Question
____ 36. The initials GAAP stand for a. General Accounting Association Procedures b. Generally Accepted Accounting Plans c. Generally Accepted Accounting Principles d. Generally Accepted
____ 36. The initials GAAP stand for
a. | General Accounting Association Procedures |
b. | Generally Accepted Accounting Plans |
c. | Generally Accepted Accounting Principles |
d. | Generally Accepted Accounting Purposes |
____ 37. Internal control does not consist of policies and procedures that
a. | protect assets from misuse |
b. | aid management in directing operations toward achieving business goals |
c. | guarantee the company will not go bankrupt |
d. | ensure that business information is accurate |
____ 38. An account is said to have a debit balance if
a. | the amount of the debits exceeds the amount of the credits |
b. | there are more entries on the debit side than on the credit side |
c. | its normal balance is debit without regard to the amounts or number of entries on the debit side |
d. | the first entry of the accounting period was posted on the debit side |
____ 39. Which statement is true in regards to the ratio Number of Days Sales in Inventory?
a. | generally, the lower the number of days sales in inventory, the better |
b. | generally, the higher the number of days sales in inventory, the better |
c. | generally, the ratio is too difficult to calculate and therefore, not frequently used |
d. | generally, the number of days sales in inventory ratio provides meaningless info |
____ 40. The objectives of internal control are to
a. | control the internal organization of the accounting department personnel and equipment |
b. | provide reasonable assurance that operations are managed to achieve goals, financial reports are accurate, and laws and regulations are complied with |
c. | prevent fraud, and promote the social interest of the company |
d. | provide control over "internal-use only" reports and employee internal conduct |
____ 41. A check drawn by a depositor in payment of a voucher for $725 was originally recorded in the journal as $257. What correcting entry is required in the depositor's accounts?
a. | debit Accounts Payable; credit Cash |
b. | debit Cash; credit Accounts Receivable |
c. | debit Cash; credit Accounts Payable |
d. | debit Accounts Receivable; credit Cash |
____ 42. Financial reports are used by
a. | management |
b. | creditors |
c. | investors |
d. | all of the above |
____ 43. Which of the items below is not a business organization form?
a. | entrepreneurship |
b. | sole-proprietorship |
c. | partnership |
d. | corporation |
____ 44. If the cost of an item of inventory is $70 and the current replacement cost is $75, the amount included in inventory according to the lower of cost or market method is
a. | $5 |
b. | $70 |
c. | $75 |
d. | $145 |
____ 45. Which of the accounts below would be closed by making a debit to the account?
a. | Accounts Payable |
b. | Fees Earned |
c. | Jackson Samuel, Drawing |
d. | Rent Expense |
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