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Accounting Information Systems, 12e (Romney/Steinbart)

Chapter 13 The Expenditure Cycle: Purchasin to Cash !isbursements


1) The Squishy Things Toy Company was established in 1948. It recently signed a large contract with a
chain o retail toy stores. !s a condition o the contract" the Squishy will be required to trac# and
orecast product sales by lin#ing in to the chain$s sales database. Squishy will then be responsible or
shipping products to the chain$s regional warehouses as needed. The relationship between Squishy and
the chain is an e%ample o
!) &endor'managed in&entory.
() sales orce automation.
C) electronic data interchange.
)) optical character recognition.
!nswer* !
+age ,e* -8.
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
.) ,equiring all pac#ing slips be reconciled to purchase orders beore accepting a deli&ery o in&entory
would be most li#ely to pre&ent which o the ollowing situations3
!) ! supplier deli&ers more in&entory than ordered at the end o the year and sends an in&oice or the
total quantity deli&ered.
() !n employee mails a a#e in&oice to the company" which is then paid.
C) The in&entory records are incorrectly updated when a recei&ing department employee enters the
wrong product number on the recei&ing report.
)) ,ecei&ing department employees steal in&entory and then claim the in&entory was recei&ed and
deli&ered to the warehouse.
!nswer* !
+age ,e* -84
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* ,electi&e Thin#ing
-) Comparing quantities on a &endor in&oice to quantities on the recei&ing report would not pre&ent or
detect which o the ollowing situations3
!) ,ecei&ing and accepting in&entory not ordered
() Thet o in&entory by recei&ing department employees
C) 6pdate o wrong in&entory items due to data entry error
)) /rder or an e%cessi&e quantity o in&entory
!nswer* !
+age ,e* -84
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* ,electi&e Thin#ing
1
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
4) :hich o the ollowing would probably be the least eecti&e control to mitigate the ris# o paying an
in&oice payable to a phony &endor or in&entory purchases" mailed to the company by an employee
attempting to commit raud3
!) /nly pay rom original in&oices.
() Cancel all in&oices and supporting documentation when paid.
C) Strict access and authori;ation controls or the appro&ed &endor master ile.
)) ,equire three'way match or all in&entory purchase in&oices.
!nswer* !
+age ,e* -8<
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* ,electi&e Thin#ing
=) :hich o the ollowing would be the least eecti&e control to pre&ent paying the same &endor
in&oice twice3
!) !llow only the accounts payable department to authori;e payment or &endor in&oices and allow
only the cash disbursements department to cut and mail chec#s to &endors.
() /nly pay rom original in&oices.
C) Cancel each document in the &oucher pac#age once the chec# is prepared and mailed.
)) /nly pay &endor in&oices that ha&e been matched and reconciled to a purchase order and a recei&ing
report.
!nswer* !
+age ,e* -91
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* ,electi&e Thin#ing
4) To accomplish the ob0ecti&es set orth in the e%penditure cycle" a number o #ey management
decisions must be addressed. :hich o the decisions below is not ordinarily ound as part o the
e%penditure cycle3
!) 9ow can cash payments to &endors be managed to ma%imi;e cash low3
() :hat is the optimal le&el o in&entory and supplies to carry on hand3
C) :here should in&entories and supplies be held3
)) :hat are the optimal prices or each product or ser&ice3
!nswer* )
+age ,e* -<.
/b0ecti&e* 1earning /b0ecti&e .
)iiculty * 2asy
!!CS(* !nalytic
.
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
<) /ne o the basic acti&ities in the e%penditure cycle is the recei&ing and storage o goods" supplies"
and ser&ices. :hat is the counterpart o this acti&ity in the re&enue cycle3
!) sales order entry process
() shipping unction
C) cash collection acti&ity
)) cash payments acti&ity
!nswer* (
+age ,e* -<-
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* ,electi&e Thin#ing
8) The traditional approach to in&entory management to ensure suicient quantity on hand to maintain
production is #nown as
!) saety stoc#.
() 0ust'in'time production.
C) economic order quantity.
)) optimal in&entory quantity.
!nswer* C
+age ,e* -<8
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
9) 2conomic /rder >uantity ?2/>) includes se&eral &ariables that must be ta#en into consideration
when calculating the optimal order si;e. /ne &ariable" the costs associated with holding in&entory" is
reerred to as
!) ordering costs.
() carrying costs.
C) the reorder point.
)) stoc#out costs.
!nswer* (
+age ,e* -<8
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
18) The need to place an order or in&entory is speciied by the
!) company in&entory policies.
() economic order quantity.
C) stoc#out point.
)) reorder point.
!nswer* )
+age ,e* -<8
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
-
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
11) :hen goods are being ordered rom a &endor" which electronic iles are either read or updated3
!) in&entory" &endors" and accounts payable
() &endors and accounts payable
C) open purchase orders and accounts payable
)) in&entory" &endors" and open purchase orders
!nswer* )
+age ,e* -<4
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
1.) :hat is a #ey eature o materials requirements planning ?5,+)3
!) minimi;e or entirely eliminate carrying and stoc#out costs
() reduce required in&entory le&els by scheduling production rather than estimating needs
C) determine the optimal reorder point
)) determine the optimal order si;e
!nswer* (
+age ,e* -<8
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
1-) 5aterials requirements planning ?5,+)
!) reduces the uncertainty about when materials are needed" thereby reducing the need to carry large
le&els o in&entory.
