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KellyV2012
KellyV2012, Bachelor's Degree
Category: Multiple Problems
Satisfied Customers: 308
Experience:  BS in Business Administration: Options in Accounting & Finance
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1. A low gross profit percentage means that A. general and

Resolved Question:

1. A low gross profit percentage means that
A. general and administrative expenses are very high.
B. the cost of goods sold was relatively low.
C. selling expenses are very low.
D. the cost of goods sold was relatively high.
2. When a merchandiser sells on account, which of the following is not needed to record the transaction?
A. Accounts receivable
B. Cash
C. Cost of goods sold
D. Inventory
3. Which of the following is an incorrect statement if ending inventory is overstated?
A. Gross profit is overstated.
B. Income tax is overstated.
C. Net income is overstated.
D. Cost of goods sold is overstated.
4. Under Sarbanes-Oxley, those officers signing off on the reports must have evaluated the company's
internal control within the previous
A. nine months.
B. six months.
C. 90 days.
D. year.
5. Besides using an overstatement of earnings to inflate a company's stock price, overstating earnings may
also be used to
A. avoid paying raises to employees.
B. deflate the amount of taxes the corporation pays.
C. avoid paying dividends to stockholders.
D. ensure larger bonuses to upper management at year-end.
6. Which of the following would probably not cause inventory shrinkage?
A. Employee theft
B. Spills of items
C. Correct counting of all inventory
D. Spoilage of items
7. Which of the following may not limit the effectiveness of internal control systems in an organization?
A. Costs not worth benefits
B. Poorly designed controls
C. Duties not segregated
D. Understanding of policies and procedures
8. A company's current ratio increased from 1.23 to 1.45. What does this mean?
A. This means that current assets increased and current liabilities decreased.
B. This means that current assets increased and current liabilities increased.
C. This means that current assets decreased and current liabilities decreased.
D. There isn't enough information to explain the increase.
9. 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 ending inventory of Casey Company for 2012 using FIFO?
Units Unit Price Total Cost
January 1—Beginning Inventory 20 $12 $240
March 8—Sold 14
April 2—Purchase 30 $13 $390
June 5—Sold 25
Aug 6—Purchase 25 $14 $350
Total Cost of Inventory $980
Ending inventory is 14 units.
A. $168
B. $196
C. $182
D. $175
10. 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
What is the average cost per unit after the receipt of the May 17 inventory (rounded to the nearest cent)?
August 2 436 $6.44 $2,807.84
A. $6.63
B. $6.55
C. $7.40
D. $6.00
11. Isaiah Sporting Goods uses the perpetual average cost method of determining inventory costs. Below is
the inventory record for Product C124:
What is the average cost per unit after the receipt of the June 21 inventory?
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
A. $6.62
B. $6.61
C. $6.72
D. $6.67
12. Bill's Bikes had sales for the week of $3,569, of which $2,900 was on credit and $659 was in cash
sales. The cost of the bikes sold was $1,888. The journal entries would include a
A. debit to Cash for $3,569; credit to Cost of Goods Sold for $3,569.
B. debit to Cash for $3569; credit to Sales for $3,569.
C. debit to Cost of Goods Sold for $1,888; credit to Sales of $1,888.
D. debit to Cost of Goods Sold for $1,888; credit to Inventory for $1,888.
13. To overstate earnings, a company can
A. overstate expenses and overstate revenue.
B. overstate receivables and understate payables.
C. understate unearned revenue and understate property, plant, and equipment.
D. understate expenses and understate revenue.
14. Physical inventory counts must be done
A. regardless of method inventory.
B. when using the periodic method of inventory.
C. when using the perpetual method of inventory.
D. when using bar-code scan technology.
15. Which of the following is an incorrect statement if ending inventory is understated?
End of exam
A. Gross profit is overstated.
B. Net income is understated.
C. Income tax is understated.
D. Cost of goods sold is overstated.
16. Committing a fraud because the employee feels that it will be easy to do is indicative of which part of
the fraud triangle?
A. Realization
B. Perceived opportunity
C. Perceived pressure
D. Rationalization
17. A company's gross profit percentage decreases from 58% to 51%. What does this mean?
A. This means that there will be a net loss.
B. We can't determine anything definite from the information given.
C. This means that net income will be lower.
D. This means that net income will be higher.
18. Committing a fraud because the employee feels "I deserve a pay raise. The company owes this to me"
is indicative of which part of the fraud triangle?
A. Perceived pressure
B. Perceived opportunity
C. Rationalization
D. Realization
19. 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
A. 8.59.
B. 12.50.
C. 9.82.
D. 11.46.
20. A drawback to using _______ when inventory costs are rising is that the company reports lower net
income.
A. average costing
B. specific-identification costing
C. LIFO
D. FIFO
Submitted: 2 years ago.
Category: Multiple Problems
Expert:  KellyV2012 replied 2 years ago.

Hi,

 

Please download the answers below.

 

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Thanks,

KellyV2012, Bachelor's Degree
Satisfied Customers: 308
Experience: BS in Business Administration: Options in Accounting & Finance
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