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pi Cholce (Cont.) 7) The consi stency concept: A. Requi res a company to consistently apply the same accounting method of inventory financial reportinga change
pi Cholce (Cont.) 7) The consi stency concept: A. Requi res a company to consistently apply the same accounting method of inventory financial reportinga change from one method to another will improve its B. Requires a company to use one method of inventory valuation exclusivelymethods of C. Requires that all companies in the same industry use the same accounting inventory valuation. D. Is also called the full disclosure principle. 8) The full disclosure principle: A. Requires that when a change in inventory valuation method is made, the notes to statements report the type of change, its justification and its effect on net income Requires that companies use the same accounting method for inventory valuation period after period. C. Is not subject to the materiality principle D. Is only applied to retailers. 9) 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. All of these. 10) The principles of internal control include: A. Establish responsibilities B. Maintain minimal records. C. Use only computerized systems. D. Bond all employees. 11) Cash equivalents: A. Include savings accounts. B. Include checking accounts. C. Are short-term investments sufficiently close to their maturity date that their value is not sensitive to interest rate changes. D. Include time deposits. 12) 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 13) A promissory note received from a customer in exchange for an account receivable: A. Is a cash equivalent for the recipient. B. Is an account receivable for the recipient. C. Is a note receivable for the recipient. D. Is a short-term investment for the recipient
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