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Quizzes > Quizzes for Business > Finance

Take the Purchasing Card Policy Compliance Quiz

Assess Your Purchasing Card Policy Knowledge

Difficulty: Moderate
Questions: 20
Learning OutcomesStudy Material
Colorful paper art design for Purchasing Card Policy Compliance Quiz

Ready to sharpen your purchasing card policy compliance skills? This compliance quiz is perfect for finance professionals, auditors, and team members responsible for corporate purchasing card management. In just a few minutes, you'll test your understanding of policy guidelines and raise your compliance game. Feel free to customize any question in our editor to suit your training needs. Explore related Employee Policy and Compliance Quiz and Visual Card Identification Test, or browse all quizzes for more practice.

Which of the following is a key requirement of a purchasing card policy?
Allowing unlimited spending without oversight
Reconciling statements within the required timeframe
Submitting expenses annually
Using the card for personal expenses under $50
Reconciling statements promptly ensures that all transactions are reviewed and tracked according to policy. Timely reconciliation helps identify unauthorized or incorrect charges. Without this requirement, control over spending would be lost.
What documentation is typically required for each purchasing card transaction?
Cardholder's personal memo
Copy of the monthly bank statement only
Vendor's promotional brochure
Original itemized receipt
An original itemized receipt is required to verify the details and legitimacy of each transaction. It shows date, vendor, items purchased, and amounts. Other documents are insufficient for audit and reconciliation.
Which of these purchases is generally prohibited under a standard purchasing card policy?
Personal household groceries
Office cleaning services
Authorized software licenses
Office supplies
Personal household groceries are unrelated to business needs and violate the policy's prohibition on personal expenses. Purchasing cards are only for legitimate business expenses. All personal items must be paid for out-of-pocket.
Who is primarily responsible for reviewing and reconciling purchasing card statements?
The cardholder
Internal audit only
Accounts receivable department
The external vendor
The cardholder is responsible for reviewing and reconciling their own statements to ensure accuracy and compliance. This accountability helps catch errors and policy violations early. It also maintains proper spending records.
Within how many days must receipts typically be submitted for compliance review after the statement date?
7 days
15 days
60 days
30 days
Most policies require receipts to be submitted within 30 days of the statement date to allow timely reconciliation. This timeframe balances operational efficiency with thorough review. Delays beyond this period can complicate audits.
A cardholder forgot to obtain a receipt for a $75 office supply purchase. What should they do to comply with policy?
Submit a missing receipt form with a detailed explanation
Estimate the amount and code it without documentation
Provide only the bank statement for proof
Omit the transaction from the reconciliation report
Filing a missing receipt form with explanation documents the reason for no receipt and maintains audit trails. Policies typically require this as a remedy for missing documentation. Other actions fail to meet compliance standards.
During reconciliation, a purchase is found coded to the wrong department code. What is the best practice?
Notify the finance department to correct the coding
Ignore it if the amount is small
Delete the transaction and re-enter it later
Change the personal copy of the record only
Notifying finance ensures the official records are corrected and remain accurate. Proper coding is essential for budgeting and reporting. Ignoring or working only on personal records fails to correct the master accounting data.
Which expense code should be used for a lunch meeting with an external vendor?
Office Supplies
Meals and Entertainment
Capital Expenditure
Travel Expenses
A lunch meeting with an external vendor is categorized under Meals and Entertainment. This category distinguishes client-related meal costs from other business expenses. Accurate coding ensures proper accounting treatment.
Splitting transactions to stay under the single-transaction limit is considered what?
A required audit procedure
A policy violation
An acceptable workaround with manager approval
A recommended best practice
Splitting transactions to avoid limits undermines the policy's control mechanisms and is a violation. Policies prohibit this behavior to maintain spending visibility. Other options mischaracterize the practice.
An employee uses the card for a personal item by mistake. What is the correct remedy?
Reimburse the organization promptly for the personal portion
Ask the vendor to reverse the charge
Ignore it if under $100
Offset it with another business purchase
Reimbursing the organization quickly restores funds and maintains compliance. This approach corrects the misuse and keeps records accurate. Other actions do not properly address the policy breach.
A vendor issues a promotional credit on a cardholder's account. How should this be recorded?
Donate the credit to the department fund
Record it as separate income
Ignore the credit
Reduce the original expense amount by the credit
Applying the credit to reduce the related expense maintains accurate net spending records. It ensures financial statements reflect true cost. Treating it as income or ignoring it misstates expenses.
Which of these is a red flag indicating a possible policy violation?
Using the card for large approved capital purchases
Reconciliation completed on time
Multiple transactions just below the single-transaction limit
Producing itemized receipts for every transaction
Repeated transactions just below the limit suggest intentional splitting to avoid policy controls. This pattern often triggers an audit review. Other behaviors indicate compliance rather than violation.
When is the best time for a cardholder to update transaction coding in the system?
At the end of the fiscal year
Only during the annual audit
Whenever the monthly statement arrives
At the time of entering or matching the transaction
Updating coding immediately ensures accurate, real-time records and simplifies reconciliation. Delaying coding increases risk of errors. Prompt entry supports clear audit trails.
What documentation is essential to justify a client entertainment expense?
Attendee list and business purpose description
Cardholder's personal travel diary
Bank statement only
Vendor's generic receipt
A detailed list of attendees and the business purpose provides context and justification under policy. It demonstrates the expense is business-related. Other documents do not fully substantiate the business need.
A cardholder spends $600 on a client entertainment event where the policy limit is $500 per event. What is the correct action?
Obtain retroactive manager approval and reallocate the $100 overage
Split the bill into two transactions of $300 each
Have the vendor refund $100 directly to the client
Capitalize the entire $600 as an asset
Exceeding policy limits requires documented manager approval and proper accounting of the overage. Splitting transactions is a violation and other options misclassify the expense. Approval ensures policy compliance.
A software subscription charge appears on the statement but the policy does not list software. What documentation is needed to validate it?
Cardholder's personal note
Vendor's marketing brochure
Email approval from the IT department
Copy of the bank statement only
IT approval confirms the subscription aligns with organizational needs and policy for software purchases. It provides formal authorization. Other documents lack validation of business necessity.
A transaction was coded to the wrong GL account and discovered only during an audit. What corrective process should be followed?
Adjust the next month's statement balance
Submit a journal entry with supporting documentation
Ask the vendor to issue a credit
Ignore it if the amount is immaterial
Correcting via a journal entry ensures the general ledger reflects accurate account balances and maintains an audit trail. Ignoring or delaying correction misstates financial records. Vendor credit does not fix the coding error.
The policy allows emergency purchases to exceed limits with verbal approval. What evidence is required?
Vendor's quick invoice
Only a note in the cardholder's file
Written justification and retroactive manager approval
No documentation if under $50
Documenting emergencies with a written rationale and manager sign-off preserves control and auditability. Verbal approvals alone are insufficient. Policy mandates formal evidence for exceptions.
What is the best method to ensure compliance across an entire department?
Rely solely on self-certification by cardholders
Implement random audits and periodic training sessions
Increase transaction limits for all users
Disable all cards and switch to cash reimbursements
Combining random audits with regular training reinforces policy awareness and deters violations. It provides both preventative and detective controls. Other options either reduce oversight or encourage noncompliance.
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Learning Outcomes

