Question 1

A remittance advice is attached to a(n)

Accepted Answer

A)  check. 
B)  invoice. 
C)  purchase requisition. 
D)  check authorization. 
A)  check. 
B)  invoice. 
C)  purchase requisition. 
D)  check authorization.

Question 2

Under the perpetual inventory system,in addition to making the entry to record a sale,a company would

Accepted Answer

A)  record an increase in inventory corresponding to the amount of the sale. 
B)  record a decrease in inventory and an increase in cost of goods sold for the cost of the merchandise sold. 
C)  record an increase in inventory corresponding to the cost of the inventory. 
D)  make no additional entry until the end of the period. 
A)  record an increase in inventory corresponding to the amount of the sale. 
B)  record a decrease in inventory and an increase in cost of goods sold for the cost of the merchandise sold. 
C)  record an increase in inventory corresponding to the cost of the inventory. 
D)  make no additional entry until the end of the period.

Question 3

Which of the following is not an internal control activity for cash?

Accepted Answer

A)  Surprise audits of cash on hand should be made occasionally. 
B)  All cash receipts should be recorded promptly. 
C)  The number of persons who have access to cash should be limited. 
D)  Most transactions should be in cash to reduce recordkeeping. 
A)  Surprise audits of cash on hand should be made occasionally. 
B)  All cash receipts should be recorded promptly. 
C)  The number of persons who have access to cash should be limited. 
D)  Most transactions should be in cash to reduce recordkeeping.

Question 4

Which of the following is not a goal of a system of internal control over merchandising transactions?

Accepted Answer

A)  Prevent the theft of cash and inventory. 
B)  Keep enough cash on hand to take advantage of purchase discounts. 
C)  Keep the maximum amount of inventory on hand at all times. 
D)  Keep credit losses as low as possible. 
A)  Prevent the theft of cash and inventory. 
B)  Keep enough cash on hand to take advantage of purchase discounts. 
C)  Keep the maximum amount of inventory on hand at all times. 
D)  Keep credit losses as low as possible.

Question 5

Which of the following documents would not originate with the purchasing company?

Accepted Answer

A)  Purchase order 
B)  Check authorization 
C)  Purchase requisition 
D)  Invoice 
A)  Purchase order 
B)  Check authorization 
C)  Purchase requisition 
D)  Invoice

Question 6

Computerization has helped to make taking physical inventory a much easier process in both the periodic and perpetual inventory systems.

Accepted Answer

A) True 
 B)False

Question 7

Sale and purchase of goods should be recorded at their list price,before any trade discount is recorded.

Accepted Answer

A) True 
 B)False

Question 8

Use this balance sheet and income statement to answer the following question.     The current ratio for Abner Systems is (after rounding to two decimal places

Accepted Answer

A)  .67. 
B)  1.25. 
C)  1.13. 
D)  1.50. 
A)  .67. 
B)  1.25. 
C)  1.13. 
D)  1.50.

Question 9

Working capital measures

Accepted Answer

A)  the excess of current assets over current liabilities-what is on hand to continue business operations. 
B)  the ability to earn a satisfactory income. 
C)  the amount of debt in the company. 
D)  the profitability of the business. 
A)  the excess of current assets over current liabilities-what is on hand to continue business operations. 
B)  the ability to earn a satisfactory income. 
C)  the amount of debt in the company. 
D)  the profitability of the business.

Question 10

Proper control procedures do not guarantee the prevention of theft.

Accepted Answer

A) True 
 B)False

Question 11

From the simplified balance sheet and income statement of the business below,compute the following financial measures.
a.Working capital
b.Current ratio

Accepted Answer

a.$4,000 -

Question 12

When a company makes payment for goods or services,the check is prepared by the company's

Accepted Answer

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

Question 13

Another term for an invoice is a check.

Accepted Answer

A) True 
 B)False

Question 14

An effective system of internal control centralizes functions in a single,capable individual.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is an appropriate internal control activity for cash?

Accepted Answer

A)  The amount of cash on hand should be kept to a maximum. 
B)  All payments should be made with currency,not checks. 
C)  Banking facilities should be used as little as possible. 
D)  Recordkeeping and custodianship over cash should be performed by separate individuals. 
A)  The amount of cash on hand should be kept to a maximum. 
B)  All payments should be made with currency,not checks. 
C)  Banking facilities should be used as little as possible. 
D)  Recordkeeping and custodianship over cash should be performed by separate individuals.