() is able to compute e%actly the cost o purchasing by ta#ing into account all costs associated with
in&entory carrying.
C) requires &endors to deli&er in&entory to the production site e%actly when needed and in the correct
quantities.
)) @one o the abo&e are correct.
!nswer* !
+age ,e* -<8
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
14) The in&entory management approach that attempts to minimi;e" i not eliminate" carrying and
stoc#out costs is
!) materials requirements planning.
() economic order quantity.
C) 0ust'in'time in&entory.
)) e&aluated receipt settlement.
!nswer* C
+age ,e* -<8
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * )iicult
!!CS(* !nalytic
4
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
1=) :hat aspect below best characteri;es a Aust'In'Time ?AIT) in&entory system3
!) requent deli&eries o smaller quantities o items to the wor# centers
() requent deli&eries o large quantities to be held at the wor# centers
C) less requent deli&eries o large quantities o goods to central recei&ing
)) inrequent bul# deli&eries o items directly to wor# centers
!nswer* !
+age ,e* -<8'-<9
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
14) :hat is the #ey dierence between the 5,+ and AIT in&entory management approaches3
!) /nly AIT reduces costs and impro&es eiciency.
() 5,+ is especially useul or products such as ashion apparel.
C) AIT is more eecti&ely used with products that ha&e predictable patterns o demand.
)) 5,+ schedules production to meet estimated sales needsB AIT schedules production to meet customer
demands.
!nswer* )
+age ,e* -<9
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
1<) 5,+ will be a preerred method o&er AIT when the
!) demand or in&entory is airly predictable.
() demand or in&entory is mostly unpredictable.
C) product has a short lie cycle.
)) 5,+ is always a preerred method o&er AIT.
!nswer* !
+age ,e* -<9
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
18) ! #ey decision in ordering is selecting a suitable &endor. :hich o the ollowing would not be a
ma0or criterion in &endor selection3
!) prices o goods
() quality o goods
C) credit rating o the &endor
)) ability to deli&er on time
!nswer* C
+age ,e* -88
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
=
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
19) /nce a &endor is selected or a product" the &endor$s identity is recorded in the
!) purchase requisition transaction ile.
() purchase requisition master ile.
C) in&entory transaction ile.
)) in&entory master ile.
!nswer* )
+age ,e* -81
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
.8) ! purchase order is
!) a document ormally requesting a &endor to sell a certain product at a certain price.
() a request or deli&ery o certain items and quantities.
C) a contract between the buyer and &endor once accepted by the &endor.
)) !ll o the abo&e are true.
!nswer* )
+age ,e* -81
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
.1) Stepane# Sales and Ser&ice pro&ides ree coee to employees. Stepane# arranged with
Ingebrigtson$s Aoe to deli&er as many coee pac#ages" sugar" creamer" and ilters as needed each wee#.
Ingebrigtson$s sends a monthly in&oice or Stepane# to pay. This arrangement is best described as a
!) blan#et purchase order.
() set purchase order.
C) i%ed purchase order.
)) standard purchase order.
!nswer* !
+age ,e* -81
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
..) ! ma0or cost in the purchasing unction is the number o purchase orders processed. /ne technique
that may reduce purchasing'related e%penses is to ha&e suppliers compete with each other to meet
demand at the lowest price. This name o this technique is
!) an 2)I auction.
() a trading e%change.
C) a re&erse auction.
)) a supplier consortium.
!nswer* C
+age ,e* -8.
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
4
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
.-) /ne o the ma0or responsibilities o the recei&ing department is
!) deciding i the deli&ery should be accepted.
() &eriying any purchase discounts or the deli&ery.
C) deciding on the location where the deli&ery will be stored until used.
)) updating in&entory subsidiary ledgers.
!nswer* !
+age ,e* -84
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
.4) :hich o the ollowing is generally not shown on a recei&ing report3
!) price o the items
() quantity o the items
C) purchase order number
)) counted and inspected by
!nswer* !
+age ,e* -84
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
.=) ! recei&ing cler# notes that a deli&ery o 18 units has been recei&ed" but the purchase order speciied
1. units. ! debit memo will need to be prepared to ad0ust or the dierence between the quantity ordered
and recei&ed. :ho should prepare this document3
!) the recei&ing cler#
() the controller
C) the &endor
)) the purchasing department manager
!nswer* )
+age ,e* -8=
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
.4) Identiy in which o the ollowing scenarios a company could ad0ust the balance due the &endor by
issuing a debit memo.
!) quantity dierent rom that ordered
() damage to the goods
C) goods that ail inspection or quality
)) !ll o the abo&e are possible scenarios.
