26 of35

Which account would always be used for an inventory adjustment?

Sales

Cost of Goods Sold

Cash

Purchase Returns and Allowances

Question

27 of35

A company's gross profit percentage increased from 37% to 41%. What does this mean?

This means that cost of goods sold as a percentage of net sales decreased.

This means that operating expenses as a percentage of net sales decreased.

This means that cost of goods sold as a percentage of net sales increased.

There is not enough information to explain the increase.

Question

28 of35

Cost of goods available for sale minus estimated Cost of Goods Sold yields the estimated

ending inventory.

beginning inventory.

gross profit.

cost of goods sold.

Question

29 of35

Inventory for a merchandising business is classified as a(n):

asset.

liability.

revenue.

part of Stockholders' Equity.

Question

30 of35

Given the following inventory activity, what is ending inventory using the perpetual LIFO costing method?

Date		Quantity	Unit Cost
Beginning Balance		100	$5.50
September 17	Purchase	50	$3.50
September 17	Sale	25
September 29	Purchases	40	$6

125 units @ $4.50 and 40 units @ $6.00

165 units @ $4.86

75 units @ $5.00 and 50 units @ $3.50 and 40 units @ $6.00

100 units @ $5.00 and 25 units @ $3.50 and 40 units @ $6.00

Question

31 of35

Which factor would make a person feel forced to steal money because of high medical bills?

Realization

Perceived opportunity

Rationalization

Perceived pressure

Question

32 of35

In terms of valuation, U.S. GAAP generally uses ________, while IFRS generally uses ________.

market values, historical values

historical values, market values

market values, market values

historical values, historical values

Question

33 of35

Which element of internal control deals with establishing procedures for things such as the handling of incoming checks?

Control activities

Risk assessment

Control environment

Monitoring

Question

34 of35

________ represents what future owners will pay present owners for their business.

Future value

Replacement value

Market value

Book value

Question

35 of35

For accounting information to be useful it must be all of the following EXCEPT

relevant.

understandable.

economical.

reliable.