Question 1

One example of a periodic independent verification is the bank reconciliation.

Accepted Answer

A) True 
 B)False

Question 2

With the periodic inventory system,goods available for sale must be calculated before cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 3

The bonding of employees is an example of which feature of a good system of internal control?

Accepted Answer

A)  Authorization of transactions 
B)  Well-designed documents 
C)  Sound personnel policies 
D)  Periodic independent verification 
A)  Authorization of transactions 
B)  Well-designed documents 
C)  Sound personnel policies 
D)  Periodic independent verification

Question 4

Use this balance sheet and income statement to answer the following question.     The total amount of working capital of Abner Systems is

Accepted Answer

A)  $0. 
B)  $6,000. 
C)  $2,000. 
D)  $10,000. 
A)  $0. 
B)  $6,000. 
C)  $2,000. 
D)  $10,000.

Question 5

On August 1,Phillips Industries purchased $12,000 of merchandise on credit.Terms of 1/10,n/30 are extended,and Phillips makes payment on August 9.
a.In the journal provided,make Phillips's entries,assuming use of the periodic inventory system.
b.Make the entry that would have been made had payment been made on August 17.

Accepted Answer

The answer of On August 1,Phillips Industries purchased $12,000 of...

Question 6

Match each definition with the correct term below.
-Periodic inventory system

Accepted Answer

A) An inventory system in which the inventory not yet sold or on hand is counted periodically. 
B) Management's regular assessment of the quality of internal control. 
C) An account that accumulates the total cost of merchandise purchased for resale during an accounting period. 
D) The policies and procedures that management puts into place to see that its directives are carried out. 
E) The seller bears the transportation costs to the place where merchandise is delivered and title passes at the time it is delivered.
F)An inventory system in which continuous records are kept of the quantity and cost of individual items as they are bought and sold.
G)The total cost of merchandise that could be sold in an accounting period.
H)The buyer bears the shipping costs of merchandise and title passes at the time it is shipped.
I)An account that gives management a readily available measure of unsatisfactory products and dissatisfied customers.
J)Controls that limit access to assets. 
A) An inventory system in which the inventory not yet sold or on hand is counted periodically. 
B) Management's regular assessment of the quality of internal control. 
C) An account that accumulates the total cost of merchandise purchased for resale during an accounting period. 
D) The policies and procedures that management puts into place to see that its directives are carried out. 
E) The seller bears the transportation costs to the place where merchandise is delivered and title passes at the time it is delivered.
F)An inventory system in which continuous records are kept of the quantity and cost of individual items as they are bought and sold.
G)The total cost of merchandise that could be sold in an accounting period.
H)The buyer bears the shipping costs of merchandise and title passes at the time it is shipped.
I)An account that gives management a readily available measure of unsatisfactory products and dissatisfied customers.
J)Controls that limit access to assets.

Question 7

Which of the following attributes of internal control would be violated if the accounting clerk wrote checks to pay accounts payable?

Accepted Answer

A)  Adequate design of documents 
B)  Sound personnel procedures 
C)  Periodic independent verification 
D)  Separation of duties 
A)  Adequate design of documents 
B)  Sound personnel procedures 
C)  Periodic independent verification 
D)  Separation of duties

Question 8

Use this information to answer the following question.   In addition,beginning merchandise inventory was $44,000 and ending merchandise inventory was $28,000.
Net cost of purchases for the period were

Accepted Answer

A)  $154,000. 
B)  $90,000. 
C)  $114,000. 
D)  $138,000. 
A)  $154,000. 
B)  $90,000. 
C)  $114,000. 
D)  $138,000.

Question 9

Liquidity management involves planning a business's cash receipts and cash payments.

Accepted Answer

A) True 
 B)False

Question 10

The perpetual inventory system relies on a physical count of merchandise for its balance sheet amount.

Accepted Answer

A) True 
 B)False

Question 11

Use this information to answer the following question.   The current ratio is

Accepted Answer

A)  3.18. 
B)  2.75. 
C)  1.45. 
D)  .36 
A)  3.18. 
B)  2.75. 
C)  1.45. 
D)  .36

Question 12

At the end of each day,the cashier should not be the one responsible for comparing the amount on the cash register tape with the day's cash additions to the cash register.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following does not represent a sale?

Accepted Answer

A)  Merchandise placed aside for a customer who plans to come in next week and pay with cash 
B)  Purchase of merchandise by a customer who pays cash 
C)  Sale of merchandise to a customer who uses a credit card 
D)  Purchase of merchandise by a customer who uses a debit card 
A)  Merchandise placed aside for a customer who plans to come in next week and pay with cash 
B)  Purchase of merchandise by a customer who pays cash 
C)  Sale of merchandise to a customer who uses a credit card 
D)  Purchase of merchandise by a customer who uses a debit card

Question 14

Cash flow cannot be managed,but it is a natural component of business operations.