!nswer* )
+age ,e* -8=
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
<
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
.<) :hat is one o the best ways to impro&e the o&erall eiciency and eecti&eness o the receipt and
storage o ordered items3
!) requiring all suppliers to ha&e the carrier &eriy quantities and item numbers beore shipment
() requiring all suppliers to include ,CI) tags on their items
C) requiring all suppliers to use 2)I to e%pedite the recei&ing department unction
)) requiring all deli&ery truc#s to ha&e satellite data terminals to e%pedite the recei&ing department
unction
!nswer* (
+age ,e* -8=
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
.8) Dendor in&oices are appro&ed by the EEEEEEEE" which reports to the EEEEEEEE.
!) purchasing departmentB controller
() accounts payable departmentB treasurer
C) purchasing departmentB treasurer
)) accounts payable departmentB controller
!nswer* )
+age ,e* -8<
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
.9) The disbursement &oucher and supporting documents are sent to the EEEEEEEE or payment prior to
the due date.
!) cashier
() treasurer
C) controller
)) accounts payable department
!nswer* !
+age ,e* -98
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
-8) !?n) EEEEEEEE system posts an appro&ed in&oice to the &endor account and stores it in an open
in&oice ile until payment is made by chec#.
!) non&oucher
() &oucher
C) cycle
)) e&aluated receipt settlement
!nswer* !
+age ,e* -8<
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
8
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
-1) ! disbursement &oucher contains
!) a list o outstanding in&oices.
() the net payment amount ater deducting applicable discounts and allowances.
C) the general ledger accounts to be debited.
)) !ll o the abo&e are correct.
!nswer* )
+age ,e* -8<
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
-.) /ne ob0ecti&e o accounts payable is to authori;e payment only or goods or ser&ices actually
ordered and recei&ed. The best way to process supplier in&oices is to use
!) electronic unds transer or small" occasional purchases rom suppliers.
() a non&oucher system.
C) 2)I or all small" occasional purchases rom suppliers.
)) a disbursement &oucher system.
!nswer* )
+age ,e* -8<
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
--) :hat is not an ad&antage o using disbursement &ouchers3
!) )isbursement &ouchers reduce the number o chec#s written.
() )isbursement &ouchers can be prenumbered which simpliies the trac#ing o all payables.
C) )isbursement &ouchers acilitate separating the time o in&oice appro&al rom the time o in&oice
payment.
)) There are no disad&antages to using disbursement &ouchers.
!nswer* )
+age ,e* -8<
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
-4) :hich o the ollowing is not an ad&antage o a &oucher system3
!) Se&eral in&oices may be included on one &oucher" reducing the number o chec#s.
() )isbursement &ouchers may be pre'numbered and trac#ed through the system.
C) The time o &oucher appro&al and payment can be #ept separate.
)) It is a less e%pensi&e and easier system to administer than other systems.
!nswer* )
+age ,e* -8<
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
9
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
-=) )uties in the e%penditure cycle should be properly segregated to promote internal control. This
means that the authori;ation unction is perormed by EEEEEEEE" the recording unction is perormed by
EEEEEEEE" and cash handling is perormed by the EEEEEEEE.
!) accounts payableB purchasingB cashier
() purchasingB accounts payableB cashier
C) purchasingB cashierB accounts payable
)) purchasingB accounts payableB treasurer
!nswer* (
+age ,e* -<=
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* !nalytic
-4) ! &oucher pac#age should include
!) a purchase requisition" &endor in&oice" and recei&ing report.
() a purchase order" &endor in&oice" and recei&ing report.
C) a purchase requisition" purchase order" and recei&ing report.
)) a bill o lading and &endor in&oice.
!nswer* (
+age ,e* -8<
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
-<) 2&aluated receipt settlement ?2,S) appro&es payment o &endor in&oices ater reconciling the
purchase order and the
!) &endor in&oice.
() sales in&oice.
C) recei&ing report.
)) disbursement &oucher.
!nswer* C
+age ,e* -88
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 2asy
!!CS(* !nalytic
-8) !ll o the ollowing are opportunities to impro&e eiciency o the accounts payable unction except
!) use blan#et purchase orders.
() con&ert a manual !IS system to 2)I and 2CT.
C) streamline nonin&entory purchases.
)) use e&aluated receipt settlement.
!nswer* !
+age ,e* -8<'-88
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
18
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
-9) :hen purchasing miscellaneous supplies" companies can reduce costs" impro&e eiciency" and
combat employee raud by
!) using procurement cards.
() implementing a AIT in&entory system.
C) requiring employees to personally purchase items then reimbursing employees at the end o each
month.
)) paying amounts out o petty cash.
!nswer* !
+age ,e* -89
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
48) I a&ailable" a 1F discount or payment within 18 days instead o -8 days represents an appro%imate
sa&ings o EEEEEEEE F annually.
!) 1
() 1.
C) 18
)) -4
!nswer* C
+age ,e* -98
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
41) :hat is the best control to mitigate the threat o paying prices that are too high or goods ordered3
!) require the recei&ing department to &eriy the e%istence o a &alid purchase order
() use only appro&ed suppliers and solicit competiti&e bids
C) only pay in&oices that are supported by the original &oucher pac#age
)) use bar'code technology to eliminate data entry errors
!nswer* (
+age ,e* -8.
