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B Com Exam  >  B Com Tests  >  Auditing and Secretarial Practice  >  Test: Review of Internal Control- 1 - B Com MCQ

Test: Review of Internal Control- 1 - B Com MCQ


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10 Questions MCQ Test Auditing and Secretarial Practice - Test: Review of Internal Control- 1

Test: Review of Internal Control- 1 for B Com 2024 is part of Auditing and Secretarial Practice preparation. The Test: Review of Internal Control- 1 questions and answers have been prepared according to the B Com exam syllabus.The Test: Review of Internal Control- 1 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Review of Internal Control- 1 below.
Solutions of Test: Review of Internal Control- 1 questions in English are available as part of our Auditing and Secretarial Practice for B Com & Test: Review of Internal Control- 1 solutions in Hindi for Auditing and Secretarial Practice course. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free. Attempt Test: Review of Internal Control- 1 | 10 questions in 10 minutes | Mock test for B Com preparation | Free important questions MCQ to study Auditing and Secretarial Practice for B Com Exam | Download free PDF with solutions
Test: Review of Internal Control- 1 - Question 1
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What is the purpose of reviewing and reconciling financial records in the purchasing process?

Detailed Solution for Test: Review of Internal Control- 1 - Question 1
Reviewing and reconciling financial records in the purchasing process is essential to confirm the accuracy of recorded transactions. This step helps identify any discrepancies, improper charges, or errors in the financial documentation, ensuring that the records reflect the actual activities and expenses related to purchasing operations.
Test: Review of Internal Control- 1 - Question 2
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Which aspect is crucial to establish effective segregation of duties in the purchasing operations of an organization?

Detailed Solution for Test: Review of Internal Control- 1 - Question 2
Effective segregation of duties involves assigning different buying functions to separate individuals. This helps prevent unauthorized or unnecessary purchases, improper charges, and maintains a system of checks and balances. No single person should have complete control over all buying activities to reduce the risk of errors or fraud.
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Test: Review of Internal Control- 1 - Question 3
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What is one of the primary objectives of reviewing the internal control system over purchasing operations?

Detailed Solution for Test: Review of Internal Control- 1 - Question 3
One of the primary objectives of reviewing the internal control system over purchasing operations is to ensure that procurement practices and procedures are documented and in compliance with central and state laws. This includes verifying whether transactions are properly authorized, recorded, and whether there's segregation of duties. The review helps identify potential risks, strengthen accountability, and ensure legal compliance in the purchasing process.
Test: Review of Internal Control- 1 - Question 4
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What role does a Management Information System (MIS) play in an organization?
Detailed Solution for Test: Review of Internal Control- 1 - Question 4
A Management Information System (MIS) is designed to provide information to the management of an organization to support timely and effective decision-making. It processes data into meaningful information that aids in coordinating between departments, referencing, accessing relevant data, and improving organizational techniques for better management.
Test: Review of Internal Control- 1 - Question 5
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Which of the following is a key objective when reviewing the Management Information System (MIS) of an organization?
Detailed Solution for Test: Review of Internal Control- 1 - Question 5
One of the key objectives of reviewing the Management Information System (MIS) is to evaluate whether the MIS applications are providing users with timely, accurate, consistent, complete, and relevant information. The effectiveness of MIS is determined by its ability to deliver accurate and relevant data to support decision-making.
Test: Review of Internal Control- 1 - Question 6
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What is a crucial consideration when reviewing the Management Information System (MIS) of an organization?
Detailed Solution for Test: Review of Internal Control- 1 - Question 6
When reviewing the MIS of an organization, it's crucial to understand the components that make up the system and identify the users who interact with it. This understanding helps in assessing whether the MIS effectively meets the organization's needs and supports various departments in making informed decisions.
Test: Review of Internal Control- 1 - Question 7
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What is a critical step to ensure proper segregation of duties in purchasing operations?
Detailed Solution for Test: Review of Internal Control- 1 - Question 7
Proper segregation of duties involves restricting access to inventory to only appropriate staff members. This prevents unauthorized access and helps maintain control over inventory and purchases. Separating responsibilities and tasks among different individuals reduces the risk of errors and fraud.
Test: Review of Internal Control- 1 - Question 8
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What does the term "review and reconciliation" involve in the context of purchasing operations?
Detailed Solution for Test: Review of Internal Control- 1 - Question 8
In the context of purchasing operations, "review and reconciliation" involves comparing supplier invoices to purchase orders, verifying the goods and services received, and ensuring that the charges and quantities align with the documentation. This step helps prevent improper charges, confirm the accuracy of transactions, and maintain control over the purchasing process.
Test: Review of Internal Control- 1 - Question 9
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What is the main purpose of conducting training in the Management Information System (MIS)?
Detailed Solution for Test: Review of Internal Control- 1 - Question 9
The main purpose of conducting training in the Management Information System (MIS) is to enhance employees' understanding of how to use the system effectively. Training helps employees navigate the system, generate useful reports, and make informed decisions based on the information provided by the MIS.
Test: Review of Internal Control- 1 - Question 10
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What is the significance of periodically reconciling operating ledgers in the purchasing process?
Detailed Solution for Test: Review of Internal Control- 1 - Question 10
Periodically reconciling operating ledgers in the purchasing process is essential to verify the accuracy and timeliness of expenses. This step ensures that financial records are aligned with the actual transactions and expenses, and any discrepancies or errors can be identified and rectified in a timely manner.
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