EXAM

Question 1

Consignor

Answer 1

Owner of the goods who gave them to be sold elsewhere

Question 2

Consignee

Answer 2

Sells the goods for the consignor

Question 3

Net Realizable Value

Answer 3

Sales price - cost of making sale

Question 4

Replacement cost

Answer 4

Current cost of purchasing an item

Question 5

Market Value

Answer 5

Net realizable value OR current replacement cost

Question 6

Internal

Answer 6

Production

Question 7

Internal

Answer 7

AIS

Question 8

External

Answer 8

Customers

Question 9

External

Answer 9

Suppliers

Question 10

Control Standard

Answer 10

Requires AIS to have internal controls to monitor and control activities

Question 11

Relevance Standard

Answer 11

Requires AIS to report useful, understandable, timely and pertinent info for effective decision making

Question 12

Compatibility Standard

Answer 12

Requires that an AIS suits a company’s activities, personnel and structure

Question 13

Flexibility Standard

Answer 13

Requires an AIS to be able to adapt to changes in the company, environment and needs of decision makers

Question 14

Cost-Benefit Standard

Answer 14

For each component in an AIS, the benefits must outweigh the costs

Question 15

Sales Journal

Answer 15

Recording sales made on account

Question 16

Cash Receipts Journal

Answer 16

Recording receiving cash

Question 17

Purchases Journal

Answer 17

Recording purchases on account

Question 18

Cash Disbursement Journal

Answer 18

Recording paying cash

Question 19

General Journal

Answer 19

Recording transactions not in special journals

Question 20

Cheque Register

Answer 20

Another name for cash disbursements journal when their is a column for cheque numbers

Question 21

Columnar Journal

Answer 21

A journal with more than 1 column

Question 22

Controlling account

Answer 22

A general ledge account, the post posting trial balance equals the sum of the balances of the accounts in the related subsidiary ledger

Question 23

Cross foot

Answer 23

To add debit and credit column totals and compare the totals for equality

Question 24

Gross Profit Ratio

Answer 24

Gross profit / net sales

Question 25

Merchandise Turnover

Answer 25

COGS / Average Merch. Inventory

Question 26

Days’ Sales in Inventory

Answer 26

Ending inventory / COGS * 365

Question 27

Ending Inventory @ retail

Answer 27

Goods available for sale @ retail - Net Sales @ retail

Question 28

Cost to retail ratio

Answer 28

Goods available for sale @ cost / Goods available for sale @ retail