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Study Resources (Accounting)

6.3   Questions 1) In a broad sense, fraud is the use of deception or trickery for personal gain. 2) Fraud is always committed against an organization. 3) Fraud is one of the less perpetrated business crimes today. 4) An organization's employees are usually responsible for fraud that is committed by a business organization. 5) For.
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31) Committing a fraud because of a drug habit or living beyond your means is an example of: A) realization. B) perceived opportunity. C) rationalization. D) perceived pressure. 32) Committing a fraud because of easy access to a company's assets is an example of: A) realization. B) perceived opportunity. C) rationalization. D) perceived pressure. 33) An employee's moral beliefs make.
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7.5   Questions 1) Accounts Receivable are reported at current market value in the current assets sections of the balance sheet. 2) Accounts receivable may be reported net of Allowance for Doubtful Accounts. 3) Accounts Receivable should be reported at ________ in the ________ section of a company's balance sheet. A) Market value; Long-Term Assets B).
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5.2   Questions 1) Beginning inventory plus net purchases equals cost of goods sold. 2) A piece of artwork would probably be inventoried using the specific-identification method. 3) The objective of inventory tracking is to allocate the cost of goods available for sale between the cost of units sold and the cost of unsold.
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11) Current assets are listed on the balance sheet in: A) alphabetical order. B) order of liquidity. C) ascending order of value. D) descending order of value. 12) Wages Payable, Income Taxes Payable and Accounts Payable are: A) long-term liabilities. B) long-term assets. C) short-term liabilities. D) short-term assets. 13) A 10-year note payable would be listed on the balance.
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21) The period end adjusting entry for bad debt expense under the allowance method is: A) Bad Debt Expense, debit; Allowance for Uncollectible Accounts, credit. B) not required. C) Cash, debit; Accounts Receivable/customer name, credit. D) Bad Debt Expense, debit; Accounts Receivable/customer name, credit. 22) The journal entry to write off a customer's account under.
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7.4   Questions 1) The simplest way to account for an uncollectible account is to use the allowance method. 2) When writing off an account using the direct write-off method, the journal entry would include a debit to Bad Debt Expense. 3) GAAP generally allows the direct write-off method for accounting for bad debts. 4).
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5.1   Questions 1) Merchandise inventory represents the goods that a merchandiser has available to sell to its customers. 2) Inventory is probably the retailer's smallest (by value) current asset. 3) Manufacturers have three different kinds of inventory. 4) GAAP allows two different kinds of inventory costing methods. 5) Under the specific-identification method, the flow of.
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21) Which of the following would NOT be considered a control activity? A) Keeping accounting records B) Having written job descriptions C) Not having employees take vacations D) Changing passwords regularly 22) Which of the following would NOT be considered part of the control environment? A) Having integrity and ethical values B) Assessing chances of fraud C) Having.
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4.7   Questions 1) Gross profit percentage is computed by dividing net sales by cost of goods sold. 2) The net income percentage is computed by dividing net income by gross profit. 3) If a company has $115,000 net sales, $65,000 in gross profit, and $12,000 in net income, the net income percentage would.
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11) An overstatement of earnings can inflate a company's stock price and may also be used to: A) deflate the amount of taxes the corporation pays. B) avoid paying raises to employees. C) ensure larger bonuses to upper management at year-end. D) avoid paying dividends to stockholders. 12) The primary form of fraud committed against.
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5.7   Questions 1) If a company experiences a loss of inventory for fire, there is no way to estimate the inventory. 2) The first step in using the gross profit method to estimate ending inventory is to: A) calculate the cost of goods available for sale. B) estimate the ending inventory. C) estimate the beginning.
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41) The factor that might make a person steal money because "The company has more than its fair share," would be: A) realization. B) perceived opportunity. C) rationalization. D) perceived pressure. 42) Brian is stealing money because the cash registers are not always locked away at night. This is an example of: A) realization. B) perceived opportunity. C).
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11) There are two methods for accounting for uncollectible receivables. 12) Receivables of a company CANNOT be long-term assets. 13) Which is NOT a benefit to extending credit to customers? A) Bad debt expenses B) Increased revenues C) Increased profits D) Wider range of customers 14) When a customer fails to pay on their account, it creates.
