Questions:

1)Internal auditors

A)evaluate the system of internal controls for the companies that employ them.

B)are hired by CPA firms to audit business firms.

C)cannot evaluate the system of internal controls of the company that employs them because they are not independent.

D)are employees of the Canada Revenue Agency who evaluate the internal controls of companies filing tax returns.

2)When customers make purchases with a bank credit card, the retailer

A)receives cash equal to the full price of the merchandise sold from the credit card company.

B)is responsible for maintaining customer accounts.

C)is not involved in the collection process.

D)absorbs any losses from uncollectible accounts.

3)Gross profit for a merchandising concern is net sales minus

A)operating expenses.

B)cost of goods available for sale.

C)sales returns and allowances.

D)cost of goods sold.

4)Vaughn Company recently made a $19800 purchase from a major supplier. Shipping costs were $420, terms FOB destination point. To record this purchase, Vaughn Company will need to debit the

A)Cost of Goods Sold account for $20220.

B)Cost of Goods Sold account for $420.

C)Merchandise Inventory account for $20220.

D)Merchandise Inventory account for $19800.

5)One advantage of a debit card is that the retailer knows immediately whether the customer has enough money in their account to pay for the transaction.

A)True

B)False

6)A petty cash fund is generally established in order to

A) make loans internally to employees.

B)pay employees wages.

C)pay for all merchandise purchased on account.

D)pay relatively small expenditures.