Purchase Procedure (in Cost and Works Accounting 1) MCQs set 2

Cost and Works Accounting 1

Purchase Procedure [set-2]

26. __________ is a written order directing the contractor to make changes

according to the provisions of the contract documents.
A. Change order / purchase order amendment

B. Contract order modifications

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C. Contractor claim
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D. Owner directive
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Answer: A a
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27. __________ defines when the work is ready for or is being used for the
purpose intended and is so certified. c
A. Final completion
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B. Substantial completion

C. Final acceptance

D. Mechanical completion

Answer: B

28. __________ is a request for interim stoppage of work due to non

conformance, funding or technical considerations.
A. Bid protest

B. Stop work order

C. Notice to proceed

D. Supplier default notice

Answer: B

29. The process that may be used by an unsuccessful supplier to seek

remedy for a non award of work is:
A. Bid protest

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 Purchase Procedure (in Cost and Works Accounting 1) MCQs set 2

B. Stop work order

C. Back charge

D. Contract dispute

Answer: A

30. The __________ specification describes, defines or specifies the goods

/ services to be supplied. Performance
A. Functional

B. Technical
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C. Bid
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D. General Requirements
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Answer: C

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31. The Bid Evaluation process is characterized by all of the following
activities except?
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A. Evaluation of suppliers financial resources

B. Ability to comply with technical specifications

C. Delivery schedule and cost factors

D. Competitors method of sourcing

Answer: D

32. Which is not a consideration in a make or buy decision?

A. Cost factors

B. Sales volume

C. Existence of sufficient administrative / technical personnel

D. Political and social factors with the organization

Answer: B

33. There are four methods of government procurement. Which is not one
of these methods?
A. Assistance

B. Sealed bidding

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 Purchase Procedure (in Cost and Works Accounting 1) MCQs set 2

C. Competitive proposals

D. Acquisition

Answer: D

34. A purchasing operation does not contain this classification of work?

A. Management

B. Buying

C. Follow-up and expedition

D. Marketing
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Answer: D .c
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35. __________ is a register of suppliers
services as specified.
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A. Procurement invitation
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B. Bid list M
C. Resource identification

D. Supplier's rankings

Answer: B

36. __________ is a formal invitation to submit a price for goods and / or

services as specified.
A. Request for quotation

B. Bid response

C. Intention to bid

D. Request for proposal

Answer: D

37. Which contract type should be used by the owner on a high risk
project?
A. Cost plus percentage of cost

B. Cost plus incentive fee

C. Lump sum

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 Purchase Procedure (in Cost and Works Accounting 1) MCQs set 2

D. Fixed price plus incentive fee

Answer: C

38. Cost reimbursable contracts are equivalent to:

A. Progress payment contracts

B. Extra work order contracts

C. Cost plus contracts

D. Fixed price contracts

Answer: C
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39. Fixed price and incentive type contracts place responsibility for
performance and financial risks associated with delay or non-performance
on the: a
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A. Contractor
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B. Owner

C. Lending institution
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D. Project manager

Answer: A

40. __________ is based on information gathered and analyzed about

demand and supply. this forecast provides a prediction of short and long
term prices and the underlying reasons for those trends.
A. Sales forecast

B. Consumer price index

C. Production forecast

D. Price forecast

Answer: A

41. The contract is signed at the end of the:

A. Pre-award phase

B. Award phase

C. Post-award phase

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 Purchase Procedure (in Cost and Works Accounting 1) MCQs set 2

D. Award cycle

Answer: D

42. Definitive contract terms are spelled out in the:

A. Pre-award phase

B. Award phase

C. Post-award phase

D. Purchasing phase

Answer: C
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43. A bilateral RFP is preferred to an invitation to bid when:
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A. Supplier and terms are specified
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B. The product or service is relatively low value and readily available

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C. The product or service has high value and is unique
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D. The product or service has high value, but is easy to obtain

Answer: C

44. Which one of the following is not included in the 5 R in purchasing?

A. Quality

B. Quantity

C. Price

D. None of these

Answer: D

45. Which of the following is not a function of purchasing management?

A. Selecting the source

B. Placement of purchase order

C. Physical controls of material

D. None of these

Answer: D

46. The purchase order form is designed by

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 Purchase Procedure (in Cost and Works Accounting 1) MCQs set 2

A. Materials Manager

B. Purchase Manager

C. Marketing Manager

D. None of them

Answer: B

47. The objective(s) of forward purchasing is / are

A. To guard against interruption in supply

B. To economize the use of storage space

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C. To guard against the future rise in price .c
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D. All of these
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Answer: A
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48. JIT contributed to the c
A. Reduced inventories and WIP
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B. Reduced suppliers and vendors

C. Reduced information flows

D. Reduced manpower planning

Answer: A

49. “Hedging” technique is used

A. When there is an organized commodity market

B. Where large quantities of a particular commodity are bought and sold

C. Both (a) and (b)

D. None of these

Answer: C

50. Purchase Budget has an impact on

A. Profitability of the company

B. Materials Budget of the company

C. Bill of materials

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 Purchase Procedure (in Cost and Works Accounting 1) MCQs set 2

D. All of these

Answer: D

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 Purchase Procedure (in Cost and Works Accounting 1) MCQs set 2

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