Accounting 1: Exam 2
the account Cash Overage is which type of account
A miscellaneous revenue account
which of the following is a service company A. general motors B. H&R block C. the gap D. pro
B.
Assigning sequential numbers to cash sales, so that the accounting staff can ensure that every sale has been recorded is required by the internal control principle of:
documenting procedures
Cashiers at a supermarket have to talk to a manager before approving price changes at the register. Which internal control principle is being followed?
establish responsibilities
An attempt to deceive others for personal gain is known as:
fraud
all other things being equal a company is better off when its receivable turnover ratio is
high and its days to collect measure is low
Fraud Triangle
incentive, opportunity, rationalization
comparing the cash in the register with the cash count sheet is required by the internal control principle of
independently verifying
perpetual inventory system
inventory system that maintains a continual record of inventory purchased and sold
restrict access
limiting access to only those who need it to fulfill assigned responsibilities
Intel makes microchips from raw materials acquired from suppliers. Intel is a:
manufacturer
carrying insufficient quantities of inventory on hand
may result in lost sales
the receivable turnover ratio
measures how many times, on average, the process of selling and collecting is repeated during the period
Gross profit equals
net sales - cost of goods sold
days to collet measures
number of days it takes to collect accounts receivable
document procedures
prepare documents to show activities that have occurred
an account used in periodic inventory system that is not used in the perpetual inventory system is
purchases
which method will result in the same cost of goods sold amount whether it is computed using the periodic inventory system or the perpetual inventory system.
FIFO
periodic inventory system
Inventory system that periodically adjusts for purchases and sales of inventory at the end of the reporting period based on a physical count of inventory on hand
primary goals of inventory management
Maintain a sufficient quantity of inventory to meet customers' needs Ensure quality meets customers' expectations and company standards Minimize the costs of acquiring and carrying the inventory
Intrest Receivable
asset
establish responsibility
assign each task to only one employee
an example of the internal control principle of establishing responsibility is
assigning each cash drawer to only one person
independently verify
check others work
to make it easier for financial statement users to compare account balances from one period to the next, companies report
consistent financial statements
A strong system or internal ______ reduces the ______ to commit fraud
controls opportunity
categories of employee fraud
corruption, asset misappropriation, financial statement fraud
Assigning responsibility
so that a employee can't make a mistake or commit a dishonest act without being discovered
a company buys footwear and clothing from manufactures, which it resells to discount stores in a large urban area. This company is an example of
wholesale merchandising company