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1. Isaiah Sporting Goods uses the perpetual average cost method of determining inventory costs. Below is;the inventory record for Product C124;Date Received Sold Cost/Unit Balance;April 22 534 $6.58 $3,513.72;May 17 433 $6.70 $2,901.10;June 21 389 $6.76 $2,629.64;August 2 436 $6.44 $2,807.84;What is the average cost per unit after the receipt of the May 17 inventory (rounded to the nearest cent)?;A. $6.00;B. $6.63;C. $6.55;D. $7.40;2. Physical inventory counts must be done;A. regardless of method inventory.;B. when using bar-code scan technology.;C. when using the periodic method of inventory.;D. when using the perpetual method of inventory.;3. Under a perpetual inventory system, the account to which transportation charges on incoming merchandise is generally entered is;A. FOB shipping.;B. delivery expense.;C. inventory.;D. FOB destination.;4. Under Sarbanes-Oxley, those officers signing off on the reports must have evaluated the company's internal control within the previous;A. nine months.;B. year.;C. six months.;D. 90 days.;5. Nick Company reports the following inventory information;Inventory Number Inventory Quantity Unit Cost Unit Market Value;APD 4837 440 $51.29 $51.48;CPZ 2837 290 $76.59 $77.02;IXL 9291 310 $42.34 $42.47;EOD 1717 200 $22.19 $21.75;DKS 3088 180 $31.22 $31.17;What is the total value of the merchandise under LCM (lower-of-cost or market)?;A. $67,961.70;B. $68,113.30;C. $68,210.30;D. $67,864.70;6. To pay the least income tax possible in periods of rising inventory costs, the company should use which inventory costing method?;A. LIFO;B. FIFO;C. Average cost;D. Specific identification;7. Committing a fraud because the employee feels "I deserve a pay raise. The company owes this to me" is indicative of which part of the fraud triangle?;A. Realization;B. Perceived opportunity;C. Rationalization;D. Perceived pressure;8. Which of the following may not limit the effectiveness of internal control systems in an organization?;A. Understanding of policies and procedures;B. Duties not segregated;C. Poorly designed controls;D. Costs not worth benefits;9. When a company repays the seller for shipping costs on an FOB shipping transaction, which of the following is true?;A. The shipping costs don't affect the invoice cost.;B. A purchase discount cannot be taken when shipping charges are prepaid.;C. A purchase discount can still be taken on the gross amount of the invoice.;D. A purchase discount can still be taken net of the prepaid shipping charges.;10. A company's gross profit percentage decreases from 58% to 51%. What does this mean?;A. This means that net income will be lower.;B. This means that there will be a net loss.;C. We can't determine anything definite from the information given.;D. This means that net income will be higher.;11. Goods available for sale are $118,000, beginning inventory is $37,000, ending inventory is $42,000, and cost of goods sold is $77,000. The inventory turnover is;A. 1.95.;B. 2.99.;C. 1.53.;D. 1.83.;12. To overstate earnings, a company can;A. overstate expenses and overstate revenue.;B. understate unearned revenue and understate property, plant, and equipment.;C. understate expenses and understate revenue.;D. overstate receivables and understate payables.;13. A low gross profit percentage means that;A. general and administrative expenses are very high.;B. selling expenses are very low.;C. the cost of goods sold was relatively low.;D. the cost of goods sold was relatively high.;14. 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. This means that current assets increased and current liabilities decreased.;C. There isn't enough information to explain the increase.;D. This means that current assets increased and current liabilities increased.;15. When a merchandiser sells on account, which of the following is not needed to record the transaction?;A. Accounts receivable;B. Inventory;C. Cost of goods sold;D. Cash;16. Casey Company's beginning inventory and purchases during the fiscal year ended December 31, 2012, were as follows: (Note: The company uses a perpetual system of inventory.);Units Unit Price Total Cost;January 1?Beginning Inventory 20 $12 $240;March 8?Sold 14;April 2?Purchase 30 $13 $390;June 5?Sold 25;Aug 6?Purchase 25 $14 $350;Total Cost of Inventory $980;Ending inventory is 14 units.;What is the ending inventory of Casey Company for 2012 using FIFO?;A. $175;B. $182;C. $168;D. $196;17. A drawback to using _______ when inventory costs are rising is that the company reports lower net income.;A. average costing;B. LIFO;C. specific-identification costing;D. FIFO;18. If current assets decrease and current liabilities increase, the current ratio;A. increases.;B. remains the same.;C. decreases.;D. will change based on the change in total assets.;19. In a balance sheet prepared in report form, liabilities must be listed after;A. assets with long-term liabilities listed first.;B. stockholders' equity.;C. assets with current liabilities listed first.;D. assets in alphabetical order.;20. Which items may not limit the effectiveness of internal control systems in an organization?;A. Costs not worth benefits;B. Overriding controls;C. Collusion;D. Properly designed controls


Paper#81661 | Written in 18-Jul-2015

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