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* !nalytic
4.) :hat is probably the most eecti&e control or the pre&ention o #ic#bac#s to purchasing agents3
!) purchasing rom appro&ed &endors
() diligent super&ision in the purchasing department
C) a corporate policy to prohibit purchasing agents rom accepting #ic#bac#s
)) re&iews o &endor perormance
!nswer* C
+age ,e* -8-
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* !nalytic
11
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
4-) /ne o the threats associated with the process and acti&ity o recei&ing and storing goods is
!) errors in counting.
() #ic#bac#s.
C) requests or unnecessary items.
)) errors in &endor in&oices.
!nswer* !
+age ,e* -8=
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 2asy
!!CS(* !nalytic
44) :hat is the best way to pre&ent the acceptance o unordered goods3
!) /rder only rom appro&ed &endors.
() 5atch the pac#ing slip to a purchase order beore accepting deli&ery.
C) 2norce an appropriate conlict o interest policy in place.
)) ,equire speciic authori;ation rom the purchasing manager beore accepting any goods.
!nswer* (
+age ,e* -84
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 2asy
!!CS(* !nalytic
4=) :hich o the ollowing is not a common control or ensuring in&entory is secure and in&entory
counts are accurate3
!) control o physical access to the in&entory storage areas
() transers o in&entory with proper documentation
C) sending GblindG copies o purchase orders to in&entory control or data entry
)) ma#ing physical counts o in&entory at least once per year
!nswer* C
+age ,e* -<4
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* !nalytic
44) )ouble'chec#ing the accuracy o an in&oice is a control that can help to neutrali;e a threat in the
e%penditure cycle. :hat acti&ity would speciically be associated with this control3
!) ordering goods
() recei&ing and storing goods
C) paying or goods and ser&ices
)) requesting goods be ordered
!nswer* C
+age ,e* -89
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 2asy
!!CS(* !nalytic
1.
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
4<) :hat control would best mitigate the threat o paying an in&oice twice3
!) ne&er authori;e payment o a photocopy o an in&oice
() double'chec# mathematical accuracy o in&oices
C) appro&al o purchase orders
)) maintaining adequate perpetual in&entory records
!nswer* !
+age ,e* -91
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 2asy
!!CS(* !nalytic
48) :hich control would best pre&ent payments made to ictitious &endors3
!) !llow payments only to appro&ed &endors.
() ,estrict access to any payment or appro&al documents.
C) 9a&e an independent ban# reconciliation.
)) 5a#e sure all documents are in order beore appro&ing payments.
!nswer* !
+age ,e* -9.
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* !nalytic
49) In the e%penditure cycle" good control dictates that e%penditures should be paid by chec#. This may
not be easible when minor purchases are made. To acilitate quic# payment or minor purchases" a?n)
EEEEEEEE should be set up and maintained using EEEEEEEE.
!) special ban# accountB disbursement &ouchers
() imprest undB &ouchers
C) cash bo%B small denomination bills
)) petty cash undB procurement cards
!nswer* (
+age ,e* -9.
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 2asy
!!CS(* !nalytic
=8) ! surprise count o an imprest petty cash und should ind the total o EEEEEEEE equal to the amount
authori;ed or the und.
!) cash and credit memos
() cash and &ouchers
C) cash
)) cash and chec#s
!nswer* (
+age ,e* -9.
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 2asy
!!CS(* !nalytic
1-
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
=1) :hat control should be put in place that assigns responsibility or 2CT payments made to &endors3
!) 2ncrypt all 2CT transmissions.
() Time stamp all 2CT transactions.
C) 2stablish a control group to monitor 2CT transactions or &alidity and accuracy.
)) @umber all 2CT transactions.
!nswer* C
+age ,e* -91
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* !nalytic
=.) :hich o the ollowing threats is not speciic to the purchase requisition process o the e%penditure
cycle3
!) stoc#outs
() purchasing rom unauthori;ed &endors
C) requisitioning goods not needed
)) !ll o the abo&e are threats in the purchase requisition process.
!nswer* (
+age ,e* -88
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* !nalytic
=-) There is a symmetrical interdependence between a irm$s e%penditure cycle and its suppliers$
!) production cycle.
() re&enue cycle.
C) e%penditure cycle.
)) general ledger and reporting system.
!nswer* (
+age ,e* -<.
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* ,electi&e Thin#ing
=4) The Squishy Things Toy Company was established in 1948. It recently signed a large contract with a
chain o retail toy stores. !s a condition o the contract" the Squishy will be required to trac# and
orecast product sales by lin#ing in to the chain$s sales database. Squishy will then be responsible or
shipping products to the chain$s regional warehouses as needed. The technology that is used or
communication between Squishy and the chain is
!) &endor'managed in&entory.
() sales orce automation.
C) electronic data interchange.
)) optical character recognition.
!nswer* C
+age ,e* -<.
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
14
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
==) The management at Sad Clown +a0amas" an Internet'based wholesaler" is considering a new
in&entory control system. The current system is inadequate because it results in stoc#outs that interrupt
production and e%cess stoc#s o some materials that result in mar#downs and high carrying costs. The
new system" which will ocus on ensuring that the amounts purchased minimi;e these costs" will employ
!) a 0ust'in'time in&entory system.
() the economic order quantity.
C) a reorder point.
)) materials requirements planning.
