1. the consisency principle allows companies to use different inventory valuation methods period to period as long as the changes are fully disclosed. answer: true or false

2. a system designed to collect and process data withub an organization for the purpose of providing users with informatiob is referred to as management information system. answer: true or false

3. a group of components that collect and process raw financial data ibto timely, accurate, relevant, abd cost-effective information to meet the purposes of internal and external users.

a. human resources system

b. finance system

c. accouting information system

d. sales and marketing system.

4. understatement of ending inventory causes:

a. cost of goods sold to be overstated and net income to be understated

b. cost of goods sold to be overstated and net income to be overstated

c. cost of goods sold to be understated and net income to be understated

d. cost of goods to be understated and net income to be overstated

e. cost of goods sold to be overstated and net income to be accurate

5. generally accepted accounting principles require that the inventory of a company be reported a:

a. net realizable value

b. historical cost

c. lower of cost and net realizable value

d. replacement cost

e. purchase price

6. the pricing of an inventory where the purchase invoice of each item in the endinf inventory is identified and used to determine the cost assigned to the inventory is:

a. weighted average inventory method

b. first-in, first- out method

c. average costing method

d. specific identification method

e. retail method

7. the general journal is used for all transactions not recorded in a special journal. answer: true or false

8. most organizations use special journals to enhance effciency of transaction processing.

answer: true or false

9. goods in transit are included in inventory:

a. at any time in transit

b. when the purchaser is responsible for paying freight charges

c. when the supplier pays the freight charges

d. when ownership has passed to the purchaser

e. when the purchaser is responsible for paying freight charges and when ownership has passed to the purchaser

10. the consistency principle:

a. requires a company to use the same accounting methods period after period

b. requires a company to use one cost flow assumption exclusively

c. allows a company to change its cost flow assumption period after period in order to maximize net income

d. is also called the patching principle

e. allows a company to change its cost flow assumption period after period in order to minimize income taxes

11. the three methods of inventory valuation that are most often used in Canada are specific identification, fifo and (moving) weighted average. answer: true or false

12. internal sources of information collected by management information systems include all of the following except:

a. human resources systems

b. government

c. finance system

d. sales and marketing systems

13. testing the ledger is a process used to ensure that controlling accounts and subledger accounts are in balance: answer: true or false

14. incidental costs added to the value of inventory import duties, transportation-in, storage, and insurance. answer: true or false

15. a subsidary ledger:

a. includes transactions not covered by special journals

b. is a listing of all the accounts of a business

c. is a listing of all accounts with balances

d. is a listing of individual accounts with a common characteristic

e. is a listing of all special journals

16. the sales journal is used to record sales of merchandise on credit. answer: true or false

17. damaged goods are not counted in inventory if they cannot be sold. answer: true or false

18. special journals include:

a. sales journals

b. cash reciepts journal

c. purchases journal

d. cash disbursements journal

e. all of the above

19. the components of an AIS include all of the following expect:

a. accounts receivable

b. accounts payable

c. research

d. payroll

20. use of the FIFO cost flow assumption means that:

a. ending inventory items are the ones most recently purchased

b. goods are removed from inventory at their average cost

c. the periodic costing system is used

d. the beginning inventory contains the oldest costs

e. all of these are correct answers