Missed Acctg Questions Exam 3

At the year-end inventory count, if goods in transit are shipped FOB destination, they should be included in the inventory count of A.) the buyer B.) the seller C.) neither the buyer nor the seller D.) the shipping company

B

Tiger Rags uses a perpetual inventory system. Under the FIFO inventory costing method, what amount of Ending Inventory would be reported by the company at March 31st (the end of this month)? March 1: 25 units on hand at $2 each $50 March 4: Sold 20 units for $10 each $200 March 22: Purchased 130 units @ $4 each $520 March 26: Sold 120 Units @ $10 each $1,200 A.) $50 B.) $30 C.) $150 D.) $60

D

Which event prompted the following journal entry made by Brown Company? October 15: Accounts Payable Dr 4,000 Inventory Cr 40 Cash Cr 3,960 A.) Brown sold inventory for cash B.) Brown purchases inventory for cash C.) Brown collected cash for inventory sold on credit, and recognized a 1% sales discount D.) Brown paid for inventory purchased on credit, and took advantage of a 1% purchase discount

D

Which of the following procedures is not part of the preparation of a bank reconciliation for a checking account? a. Comparing canceled checks returned with the bank statement to the cash account to identify outstanding checks b. Looking for bank services charges and other items on the bank statement that have not yet been included in the cash account. c. Comparing deposits listed on the bank statement to the cash account to identify deposits in transit d. Reversing all the transactions recorded on the company's records that do not yet appear on the bank statement.

D

A good system of internal control requires that the physical custody of assets be separated from the accounting for those assets. This concept is known as safeguarding of assets and records. T/F?

False

No special internal control procedures are necessary with a petty cash fund because the amount is so small. T/F?

False

T/F An accounting system must be computerized in order to ensure the company has proper internal control.

False

T/F The stronger the system of internal control, the higher the accuracy of the company's accounting records and financial reports.

True

A best practice in an internal control system is to pay all amounts with a ________, because it provides a paper trail of the payment, which includes proof that the payment was made.

a check

Which of the following is not one of the five categories of control activities? a) segregation of duties b) clearly defined authority and responsibility c) checks on recorded amounts d)defalcation and financial reporting

d) defalcation and financial reporting

It is very important to understand that the petty cash account is only debited when you record the _______ of the petty cash fund. When the petty cash fund is _______, the accounts (ie. expense accounts) paid out of petty cash are debited.

establishment; replenished