!nswer* (
+age ,e* -<8
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* ,electi&e Thin#ing
=4) The management at Sad Clown +a0amas" an Internet'based wholesaler" is considering a new
in&entory control system. The current system is inadequate because it results in stoc#outs that interrupt
production and e%cess stoc#s o some materials that result in mar#downs and high carrying costs. The
new system" which will ocus on ensuring that orders are placed with suicient lead time to pre&ent
stoc#outs" will employ
!) a 0ust'in'time in&entory system.
() the economic order quantity.
C) a reorder point.
)) materials requirements planning.
!nswer* C
+age ,e* -<8
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* ,electi&e Thin#ing
=<) The management at Sad Clown +a0amas" an Internet'based wholesaler" is considering a new
in&entory control system. The current system is inadequate because it results in stoc#outs that interrupt
production and e%cess stoc#s o some materials that result in mar#downs and high carrying costs. The
new system" which will ocus on orecasting demand or Sad Clown$s products" will employ
!) a 0ust'in'time in&entory system.
() the economic order quantity.
C) a reorder point.
)) materials requirements planning.
!nswer* )
+age ,e* -<8
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* ,electi&e Thin#ing
1=
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
=8) The management at Sad Clown +a0amas" an Internet'based wholesaler" is considering a new
in&entory control system. The current system is inadequate because it results in stoc#outs that interrupt
production and e%cess stoc#s o some materials that result in mar#downs and high carrying costs. The
new system" which will ocus on reducing or completely eliminating carrying costs" will employ
!) a 0ust'in'time in&entory system.
() the economic order quantity.
C) a reorder point.
)) materials requirements planning.
!nswer* !
+age ,e* -<8
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* ,electi&e Thin#ing
=9) (ob Chum is the sales manager at Colding Squid Technologies. !t lunch with the company C2/" he
proudly announced that he had negotiated a?n) EEEEEEEE with a client that deined a long'term
commitment to buy components rom Colding Squid.
!) purchase order
() blan#et purchase order
C) e&aluated receipt settlement
)) &oucher
!nswer* (
+age ,e* -81
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
48) (ob Chum is the sales manager at Colding Squid Technologies. !t lunch with the company C2/" he
proudly announced that he had recei&ed a EEEEEEEE rom a client to buy a large quantity o components
rom Colding Squid.
!) purchase order
() blan#et purchase order
C) &oucher
)) purchase requisition
!nswer* !
+age ,e* -81
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
14
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
41) (ob Chum is the sales manager at Colding Squid Technologies. !t lunch with the company C2/" he
complained that a recent shipment rom a &endor had been unsatisactory and so had to be returned. That
required the purchasing manager to send a EEEEEEEE to the supplier.
!) purchase order
() blan#et purchase order
C) recei&ing report
)) debit memo
!nswer* )
+age ,e* -8=
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
4.) To minimi;e the number o chec#s that need to be written to pay &endor in&oices a company should
use a
!) &oucher system.
() 0ust'in'time in&entory system.
C) non&oucher system.
)) e&aluated receipt settlement system.
!nswer* !
+age ,e* -8<
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
4-) 2&aluated receipt settlement increases eiciency by
!) eliminating the need or recei&ing reports.
() eliminating the need or &endor in&oices.
C) eliminating the need or purchase orders.
)) eliminating the need to prepare and mail chec#s.
!nswer* (
+age ,e* -88
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
44) In the e%penditure cycle" Cinancial 2lectronic )ata Interchange ?C2)I) increases eiciency by
!) eliminating the need or recei&ing reports.
() eliminating the need or &endor in&oices.
C) eliminating the need or purchase orders.
)) eliminating the need to prepare and mail chec#s.
!nswer* )
+age ,e* -98
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 2asy
!!CS(* !nalytic
1<
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
4=) +rocurement cards dier rom corporate credit cards in which o the ollowing ways3
!) Credit limits can be set or procurement cards" but not corporate credit cards.
() Credit cards can be used to ma#e purchases without an e%plicit sign o by super&isors" but
procurement cards require a sign o.
C) +rocurement cards can only be used with appro&ed &endors" but credit cards can be used anywhere.
)) +rocurement card in&oices are sent separately or each card" whereas corporate credit cards are
consolidated into a single in&oice.
!nswer* C
+age ,e* -89
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
44) The purchasing manager at Colding Squid Technologies has responsibility or re&iewing and
authori;ing purchase orders. 9e also re&iews recei&ing reports" appro&es or corrects them" and
authori;es the cashier to pay &endor in&oices. :hich o the ollowing would correct control wea#nesses"
i any" related to these acti&ities3
!) Dendor in&oices should be re&iewed by the purchasing manager to ensure that they are correct.
() !ccounts payable should reconcile purchase orders" recei&ing reports" and in&oices.
C) Dendor in&oices should be re&iewed by accounts recei&able and then cancelled when paid.
)) Controls are adequate under the current system.
!nswer* (
+age ,e* -8<
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* !nalytic
4<) The purchasing manager at Colding Squid Technologies has responsibility or re&iewing and
authori;ing purchase orders. ,ecei&ing reports are prepared by shipping and recei&ing based on the
rele&ant purchase order?s). +urchase orders" recei&ing reports" and &endor in&oices are reconciled by
accounts payable" which authori;es payment. :hich o the ollowing would correct control wea#nesses"
i any" related to these acti&ities3
!) Dendor in&oices should be re&iewed by the purchasing manager to ensure that they are correct.
