| A. Perceived opportunity |
| B. Rationalization |
| C. Realization |
| D. Perceived pressure |
| 2.The factor that makes a person feel forced to steal money because of high medical bills is |
| A. perceived pressure. | | B. perceived opportunity. | | C. rationalization. | | D. realization. | |
| 3. If a misstatement of inventory occurs, the net income for _______ periods will be misstated. |
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| 4. _______ occurs if a disgruntled employee convinces another to steal from the company. |
| A. A control activity | | B. The control environment | | C. Monitoring | | D. Collusion | |
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| 5. 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. What is the inventory turnover? |
| A. 12.50 | | B. 9.82 | | C. 11.46 | | D. 8.59 | |
| 6. If ending inventory in Period 1 is overstated, gross profit in Period 2 is |
| A. overstated. | | B. understated. | | C. the same as in Period1. | | D. not affected. | |
| 7. Which of the following would probably not need to be disclosed in a footnote? |
| A. A material change in estimated shrinkage | | B. A 10% increase in sales | | C. Change of inventory methods | | D. A change in depreciation method | |
| 8. A method of valuing inventory based on the average of units is called the |
| A. average cost method. | | B. specific cost method. | | C. FIFO method. | | D. LIFO method. | |
| 9. When merchandise is sold under the perpetual system of inventory, the journal entry to record a sale of merchandise on account includes debiting _______ and crediting _______. |
| A. Accounts Receivable; Sales | | B. Accounts Receivable; Cost of Goods Sold | | C. Cost of Goods Sold; Sales | | D. Accounts Receivable; Inventory | |
| 10. In the United States, GAAP's overriding principles of accounting are written by the |
| A. SEC. | | B. IRS. | | C. IASB. | | D. FASB. | |
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