Answers to the 30 multiple choice questions					2 points each, 30 questions, for 60 point total
			60 points
	< please record	1)	From an internal control standpoint, the asset most susceptible to improper diversion and use is
	answer here	a.	prepaid insurance.
		b.	cash.
		c.	Equipment
		d.	Investments
		2)	Jolene is warehouse custodian and also maintains the accounting record of the inventory held at the warehouse. An assessment of this situation indicates
		a.	documentation procedures are violated.
		b.	independent internal verification is violated.
		c.	segregation of duties is violated.
	< please record	d.	establishment of responsibility is violated.
	answer here
		3)	Internal control is defined, in part, as a plan that safeguards
		a.	all balance sheet accounts.
		b.	assets.
		c.	liabilities.
		d.	capital stock.
		4)	The control principle related to not having the same person authorize and pay for goods is known as
		a.	establishment of responsibility.
		b.	independent internal verification.
	< please record	c.	segregation of duties.
	answer here	d.	rotation of duties.
		5)	Two individuals at a retail store work the same cash register. You evaluate this situation as
		a.	a violation of establishment of responsibility.
		b.	a violation of segregation of duties.
		c.	supporting the establishment of responsibility.
	< please record	d.	supporting internal independent verification.
	answer here
		6)	Having different individuals receive cash, record cash receipts, and hold the cash is an example of
		a.	establishment of responsibility.
		b.	segregation of duties.
		c.	documentation procedures.
		d.	independent internal verification.
		7)	An adjusting entry is not required for
		a.	outstanding checks.
		b.	collection of a note by the bank.
		c.	NSF checks.
		d.	bank service charges.
		8)	If a check correctly written and paid by the bank for $591 is incorrectly recorded on the company's books for $519,
		the appropriate treatment on the bank reconciliation would be to
		a.	deduct $72 from the book's balance.
		b.	add $72 to the book's balance.
		c.	deduct $72 from the bank's balance.
		d.	deduct $591 from the book's balance.
		9)	During 2013, Parker Enterprises generated revenues of $60,000. The company's expenses were as follows:
			cost of goods sold of $30,000, operating expenses of $12,000 and a loss on the sale of equipment of $2,000.
		Parker's gross profit is:
		a.	$16,000.00
		b.	$18,000.00
		c.	$30,000.00
		d.	$60,000.00
		10)	A primary difference between a periodic and perpetual inventory system is that a periodic system:
		a.	determines the inventory on hand only at the end of the accounting period.
		b.	provides better control over inventories.
		c.	records the cost of goods sold after each sale transaction.
		d.	keeps a record showing the merchandise inventory on hand at all times.
		11)	A decline in a company's gross profit could be caused by all of the following except:
		a.	selling products using a lower markup.
		b.	clearance of discontinued inventory.
		c.	paying lower prices to its suppliers.
		d.	increasing competition resulting in a lower selling price.
		12)	South Company uses the perpetual inventory system. South's goods in transit at December 31 include:
			Sales made by South	Purchases made by South
			(1) FOB destination	(3) FOB destination
			(2) FOB shipping point	(4) FOB shipping point
			Which items should be included in South's inventory at December 31?
			a. (2) and (3)
			b. (1) and (4)
			c. (1) and (3)
			d. (2) and (4)
		13)	In periods of rising prices, the inventory method which results in the greatest net income is the:
		a.	LIFO method.
		b.	FIFO method.
		c.	Weighted Average method.
		d.	Lower of Cost or Market method.
		14)	The following information was available for Rawley Company at December 31, 2008:
			inventory (Jan .01) $80,000; inventory (Dec. 31) $120,000; cost of goods sold $600,000;
			accounts receivable $73,000; and sales $900,000.
			Rawley's inventory turnover in 2008 was:
		a.	9.00 times.
		b.	7.50 times.
		c.	6.00 times.
		d.	5.00 times.
		15)	A petty cash fund of $200 is replenished when the fund contains $5 in cash and receipts for $193.
		The entry to replenish the fund would:
		a.	credit Cash Over and Short for $2.
		b.	credit Miscellaneous Revenue for $2.
		c.	debit Cash Over and Short for $2.
		d.	debit Miscellaneous Expense for $2.
		16)	An item is considered material if
		a.	it doesn't costs a lot of money.
		b.	it is of a tangible good intended for re-sale.
		c.	it is likely to influence the decision of an investor or creditor.
		d.	the cost of reporting the item is greater than its benefits.
		17)	Receivables might be sold to
			a. lengthen the cash-to-cash operating cycle.
			b take advantage of deep discounts on the cash realizable value of receivables.
			c. generate cash quickly.
			d. finance companies at an amount greater than cash realizable value.
		18)	If the amount of uncollectible account expense is understated at year end:
		a.	net income will be understated.
		b.	stockholders' equity will be understated.
		c.	allowance for doubtful accounts will be overstated.
		d.	net accounts receivable will be overstated.
		19)	A debit balance in the Allowance for Doubtful Accounts
		a.	is the normal balance for that account.
		b.	indicates that actual bad debt write-offs have exceeded previous provisions for bad debts.
		c.	indicates that actual bad debt write-offs have been less than what was estimated.
		d.	cannot occur if the percentage of sales method of estimating bad debts is used.
		20)	Bad Debts Expense is considered
		a.	an avoidable cost in doing business on a credit basis.
		b.	an internal control weakness.
		c.	a necessary risk of doing business on a credit basis.
		d.	avoidable unless there is a recession.
		21)	The best managed companies will have
		a.	no uncollectible accounts.
		b.	a very strict credit policy.
		c.	a very lenient credit policy.
		d.	some accounts that will prove to be uncollectible.
		22)	Two methods of accounting for uncollectible accounts are the
		a.	allowance method and the accrual method.
		b.	allowance method and the net realizable method.
		c.	direct write-off method and the accrual method.
		d.	direct write-off method and the allowance method.
		23)	When the allowance method of accounting for uncollectible accounts is used, Bad Debts Expense is recorded
		a.	in the year after the credit sale is made.
		b.	in the same year as the credit sale.
		c.	as each credit sale is made.
		d.	when an account is written off as uncollectible.
		24)	Allowance for Doubtful Accounts on the balance sheet
		a.	is offset against total current assets.
		b.	increases the cash realizable value of accounts receivable.
		c.	appears under the heading "Other Assets."
		d.	is offset against accounts receivable.
		25)	In reviewing the accounts receivable, the cash realizable value is $14,000 before the write-off of a $1,500 account.
		What is the cash realizable value after the write-off?
		a.	$1,500
		b.	$12,500
		c.	$14,000
		d.	$15,500
		26)	The maturity value of a $60,000, 10%, 60-day note receivable dated July 3 is
		a.	$60,000
		b.	$61,000
		c.	$66,000
		d.	$70,000
		27)	The interest on a $10,000, 10%, 1-year note receivable is
		a.	$1,000
		b.	$10,000
		c.	$10,100
		d.	$11,000
		28)	The maturity value of a $60,000, 8%, 3-month note receivable is
		a.	$60,400
		b.	$60,480
		c.	$61,200
		d.	$64,800
		29)	Notes receivable are recorded in the accounts at
		a.	cash (net) realizable value.
		b.	face value.
		c.	gross realizable value.
		d.	maturity value.
		30)	Which of the following are also called trade receivables?
		a.	Accounts receivable
		b.	Other receivables
		c.	Advances to employees
		d.	Income taxes refundable