1.

An employee assigned to counting computer monitors in boxes should

estimate the number if there is a large quantity to be counted.

determine that the box contains a monitor.

rely on the warehouse records of the number of computer monitors.

read each box and rely on the box description for the contents.

2.

After the physical inventory is completed,

the accuracy of the inventory summary sheets is checked by the person listing the quantities on the sheets.

unit costs are determined by dividing the quantities on the summary sheets by the total inventory costs.

quantities are listed on inventory summary sheets.

quantities are entered into various general ledger inventory accounts.

3.

When is a physical inventory usually taken?

When the company has its greatest amount of inventory.

When goods are not being sold or received.

At the end of the companys fiscal year.

When the company has its greatest amount of inventory and at the end of the company's fiscal year.

4.Internal control is defined, in part, as a plan that safeguards

liabilities.

all balance sheet accounts.

assets.

capital stock.

5.

Which of the following should not be included in the physical inventory of a company?

Goods held on consignment from another company.

Goods in transit from another company shipped FOB shipping point.

Goods shipped on consignment to another company.

All of these answer choices should be included.

6. Under the concept of establishment of responsibility, how many people should have the ultimate responsibility?

The CEO.

Only one individual.

An individual and his/her supervisor.

Everyone in the organization.

7.Internal controls are not designed to safeguard assets from

robbery.

employee theft.

natural disasters.

unauthorized use.

8. Which of the following is not a limitation of internal control?

Collusion.

Cost of establishing control procedures should not exceed their benefit.

The size of the company.

The human element.