  1. Identify key requirements of purchasing card policies
  2. Analyse expense documentation for compliance
  3. Evaluate card usage scenarios against policy guidelines
  4. Demonstrate proper transaction coding procedures
  5. Apply best practices to avoid common compliance violations

Cheat Sheet

  1. Understand the Purpose of Purchasing Cards (PCards) - PCards turn small-dollar purchases into a streamlined, efficient process by cutting red tape and speeding up vendor payments. They save time and free your team to focus on big-picture finance fun. PCard Policies in Action
  2. Recognize Common Risks Associated with PCards - Keep an eye out for misuse, slip-ups in accounting, or fraud that can sneak under the radar. Understanding these hazards lets you guard your budget like a financial superhero. Harvard PCard Overview
  3. Implement Strong Internal Controls - Set crystal-clear policies, assign roles for reconciliation, and schedule regular audits. Strong internal controls keep your card program robust, compliant, and fraud-resistant. P-Card Program Checklist
  4. Ensure Proper Documentation of Transactions - Stash original receipts, record every purchase detail, and link each expense to a clear business purpose. Solid documentation builds accountability and makes audits a breeze. P-Card Program Checklist
  5. Set Clear Spending Limits and Restrictions - Define exactly what qualifies as an allowable purchase and cap spending per card. Smart restrictions tame rogue expenses and ensure consistent compliance. P-Card Program Checklist
  6. Provide Comprehensive Training for Cardholders - Run interactive training sessions before issuing cards to explain policies, responsibilities, and best practices. Well-trained cardholders are your first line of defense against mistakes. P-Card Training Guide
  7. Monitor and Review Transactions Regularly - Review every transaction with a keen eye and set up real-time alerts to catch red flags. Consistent monitoring keeps your program agile and trustworthy. Policy Compliance Best Practice
  8. Establish Consequences for Policy Violations - Spell out the penalties for noncompliance, from warnings to card suspension or cancellation. Clear repercussions remind everyone to play by the rules. PCard Internal Controls
  9. Maintain Updated Policies and Procedures - Revisit and revise your PCard guidelines regularly to align with evolving goals and emerging risks. Fresh policies keep your program sharp, relevant, and resilient. Aligning Policy with Card Program
  10. Encourage Reporting of Misuse or Concerns - Offer an anonymous hotline or feedback channel so employees can raise red flags without fear. Open communication fosters a culture of transparency and accountability. P-Card Reporting Checklist
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