1.Rachel Inc. is a retail store that sells building supplies. Rachel has a calendar year end. Rachel understated its ending inventory for the year ended December 31, 2019. How would the error in the 2019 ending inventory affect the 2019 financial statements?

A.Net income for the year ended December 31, 2019 would be overstated

B.Current assets at December 31, 2019 would be overstated

C.No effect on the 2019 financial statements

D.Cost of goods sold for the year ended December 31, 2019 would be overstated

2. Wasserman Delivery Service delivers packages in delivery trucks. Which of the following transactions of Wasserman should be recorded as plant assets?

A. Wasserman changes the oil and oil filters on all its delivery trucks for a total cost of $10,000.

B. A waste management company comes to Wasserman each week to pick up the recycling paper, newspapers, and plastic. Wasserman pays this company $10,000 per month.

C. Wasserman pays $10,000 to a company that washes the floor in Wasserman's very large garage

D. Wasserman purchases two new engines for two trucks for $10,000.

E. Wasserman pays $10,000 to a company that washes all iof Wasserman's trucks.

3.DLW, Inc. hires you to work in its sales department and you prepare sales invoices. You are required to forward one copy of the sales invoice to the accounting department so the accounting department can record the sales transaction. These facts illustrate the internal control principle of:

A.Independent internal verification

B. Segregation of duties

C. Physical controls

D. Department controls

E. Documentation procedure

4. EBN, Inc. is valuing its inventory as of December 31. EBN uses the average cost method to value its inventory and also uses the periodic inventory system. Inventory records for EBN revealed the following information for 2019:

Date Transaction Number of Units Unit Cost Jan 1 Beginning inventory 600 $6.00 March 13 Purchase 700 7.00 September 10 Purchase 800 8.00 November 15 Purchase 900 9.00

EBN has 1300 units in its ending inventory at December 31. What was the value of the ending inventory at December 31? (If necessary, round the average unit cost to three decimals and final answer to the nearest whole dollar):

A.$9,967

B. $9,750

C. $10,000

D. $13,250

E. $13,033

5.You are watching NBC News with your best friend. Lester Holt reports that Intangible Assets of Apple, Inc. are currently $10 billion. Your friend asks you "What is an Intangible Asset?" Which of the following is NOT an Intangible Asset?

A.Land

B.Franchises

C.Goodwill

D. Patents

E. Trademarks

6.You are attending a Yankee game and you want to buy some souvenirs at the Yankee Gift Shop. You go to the Gift Shop and buy three T shirts and two Yankee baseball caps. The total bill is $200. You use your VISA (Bank of America) Card to pay for the souvenirs. Bank of America charges a service fee of 2%.The Yankee Gift Shop's entry to record the transaction would include:

A. A credit to Service Charge Expense of $4

B. A credit to Cash of $200

C. A debit to Sales Revenue of $200

D. A credit to Sales Revenue of $196

E. A debit to Cash of $196

ECW, Inc. is analyzing its outstanding accounts receivable. ECW prepares its financial statements at the end of its fiscal year, which is December 31, 2019. All its sales are made on credit. At December 31, 2019, ECW's unadjusted trial balance also shows the following amounts for selected accounts.

Account title	Balance (Dr. or Cr.)
Accounts Receivable	$ 500,000 Dr.
Allowance for Doubtful Accounts	16,000 Cr.
Sales Revenue	4,000,000 Cr.
Bad Debt Expense	0

ECW has performed some analysis and has estimated that 6% of accounts receivable is uncollectible. What amount should ECW record as Bad Debt Expense for the year ended December 31, 2019?

A.$0 B.$240,000 C.$14,000 D.$30,000 E.$16,000