b. Is determined by comparing a physical count of inventory with recorded inventory amounts c. Is recognized by debiting Cost of Goods Sold. d. Can be caused by theft or deterioration. e. All of the above. Costs included in the Merchandise Inventory account can include all of the following EXCEPT: a. damaged inventory that cannot be sold. b. storage. c. invoice price minus any discount. d. insurance. 20 e. transportation-in. An internal control system consists of the policies and procedures managers use to a. Protect assets. b. Ensure reliable accounting c. Promote efficient operations. d. Urge adherence to company policies. e. All of the above. 21. During a period of steadily rising prices (costs), the inventory valuation method that yields the lowest reported net income is a. Specific identification method. b. Average cost method. c. Weighted-average method. d. FIFO method. e. LIFO method. 22 Another name for a temporary account is a(n) Contra account b. Accrued account. Real account Balance column account. 23. a c. d. e. Nominal account. An income statement account that is used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is titled the a. Cash Lost account. b. Bank Reconciliation account. c. Petty Cash account. d. Cash Over and Short account e. Cash Receivable account 24. An analysis that explains any differences between the checking account balance according to the 25. depositor's records and the balance reported on the bank statement is a(n) a. Internal audit. b. Bank reconciliation. c. Bank audit d. Trial reconciliation. e Analysis of debits and credits