) 6. 4. 3. 2. 1. Merchandise inventory includes: A) All goods owned by a company and held for sale. B) All goods in transit. C) All goods on consignment. D) Only damaged goods. E) Only non-damaged goods. Damaged and obsolete goods that can be sold: A) Are never counted as inventory. B) Are included in inventory at their full cost. C) Are included in inventory at their net realizable value. D) Should be disposed of immediately. E) Are assigned a value of zero. Regardless of the inventory costing system used, cost of goods available for sale is: A) Beginning inventory plus purchases. B) Ending inventory plus beginning inventory. C) Purchases plus ending inventory. D) Ending inventory minus beginning inventory. E) Beginning inventory minus purchases. Physical counts of inventory: A) Are not necessary under the perpetual system. B) Are necessary to adjust the Inventory account to the actual inventory available. C) Must be taken at least once a month. D) Requires the use of hand-held portable computers. E) Are not necessary under the cost-to benefit constraint. A properly designed internal control system: A) Lowers the company's risk of loss. B) Insures profitable operations. C) Eliminates the need for an audit. D) Requires the use of non-computerized systems. E) Is not necessary if the company uses a computerized system. Internal control policies and procedures have limitations not including: A) Human error. B) Human fraud. C) Cost-benefit principle. D) Collusion. E) Establishing responsibilities. A bank statement provided by the bank includes: A) A list of outstanding checks. B) A list of petty cash amounts. C) The beginning and the ending balance of the depositor's account. D) A listing of deposits in transit. E) A reconciliation to the depositor cash account. 7.