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Penn Foster - Accounting for Merchandising MCQs

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Question;1. Committing a fraud because the employee feels that it will be easy to do is indicative of which part of the fraud triangle?A. RationalizationB. Perceived pressureC. Perceived opportunityD. Realization2. Goods available for sale are $350,000, beginning inventory is $24,000, ending inventory is $32,000, and cost of goods sold is $275,000. The inventory turnover isA. 11.46.B. 8.59.C. 12.50.D. 9.82.3. Besides using an overstatement of earnings to inflate a company's stock price, overstating earnings may also be used toA. avoid paying raises to employees.B. avoid paying dividends to stockholders.C. ensure larger bonuses to upper management at year-end.D. deflate the amount of taxes the corporation pays.4. Meranda Company reports the following inventory information:What is the total value of the merchandise under LCM (lower-of-cost or market)?InventoryNumberInventoryQuantity Unit CostUnit MarketValueAPD 3838 325 $56.78 $55.32CPZ 1212 506 $92.31 $92.78IXL 4039 817 $77.89 $79.31EOD 3902 382 $19.38 $19.02DKS 4823 626 $33.46 $30.74A. $154,832.90B. $156,230.80C. $157,147.60D. $158,545.605. If current assets decrease and current liabilities increase, the current ratioA. decreases.B. remains the same.C. increases.D. will change based on the change in total assets.6. Which of the following would probably not cause inventory shrinkage?A. Correct counting of all inventoryB. Spills of itemsC. Employee theftD. Spoilage of items7. Which of the following would probably not need to be disclosed in a footnote?A. A change in depreciation methodB. A material change in estimated shrinkageC. Change of inventory methodsD. A 10% increase in sales8. Which of the following may not limit the effectiveness of internal control systems in an organization?A. Poorly designed controlsB. Understanding of policies and proceduresC. Costs not worth benefitsD. Duties not segregated9. Isaiah Sporting Goods uses the perpetual average cost method of determining inventory costs. Below is the inventory record for Product C124:What is the average cost per unit after the receipt of the May 17 inventory (rounded to the nearest cent)?Date Received Sold Cost/Unit BalanceApril 22 534 $6.58 $3,513.72May 17 433 $6.70 $2,901.10June 21 389 $6.76 $2,629.64August 2 436 $6.44 $2,807.84A. $6.63B. $6.00C. $7.40D. $6.5510. Goods such as milk, bread, and cheese would probably be costed using the _______ method ofinventory costing.A. LIFOB. specific-identificationC. averageD. FIFO11. A drawback to using _______ when inventory costs are rising is that the company reports lower net income.A. FIFOB. LIFOC. average costingD. specific-identification costing12. The balance sheet format that lists assets above liabilities is the _______ form.A. alphabeticalB. accountC. reportD. liquidity13. One of the biggest factors in implementing SOX wasA. reviewing the financial reports.B. establishing internal control procedures.C. disclosing deficiencies in internal controls.D. the cost of implementing the system.14. To pay the least income tax possible in periods of rising inventory costs, the company should use which inventory costing method?A. Average costB. FIFOC. LIFOD. Specific identification15. Which items may not limit the effectiveness of internal control systems in an organization?A. Properly designed controlsB. Costs not worth benefitsC. Overriding controlsD. Collusion16. A company's current ratio increased from 1.23 to 1.45. What does this mean?A. This means that current assets decreased and current liabilities decreased.B. There isn't enough information to explain the increase.C. This means that current assets increased and current liabilities increased.D. This means that current assets increased and current liabilities decreased.End of exam17. A company's gross profit percentage decreases from 58% to 51%. What does this mean?A. This means that net income will be higher.B. This means that net income will be lower.C. We can't determine anything definite from the information given.D. This means that there will be a net loss.

 

Paper#44254 | Written in 18-Jul-2015

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