7) Physical counts of inventory

A) Are not necessary under the perpetual system

B) Are not necessary under the perpetual system and should be taken at least once a month

C) Are necessary to adjust for shrinkage and should be taken at least once a month

D) Should be taken at least once a month

E) Are necessary to adjust for shrinkage

8) Costs included in the value of inventory are

A) Transportation-in

B) Purchase price less discounts

C) Insurance

D) Storage

E) All of the above

9) The pricing of an inventory where the purchase invoice of each item in the ending inventory is identified and

used to determine the cost assigned to the inventory is

A) Retail method

B) Weighted-average inventory method

C) Specific identification method

D) Average costing method

E) First-in, first-out method

10) Toys "R" Ltd. had cost of goods sold of $6,000 million, ending inventory of $2,500 million, and average

inventory turnover of $2,000 million. The days' sales in inventory is

A) 121.7 B) 1,095 C) 152.1 D) 87 E) 30.5

11) An internal control system is the policies and procedures that managers use to

A) Encourage adherence to company policies.

B) Promote efficient operations

C) Protect assets

D) Ensure reliable accounting

E) All of the above

12) Policies and procedures used to promote efficient company operations are known as

A) Management controls

B) Internal controls

C) Inventory control

D) Asset controls

E) Cash controls

13) Cash consists of

A) IOUs

B) Coins, currency, chequing accounts, and certificates of deposit

C) Coins, currency, and chequing accounts

D) Postage stamps

E) Certificates of deposit

14) Cash equivalents

A) Are short-term, highly liquid investments and include chequing accounts

B) Are short-term, highly liquid investments

C) Include 6-month certificates of deposit

D) Include chequing accounts

E) Are recorded in petty cash