Question 16

The entry to record a sales return from a customer in the perpetual inventory system would require a(n)

Accepted Answer

A)  decrease to Sales. 
B)  increase to Sales. 
C)  decrease to Sales Returns and Allowances. 
D)  increase to Sales Returns and Allowances. 
A)  decrease to Sales. 
B)  increase to Sales. 
C)  decrease to Sales Returns and Allowances. 
D)  increase to Sales Returns and Allowances.

Question 17

Which of the following is not considered in computing net cost of purchases?

Accepted Answer

A)  Freight-out expenses 
B)  Purchases 
C)  Freight paid on purchased goods 
D)  Purchases returns and allowances 
A)  Freight-out expenses 
B)  Purchases 
C)  Freight paid on purchased goods 
D)  Purchases returns and allowances

Question 18

Internal control is weakened by all of the following except

Accepted Answer

A)  collusion. 
B)  separation of duties. 
C)  effects of changing conditions. 
D)  human error. 
A)  collusion. 
B)  separation of duties. 
C)  effects of changing conditions. 
D)  human error.

Question 19

The difference between gross sales and net sales is equal to the sum of sales discounts and sales returns and allowances.

Accepted Answer

A) True 
 B)False

Question 20

A company would be more likely to know the amount of inventory on hand if it used the perpetual inventory system rather than the periodic inventory system.

Accepted Answer

A) True 
 B)False

A remittance advice is attached to a(n)

Under the perpetual inventory system,in addition to making the entry to record a sale,a company would

Which of the following is not an internal control activity for cash?

Which of the following is not a goal of a system of internal control over merchandising transactions?

Which of the following documents would not originate with the purchasing company?

Computerization has helped to make taking physical inventory a much easier process in both the periodic and perpetual inventory systems.

Sale and purchase of goods should be recorded at their list price,before any trade discount is recorded.

Use this balance sheet and income statement to answer the following question. The current ratio for Abner Systems is (after rounding to two decimal places

Working capital measures

Proper control procedures do not guarantee the prevention of theft.

From the simplified balance sheet and income statement of the business below,compute the following financial measures. a.Working capital b.Current ratio

When a company makes payment for goods or services,the check is prepared by the company's

Another term for an invoice is a check.

An effective system of internal control centralizes functions in a single,capable individual.

Which of the following is an appropriate internal control activity for cash?

The entry to record a sales return from a customer in the perpetual inventory system would require a(n)

Which of the following is not considered in computing net cost of purchases?

Internal control is weakened by all of the following except

The difference between gross sales and net sales is equal to the sum of sales discounts and sales returns and allowances.

A company would be more likely to know the amount of inventory on hand if it used the perpetual inventory system rather than the periodic inventory system.

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

A remittance advice is attached to a(n)

Under the perpetual inventory system,in addition to making the entry to record a sale,a company would

Which of the following is not an internal control activity for cash?

Which of the following is not a goal of a system of internal control over merchandising transactions?

Which of the following documents would not originate with the purchasing company?

Computerization has helped to make taking physical inventory a much easier process in both the periodic and perpetual inventory systems.

Sale and purchase of goods should be recorded at their list price,before any trade discount is recorded.

Use this balance sheet and income statement to answer the following question. The current ratio for Abner Systems is (after rounding to two decimal places

Working capital measures

Proper control procedures do not guarantee the prevention of theft.

From the simplified balance sheet and income statement of the business below,compute the following financial measures. a.Working capital b.Current ratio

When a company makes payment for goods or services,the check is prepared by the company's

Another term for an invoice is a check.

An effective system of internal control centralizes functions in a single,capable individual.

Which of the following is an appropriate internal control activity for cash?

The entry to record a sales return from a customer in the perpetual inventory system would require a(n)

Which of the following is not considered in computing net cost of purchases?

Internal control is weakened by all of the following except

The difference between gross sales and net sales is equal to the sum of sales discounts and sales returns and allowances.

A company would be more likely to know the amount of inventory on hand if it used the perpetual inventory system rather than the periodic inventory system.

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