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6.5   Questions 1) Behaving ethically and behaving legally are the same. 2) Ethical conduct refers to how society requires people to act. 3) A person who reports unethical behavior is called a whistleblower. 4) The Sarbanes-Oxley Act requires a company's stockholders to be more responsible. 5) The Sarbanes-Oxley Act only applies to publically traded.
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6.2   Questions 1) An organization's employees are responsible for the design and implementation of the internal control system. 2) One objective of an internal control system is to safeguard the assets of a company. 3) Ensuring compliance with laws and regulations is an example of what following GAAP can do for a company. 4).
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21) When merchandise is purchased on account under the perpetual inventory system, the journal entry is: A) debit Purchases and credit Accounts Payable. B) debit Accounts Payable and credit Inventory. C) debit Inventory and credit Accounts Payable. D) debit Accounts Payable and credit Purchases. 22) The inventory system that uses the merchandise inventory account as.
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4.1   Questions 1) Wholesalers purchase large quantities of product from manufacturers and then sell the product to retailers. 2) Retailers may buy goods from the manufacturer and then sell the goods to consumers. 3) A retailer sells goods to a wholesaler. 4) Goods that a retailer sells to consumers are classified as inventory. 5) Which.
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11) James, a customer, purchased $500 of merchandise from Haskins, Inc. Under the perpetual inventory system, Haskins, Inc. will record a: A) debit to Accounts Receivable or to Cash for $500. B) credit to Accounts Receivable or to Cash for $500. C) credit to Cost of Goods Sold for $500. D) debit to Sales.
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5.5   Questions 1) An example of full disclosure would be a footnote to the financial statements indicating what method was used to value inventory. 2) Knowledgeable decisions that are made by outsiders who read financial reports are a result of the concept of conservatism. 3) Shrinkage refers to the loss of inventory due.
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21) Receiving something from a supplier in exchange for authorizing payments for goods not delivered to the employer would be an example of a: A) cash receipts scheme. B) cash register scheme. C) bribe or kickback. D) check tampering scheme. 22) Cash register schemes are a form of: A) employee embezzlement. B) bribe. C) fraudulent financial reporting. D) management.
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6.4   Questions 1) Audits confirm the validity and reliability of accounting information. 2) Employees conduct external audits of a business. 3) Generally Accepted Auditing Standards are developed by the Securities and Exchange Commission. 4) Certified Public Accountants perform external audits of a company to confirm that the financial statements are fairly presented according to.
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11) The accounts that are NOT closed are: A) assets, liabilities, and revenues. B) assets, liabilities, and stockholder's equity. C) assets, liabilities, and expenses. D) revenues, expenses and dividends. 12) Dividends paid and net losses are: A) additions to Retained Earnings. B) subtractions from Retained Earnings. C) additions to net income. D) subtractions from net income. 13) Revenues are: A) additions.
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7.2   Questions 1) Cash is listed first on the balance sheet because it is the least liquid asset. 2) Each cash account is listed separately on the balance sheet. 3) Cash equivalents may include money orders and traveler's checks. 4) Ninety-day U.S. Treasury notes are considered cash equivalents. 5) Cash consists of anything that a.
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5.3   Questions 1) The choice of inventory costing method does not have an effect on net income. 2) The average cost method generates gross profit, net income, and income tax amounts that fall between the extremes of FIFO and LIFO. 3) In order to pay the least income tax possible in periods of.
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11) Streamlined payment procedures now involve the use of electronic data interchange and electronic funds transfer between and among suppliers and merchandisers. 12) Bank reconciliations are an important part of internal control that should be performed daily. 13) In a bank reconciliation, the bank balance and the book balance must be adjusted.
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11) Inventory errors cancel out at the end of ________ accounting periods. A) 1 B) 2 C) 3 D) 4 12) Which of the following is an INCORRECT statement if ending inventory is overstated? A) Cost of goods sold is overstated. B) Gross profit is overstated. C) Net income is overstated. D) Income tax is overstated. 13) Which of the.