() !ccounts payable should authori;e purchase orders.
C) ,ecei&ing reports should be re&iewed and corrected by the purchasing manager.
)) Controls are adequate under the current system.
!nswer* )
+age ,e* -8<
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* !nalytic
18
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
48) The recei&ing cler# at Colding Squid Technologies e%amines incoming shipments and reconciles
their contents with the rele&ant purchase orders. ! recei&ing report is then sent to accounts recei&able
and the &endor$s in&oice is appro&ed or payment. :hich o the ollowing would correct control
wea#nesses" i any" related to these acti&ities3
!) The in&oice should be appro&ed or payment by the shipping cler# ater the purchase order and
recei&ing report are reconciled.
() !ccounts payable should reconcile the purchase order and the recei&ing report.
C) In&oices" purchase orders" and recei&ing reports should be reconciled by the recei&ing cler#.
)) Controls are adequate under the current system.
!nswer* (
+age ,e* -8<
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* !nalytic
49) The recei&ing cler# at Colding Squid Technologies e%amines incoming shipments and chec#s their
purchase order numbers. ! recei&ing report is then sent to accounts payable" where it is reconciled with
the rele&ant purchase orders and in&oices and payment is authori;ed. :hich o the ollowing would
correct control wea#nesses" i any" related to these acti&ities3
!) Dendor in&oices should be appro&ed or payment by the shipping cler# ater the purchase order and
recei&ing report are reconciled.
() Dendor in&oices should be appro&ed or payment by the purchasing manager.
C) +urchase orders and recei&ing reports should be reconciled by the purchasing manager.
)) Controls are adequate under the current system.
!nswer* )
+age ,e* -8<
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* !nalytic
<8) :hich o the controls below would be least eecti&e to pre&ent ordering goods at higher than
mar#et prices3
!) Dariance analysis o actual e%penses to budgeted e%penses
() Cor high'dollar goods" solicit competiti&e bids rom possible &endors
C) /nly place orders with &endors on an appro&ed &endor list
)) Crequent re&iew o" and update to" &endor price lists stored in the !IS
!nswer* !
+age ,e* -8.
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* ,electi&e Thin#ing
19
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
<1) The document below would be #nown as what by !lpha /mega 2lectronics3
!) ,ecei&ing report
() +urchase order
C) +urchase requisition
)) +ac#ing slip
!nswer* !
+age ,e* -84
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* ,electi&e Thin#ing
<.) :hich o the ollowing would be the best control to pre&ent recei&ing department employees rom
stealing in&entory and claiming the ordered quantity wasn$t recei&ed rom the &endor3
!) ,econcile quantity on pac#ing slip to physical count when accepting deli&ery.
() ,estrict physical access to the recei&ing area.
C) ,equire all deli&eries be made at the recei&ing area.
)) ,equire dual signatures on the mo&e tic#et when recei&ing deli&ers the in&entory to the warehouse.
!nswer* !
+age ,e* -84
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* ,electi&e Thin#ing
.8
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
<-) )eine and describe the 2/> approach to in&entory management.
!nswer* 2/> ?economic order quantity) is the traditional in&entory control method to maintain
suicient in&entory le&els so production can continue without interruption. 2/> should ta#e into
account a situation where in&entory use is greater than e%pected. 2/> calculates the optimal order si;e
to minimi;e the sum o ordering" carrying" and stoc#out costs. /rdering costs all e%penses associated
with processing purchasing transactions. Carrying costs costs associated with holding in&entory.
Stoc#out costs costs rom in&entory shortages" such as lost sales or production costs.
+age ,e* -<8
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
<4) )iscuss the dierences between 2/>" 5,+" and AIT.
!nswer* 2conomic /rder >uantity ?2/>) is the traditional approach to managing in&entory. 2/> is
used to ind the optimal order si;e. /rdering costs" carrying costs" and stoc#out costs are considered in
inding the 2/>. The 5,+ ?5aterials ,equirements +lanning) in&entory method see#s to reduce
in&entory le&els by scheduling production" based on estimated sales" rather than by estimating needs
?which 2/> does). ! 0ust'in'time in&entory system ?or AIT) attempts to minimi;e" i not totally
eliminate" both carrying and stoc#out costs through the requent deli&ery o small amounts o materials"
parts" and supplies when they are needed. AIT does not attempt to estimate needs or schedule production
based on estimated sales" as it is based on customer demand at a gi&en time. ! AIT system almost
eliminates inished goods in&entory.
+age ,e* -<8
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * )iicult
!!CS(* !nalytic
<=) a) :hat is the ma0or cost dri&er in the purchasing unction3 b) )escribe how inormation technology
can be used to control this cost dri&er.
