acc unit 2

Question 1

Which of the following is NOT an internal control activity for cash?

Answer 1

Recordkeeping and physical custody of cash should be performed by the same person

Question 2

A traditional definition of internal control specifically includes all of the following except

Answer 2

maintenance of a clean and safe work place

Question 3

Jane manages the physical inventory in the warehouse and also the accounting records. what is being violated

Answer 3

segregation of duties

Question 4

all of the following are inventory costing methods except

Answer 4

periodic

Question 5

when applying the lower- of cost- or- market rule to inventory valuation, market means

Answer 5

replacement cost

Question 6

the lower-cost- or market method of accounting for inventories follows the convention of

Answer 6

conservatism

Question 7

in a period of rising prices, which inventory method is best to use to reduce income taxes by reducing net income?

Answer 7

LIFO

Question 8

the interest on a 3 month, 12% , $6,000 note receivable is

Answer 8

180

Question 9

when the FIFO method is used ending inventory is assumed to consist of

Answer 9

most recently purchased

Question 10

under the perpetual inventory system, in addition to making the entry to record a sale, a company would

Answer 10

increase cost of goods sold and decrease merchandise inventory

Question 11

what does not represent a sale

Answer 11

merchandise that is placed aside for a customer to pick up later

Question 12

the collection of a $400 account within the 2% discount period would result in

Answer 12

increase to sales discount for $8

Question 13

if a company erroneously records a $500 deposit as a $50 in its records, what must occur when reconciling its bank rec

Answer 13

the company must increase the balance per its records by $450

Question 14

what would be deducted from the balance per bank

Answer 14

outstanding checks

Question 15

on a bank rec, interest earned on a checking account should

Answer 15

added to the balance per books

Question 16

which of the following items on a bank rec would require a journal entry?

Answer 16

a bank service charge

Question 17

the account Allowance for Uncollectible Accounts is classified as

Answer 17

contra account to ACC Recievable

Question 18

the matching rule related to credit losses by stating that Bad Debt expense should be recorded

Answer 18

in the same time as revenue is

Question 19

merchandise inventory becomes part of costs of goods sold when a company

Answer 19

sells the inventory

Question 20

under the allowance method, the entry to write off a $1,425 uncollectable account includes

Answer 20

a debit to allowance for doubtful accounts for $1425

Question 21

the collection of a $1,000 account after the 2% discount ends would result in

Answer 21

decrease to Acc Receivable for $1,000

Question 22

Which internal control activity is followed when inventory storage areas are secured with limited access?

Answer 22

Safe quaking of assets and records

Question 23

Which of the following journal entries is recorded as a result of the bank rec process to record an NSF check

Answer 23

ACC REC 250

Cash 250

Question 24

what approach for the allowance procedure emphesizes matching bad debt expense with rev on the IS

Answer 24

the % of net credit sales approach

Question 25

what statement is true regarding the 2 allowance procedures used to estimate bad debt?

Answer 25

The aging of acc receivable method

Question 26

which of the following is not included in cash and cash equivalents on BS

Answer 26

a bank certificate of deposit for a year