1.Which of the following would probably not cause inventory shrinkage?
2.Goods available for sale are $350,000; beginning inventory is $24,000; ending inventory is $32,000; and
cost of goods sold is $275,000. The inventory turnover is
3.Which items may not limit the effectiveness of internal control systems in an organization?
4.The balance sheet format that lists assets above liabilities is the _______ form.
5.Isaiah Sporting Goods uses the perpetual average cost method of determining inventory costs. Below is
the inventory record for Product C124:
Date Received Sold Cost/Unit Balance
April 22 534 $6.58 $3,513.72
May 17 433 $6.70 $2,901.10
June 21 389 $6.76 $2,629.64
August 2 436 $6.44 $2,807.84
6.Meranda Corporation purchases $3,500 of inventory on account from Ashley Corporation. The journal
entry to record this purchase for Meranda under a perpetual inventory system is
7.If current assets decrease and current liabilities increase, the current ratio
8.Net sales times the historical gross profit percentage yields the estimated
9.When a merchandiser sells on account, which of the following is not needed to record the transaction?
10.The major difference in the statement of retained earnings between a service business and a
merchandising business is
11.Committing a fraud because the employee feels that it will be easy to do is indicative of which part of
the fraud triangle?
12.A company’s gross profit percentage decreases from 58% to 51%. What does this mean?
13.Casey Company’s beginning inventory and purchases during the fiscal year ended December 31, 2012,
were as follows: (
Note: The company uses a perpetual system of inventory.)
What is the cost of goods sold for Casey Company for 2012 using LIFO?
Units Unit Price Total Cost
January 1â€”Beginning Inventory 20 $12 $240
March 8â€”Sold 14
April 2â€”Purchase 30 $13 $390
June 5â€”Sold 25
Aug 6â€”Purchase 25 $14 $350
Sept 11â€”Sold 22
Total Cost of Inventory $980
Ending inventory is 14 units.
14.Which of the following may not limit the effectiveness of internal control systems in an organization?
15.ABC Corporation pays an invoice for $350 in time to take a 3% discount. The journal entry to record
the payment of this invoice is
16.In a balance sheet prepared in report form, liabilities must be listed after
17.Under a perpetual inventory system, the account to which transportation charges on incoming
merchandise is generally entered is
18.Which of the following is an incorrect statement if ending inventory is understated?
19.To overstate earnings, a company can
20.Physical inventory counts must be done