!nswer* a) The ma0or cost dri&er in the purchasing unction is the number o purchase orders
processed. b) The number o purchase orders can be reduced or streamlined by* 2lectronic data
interchange ?2)I) or transmitting purchase orders to &endors. 6se procurement cards or small dollar
and small quantity purchases o non'in&entory items. ,educe clerical costs by using the Internet to
perorm certain purchasing unctions. 6se &endor'managed in&entory programs to reduce purchasing
and in&entory costs. Implement re&erse auctions and pre'award audits.
+age ,e* -8." -89
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
.1
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
<4) 2%plain what is meant by the e%penditure cycle as a Gmirror imageG o the re&enue cycle.
!nswer* The e%penditure cycle has been called a Gmirror imageG o the re&enue cycle because the
acti&ities o the e%penditure cycle are the opposite" or GrelectionG o se&eral acti&ities ound in the
re&enue cycle. Cor e%ample" the order goods acti&ity generates a purchase order" which ser&es as
customer input to the sales order entry process. The recei&e goods acti&ity handles the goods sent &ia the
supplier$s shipping unction. The pay or goods acti&ity generates the payments that are processed by the
supplier$s cash collection acti&ity. This mirror image also means that ma0or technological impro&ements
in the e%penditure cycle may bring about complementary impro&ements in suppliers$ re&enue cycle as
well.
+age ,e* -<.'-<-
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * )iicult
!!CS(* ,electi&e Thin#ing
<<) Identiy possible problems associated with recei&ing goods and appropriate actions in response to
the problems.
!nswer* :hen a shipment o goods arri&es" the quantity o goods recei&ed may not be the same as the
quantity orderedB the goods may ha&e been damaged in shipment and thereore are not suitable or useB
and" goods may be recei&ed that are inerior in quality and ail an inspection. :hene&er any o these
problems occur" the purchasing department should deal with the &endor and issue a debit memo to
record an ad0ustment to the order. The &endor should then issue a credit memo in ac#nowledgment o
the problem and the pending ad0ustment.
+age ,e* -8=
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* !nalytic
<8) 9ow can inormation technology be used to impro&e the &endor in&oice appro&al process3
!nswer* 2)I eliminates the need to enter in&oice data and the matching o payment documents all o
this can be done using computers and networ# technologies. Technology can eliminate the need or
&endor in&oices by appro&ing payment upon receipt o the goods. Imaging systems can eliminate paper
low" and uni&ersal languages such as H51 can pro&ide a paperless means o recei&ing and storing
&endor in&oices. 6se o procurement cards" credit cards" and electronic e%pense orms can impro&e the
eiciency o non'in&entory purchases. 2,S" which is in&oiceless" is a means to replace the traditional
three'matching process ?&endor in&oice" recei&ing report and purchase order) with a two'way match o
the purchase order and recei&ing report.
+age ,e* -8<'-89
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
..
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
<9) 6nder what conditions is 5,+ more suitable than AIT and &ice &ersa3
!nswer* 5,+ systems schedule production based on estimated sales" and AIT systems schedule
production based on customer demand. The choice between these two systems is based on the types o
products a company sells. Cor e%ample" products that ha&e predictable patterns o demand and a long
lie cycle are more suitable or 5,+ systems. In this case" sales can be orecast with greater accuracy.
Con&ersely" i the product has an unpredictable pattern o demand and a shorter lie cycle" then a AIT
system is more suitable. AIT is able to adapt better to continuously changing production le&els.
+age ,e* -<9
/b0ecti&e* 1earning /b0ecti&e 1
)iiculty * 5oderate
!!CS(* !nalytic
88) In the e%penditure cycle" the ma0ority o payments made are by chec#. :hat are some control issues
related to payment o &endors by chec#3
!nswer* Iey control problems in the area o payment by chec# can gi&e rise to raudulent acti&ity.
Craudulent disbursements made by chec# to ictitious suppliers are one o the most common types o
raud. Control o&er chec#s can be strengthened in a number o ways. Cirst" all chec#s should be
sequentially pre'numbered and #ept under loc# and #ey until use. The internal auditor should randomly
audit the supply o unused chec#s and &eriy that none are missing. 6se o the &oucher system will also
pro&ide control o&er paying a GphantomG supplier" since se&eral supporting documents must be present
in the &oucher pac#et in order to ha&e a chec# issued. The cashier andJor treasurer should be the only
parties authori;ed to sign chec#s. Two signatures should be required on all chec#s in e%cess o a
predetermined dollar amount to pro&ide independent re&iew o large e%penditures. !lso" signed chec#s
should not be returned to accounts payable" but should be mailed by the cashier or treasurer. :hen a
chec# is issued" all documents in the &oucher pac#age should be cancelled so that the &oucher cannot be
resubmitted or payment. To pro&ide another independent re&iew o chec#ing account acti&ity" someone
not connected with either accounts payable or the treasurer$s oice should reconcile all ban# accounts.
To help circum&ent chec# alteration and orgery" chec# protection machines should be used to write the
dollar amount o the chec# as well as the date. The paper the chec# is printed on should ha&e some
special watermar# or identiying mar# that is readable at a certain angle as well.
+age ,e* -9.
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* !nalytic
.-
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
81) Identiy ten threats and applicable control procedures in the e%penditure cycle.