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5.8   Questions 1) Inventory is the most important asset in a service business. 2) Inventory turnover equals average ending inventory divided by cost of goods sold. 3) Inventory turnover measures the amount of times a company turns over its beginning inventory during a period. 4) Other than the cost of purchasing the inventory, another.
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5.6   Questions 1) The ending inventory of one year becomes the beginning inventory of the next year. 2) Counting inventory that is in transit on December 31 that was shipped from the supplier FOB shipping point would not cause any error in the final inventory valuation. 3) An ending inventory error in one.
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5.4   Questions 1) Under the conservatism principle, liabilities and expenses would be overstated, rather than understated. 2) The LCM rule compares original cost to current replacement cost to determine the amount at which inventory should be valued. 3) A material amount of value is one large enough to cause someone to change a.
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7.1   Questions 1) Credit sales are the most desirable form of sales. 2) The most common credit cards issued by financial institutions are Discover and American Express. 3) The most common types of financial institution credit cards are MasterCard and Visa. 4) MasterCard and Visa sales are treated like cash sales. 5) Most financial institutions.
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11) A properly designed internal control system can guarantee that fraud will not occur. 12) Internal control is a comprehensive system that helps an organization do all of the following EXCEPT: A) safeguard assets. B) safeguard liabilities. C) operate efficiently and effectively. D) ensure compliance with applicable laws and regulations. 13) Internal control systems: A) are the.
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4.3   Questions 1) Both purchase returns and allowances decrease the merchandiser's inventory cost. 2) The purchase of inventory affects both an asset and the stockholder's equity account. 3) An invoice with the credit terms 3/10, n/30 means that the customer has 3 days to take a 10% discount off of the invoice total. 4).
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4.2   Questions 1) Most businesses today use the periodic inventory method. 2) Because of innovative and computerized methods of tracking inventory, most businesses today use the perpetual inventory method. 3) In the perpetual inventory system, inventory is constantly updated through the inventory tracking system. 4) Under the perpetual inventory system, the need for a.
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6.1   Questions 1) The process CPAs use to confirm that financial reports conform to GAAP is called a review. 2) U.S. GAAP has been organized into what is called the Accounting Standards Code. 3) Currently, most European countries are using International Financial Reporting Standards. 4) The U.S. is now using International Financial Reporting.
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4.6   Questions 1) Most merchandising businesses prepare a single-step income statement. 2) Cost of Goods Sold is part of general and administrative expenses. 3) Net Sales minus Cost of Goods Sold equals Gross Profit. 4) Net income is generally referred to as the company's "bottom line." 5) The statement of retained earnings for a merchandiser.
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7.3   Questions 1) Accounts receivable are more formal and usually longer in terms than notes receivable. 2) Notes receivable generally include a charge for interest. 3) A company may have receivables such as loans to employees and interest receivable. 4) Accounts receivable are classified as current assets. 5) Which of the following would indicate poor.
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4.4   Questions 1) Sales Discounts and Sales Returns and Allowances are contra-accounts of the Sales account. 2) Debit card and credit card sales are counted as cash transactions. 3) A journal entry that has more than one debit or more than one credit is known as a complex journal entry. 4) The account Sales.
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11) Renaud, Inc. has the following list of inventory: Item Unit Cost Selling Price DKW $13,257 $20,322 EOR $ 6,790 $7,192 CKS $18,302 $19,773 XCC $ 9,394 $11,274 CIS $27,434 $33,409 Under specific-identification, what is Renaud's ending inventory if EOR and CIS are not sold during the current period? A) $34,224 B) $40,601 C) $40,953 D) $51,369 12) Inland Industrial has the following list of inventory: Item Unit Cost Selling Price DKW $13,257 $20,322 EOR $ 6,790 $7,192 CKS $18,302 $19,773 XCC $ 9,394 $11,274 CIS $27,434 $33,409 Under.
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21) ________ entries transfer net income or net loss and dividends to the Retained Earnings account. A) Adjusting B) Closing C) General D) Timely 22) Closing entries are prepared for which of the following reasons? A) To get the accounts ready for the next accounting period B) To get the worksheet ready for the next accounting period C).
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