier contracts, restricted access to relevant computer programs, a bidding process
for large purchases, monitoring inventory and purchase levels
What are the AICPA guidelines to prevent and detect vendor fraud?
1. Perform due diligence when selecting new vendor
2. Ensure segregation of duties
3. Use data analytics
4. Provide training to all employees
6. establish a fraud hotline
T or F
Because a purchase order is an external document, its level of reliability is higher than that
of a requisition, which is an internal document.
False
What is a typical control associated with the requisition process for inventory purchases in
a just-in-time manufacturing process?
An agreement is signed with the supplier whereby the supplier agrees to ship merchandise
according to the production schedule set by the manufacturer.
, What are the 7 steps that an auditor takes for planning analytical procedures?
1. Determine suitability of a particular procedure
2. Evaluate reliability of data
3. Develop an expectation of preciseness of data
4. Define expectations and recorded amounts
5. Compare expectations to recorded amounts
6. Investigate unexpected differences
7. Ensure documentation of all previous steps
inventory turnover formula
COGS/ending Inventory
number of days sales in inventory formula
365/inventory turnover
Shrinkage Ratio formula?
Inventory write-down/ending inventory
Accounts Payable Turnover Formula
Purchases/Average Accounts Payable
Days outstanding in accounts payable formula
365/accounts payable turnover
AP Turnover Ratio Formula
Accounts Payable/Current liabilities