!nswer* !nswers can include the ollowing inormation*
1* Stoc#'outs Controls* In&entory control systemB accurate perpetual in&entoryB and &endor
perormance analysis is needed to pre&ent this problem
.* ,equesting goods not needed Controls* ,e&iew and appro&al by super&isorsB use o pre'numbered
requisition ormsB and restricted access to blan# purchase orders
-* +urchasing goods at inlated prices Controls* Competiti&e bidding and proper super&isionB
appro&ed purchase ordersB and price list consultations are needed to pre&ent this problem
4* +urchasing goods o inerior quality Controls* 6se e%perienced buyers who #now good &endorsB
re&iew purchase ordersB and incorporate appro&ed &endor list into ormal procedures
=* +urchasing rom unauthori;ed &endors Control* +re'numbered purchase orders should be
appro&edB restrict access to appro&ed &endor list and ha&e procedures in place or any change to the list
4* Iic#bac#s paid to buyers to inluence their decisions Controls* Clear conlict o interest policy
prohibiting the acceptance o any git rom &endorsB disclosure o inancial interest policy or purchasing
agentsB and &endor audits
<* ,ecei&ing unordered goods Controls* ,ecei&ing department must re0ect any goods or which there
is no appro&ed purchase order
8* 2rrors in counting goods recei&ed Controls* 6se GblindG +./. copies to orce recei&ing personnel to
actually count goodsB pro&ide incenti&es or counting goods
9* Thet o in&entory Controls* Secure in&entory storage locationsB ma#e transers o in&entory with
proper appro&al and documentationB do periodic physical count and reconciliation with recorded
amounts
18* 2rrors in &endor in&oices Controls* In&oice accuracy should be &eriied and compared to +./.s
and recei&ing report data
11* +aying or goods not recei&ed Controls* Doucher pac#age and original in&oice should be
necessary or payments
1.* Cailure to ta#e a&ailable purchase discounts Controls* Cile appro&ed in&oices by due dateB trac#
in&oices by due dateB use a cash budget to plan or cash needs
1-* +aying same in&oice twice Controls* In&oices should be appro&ed only with a ull &oucher
pac#age and paid ones should be canceled so they cannot be used againB do not pay in&oices mar#ed
G)uplicateG or GCopyG
14* ,ecording and posting errors or purchases and payments Controls* )ata entry controls" and
periodic reconciliation o subsidiary ledger with general ledger control account
1=* 5isappropriation o cash by paying ictitious &endors and alteration o chec#s Controls* ,estrict
access to cash" blan# chec#s" and chec# signing machineB use chec# protection" pre'numbered chec#s"
and imprinted amounts on chec#s to cut down on orgery and raudB use petty cash und or small
e%penditures onlyB ha&e proper segregation o duties and independent ban# reconciliation unction
14* Thet associated with 2CT use Controls* !ccess controls to the systemB encryption o
transmissionsB time'stamp and number transmissionsB control group should monitor all 2CT acti&ity
1<* 1oss o data Controls* 6se ile labels" bac# up o all data iles regularlyB and" use access controls
18* +oor perormance Controls* +reparation and re&iew o perormance reports
+age ,e* -<4'-<<
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* !nalytic
.4
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all
8.) :hat types o decision'ma#ing and strategic inormation should the !IS pro&ide in the e%penditure
cycle3
!nswer* The !IS should pro&ide decision ma#ing inormation to* )etermine when and how much
additional in&entory to order. Select the appropriate &endors rom whom to order. Deriy the accuracy o
&endor in&oices. )ecide whether purchase discounts should be ta#en. 5onitor cash low needs to pay
outstanding obligations. !IS should also pro&ide the ollowing strategic and perormance e&aluation
inormation on* 2iciency and eecti&eness o the purchasing department. !nalysis o &endor
perormance such as on'time deli&ery" quality" etc. Time ta#en to mo&e goods rom the recei&ing doc#
into production. +ercentage o purchase discounts ta#en.
+age ,e* -<.
/b0ecti&e* 1earning /b0ecti&e .
)iiculty * 5oderate
!!CS(* !nalytic
8-) 9ow can using ,CI) tags or bar codes on goods or products pro&ide signiicant beneit in the
e%penditure cycle3
!nswer* ,CI) tags and bar codes can signiicantly impro&e the process o recei&ing goods rom
suppliers or se&eral reasons. Cirst" they can easily be scanned electronically. 2lectronically capturing
the unique number o a product not only pro&ides identiication and quantity data about the productB it
can also pro&ide speciic production inormation such as date and time o manuacture" production run
inormation" etc. 2lectronically encoding such inormation into an integrated !IS pro&ides up'to'the'
minute in&entory counts" as well as counts o units sold" and returns or use in a perpetual in&entory
system. !lso" both &endor and customers can read tags and bar codes" and certain ormats are uni&ersal
in nature. This allows goods to be sold &irtually anywhere in the world" allowing or easier global
mar#eting eorts to be made by businesses. It also eliminates the need or human data entry and reduces
the ris# o stoc#outs.
+age ,e* -<4
/b0ecti&e* 1earning /b0ecti&e -
)iiculty * 5oderate
!!CS(* !nalytic
.=
Copyright 7 .81. +earson 2ducation" Inc. publishing as +rentice 9all