Multiple Choice:

1. Which one of the following is not an objective of a system of internal controls?
   1. Safeguard company assets
   2. Overstate expenses in order to be conservative
   3. Enhance the accuracy and reliability of accounting records
   4. Ensure compliance with laws and regulations

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2. Internal control is defined, in part, as a plan that safeguards
   1. all statement of financial position accounts.
   2. assets.
   3. liabilities.
   4. equity.

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3. Which of the following control activities is not relevant when a company uses a computerized (rather than manual) accounting system?
   1. Establishment of responsibility.
   2. Segregation of duties.
   3. Independent internal verification.
   4. All of these control activities are relevant to a computerized system

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3. If beginning inventory is $610,000, cost of goods purchased is $2,500,000, and ending inventory is $540,000, cost of goods sold is:

a. $2,570,000.

b. $2,410,000.

c. $1,960,000.

d. $3,110,000.

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5. In a period of rising prices, the inventory method which tends to give the highest reported inventory is
   1. FIFO.
   2. moving average.
   3. specific identification.
   4. weighted-average.