Accepted Answer

A) True 
 B)False

Question 15

A merchandising business will earn an income before income taxes of exactly $0 when

Accepted Answer

A)  net sales equals cost of goods sold. 
B)  operating expenses equal net sales. 
C)  gross margin equals operating expenses. 
D)  cost of goods sold equals gross margin. 
A)  net sales equals cost of goods sold. 
B)  operating expenses equal net sales. 
C)  gross margin equals operating expenses. 
D)  cost of goods sold equals gross margin.

Question 16

A traditional definition of internal control specifically includes all of the following features except

Accepted Answer

A)  adherence to prescribed managerial policies. 
B)  promotion of operational efficiency. 
C)  reliability of accounting data. 
D)  maintenance of a clean and safe workplace. 
A)  adherence to prescribed managerial policies. 
B)  promotion of operational efficiency. 
C)  reliability of accounting data. 
D)  maintenance of a clean and safe workplace.

Question 17

Use this information to answer the following question.   In addition,beginning merchandise inventory was $22,000 and ending merchandise inventory was $14,000.
Net sales for the period were

Accepted Answer

A)  $303,000. 
B)  $273,000. 
C)  $293,000. 
D)  $213,000. 
A)  $303,000. 
B)  $273,000. 
C)  $293,000. 
D)  $213,000.

Question 18

Assume that the sales made by Wessling Corporation for the month ended February 28,were made to customers using credit cards and totaled $5,666.Prepare one journal entry to record these sales assuming that all of the credit card companies charge Wessling Corporation a 2.5 percent discount fee.(Omit date.)Round to the nearest whole dollar.

Accepted Answer

The answer of Assume that the sales made by Wessling...

Question 19

The treasurer should prepare and sign a check only after a proper check authorization has been provided.

Accepted Answer

A) True 
 B)False

Question 20

In a purchase system,the most appropriate department to control goods upon arrival into the company is the

Accepted Answer

A)  receiving department. 
B)  treasury department. 
C)  accounting department. 
D)  requesting department. 
A)  receiving department. 
B)  treasury department. 
C)  accounting department. 
D)  requesting department.

One example of a periodic independent verification is the bank reconciliation.

With the periodic inventory system,goods available for sale must be calculated before cost of goods sold.

The bonding of employees is an example of which feature of a good system of internal control?

Use this balance sheet and income statement to answer the following question. The total amount of working capital of Abner Systems is

Match each definition with the correct term below. -Periodic inventory system

Which of the following attributes of internal control would be violated if the accounting clerk wrote checks to pay accounts payable?

Use this information to answer the following question. In addition,beginning merchandise inventory was $44,000 and ending merchandise inventory was $28,000. Net cost of purchases for the period were

Liquidity management involves planning a business's cash receipts and cash payments.

The perpetual inventory system relies on a physical count of merchandise for its balance sheet amount.

Use this information to answer the following question. The current ratio is

At the end of each day,the cashier should not be the one responsible for comparing the amount on the cash register tape with the day's cash additions to the cash register.

Which of the following does not represent a sale?

Cash flow cannot be managed,but it is a natural component of business operations.

A merchandising business will earn an income before income taxes of exactly $0 when

A traditional definition of internal control specifically includes all of the following features except

Use this information to answer the following question. In addition,beginning merchandise inventory was $22,000 and ending merchandise inventory was $14,000. Net sales for the period were

The treasurer should prepare and sign a check only after a proper check authorization has been provided.

In a purchase system,the most appropriate department to control goods upon arrival into the company is the

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters

Exam 6: The Operating Cycle and Merchandising Operations

One example of a periodic independent verification is the bank reconciliation.

With the periodic inventory system,goods available for sale must be calculated before cost of goods sold.

The bonding of employees is an example of which feature of a good system of internal control?

Use this balance sheet and income statement to answer the following question. The total amount of working capital of Abner Systems is

Match each definition with the correct term below. -Periodic inventory system

Which of the following attributes of internal control would be violated if the accounting clerk wrote checks to pay accounts payable?

Use this information to answer the following question. In addition,beginning merchandise inventory was $44,000 and ending merchandise inventory was $28,000. Net cost of purchases for the period were

Liquidity management involves planning a business's cash receipts and cash payments.

The perpetual inventory system relies on a physical count of merchandise for its balance sheet amount.

Use this information to answer the following question. The current ratio is

At the end of each day,the cashier should not be the one responsible for comparing the amount on the cash register tape with the day's cash additions to the cash register.

Which of the following does not represent a sale?

Cash flow cannot be managed,but it is a natural component of business operations.

A merchandising business will earn an income before income taxes of exactly $0 when

A traditional definition of internal control specifically includes all of the following features except

Use this information to answer the following question. In addition,beginning merchandise inventory was $22,000 and ending merchandise inventory was $14,000. Net sales for the period were

The treasurer should prepare and sign a check only after a proper check authorization has been provided.

In a purchase system,the most appropriate department to control goods upon arrival into the company is the

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters