When using a perpetual inventory system, the entry to journalize the cost of goods sold is

debit Cost of Goods Sold and credit Inventory

No entry is made to journalize the cost of goods sold.

debit Cost of Goods Sold and credit Sales

debit Inventory and credit Cost of Goods Sold

During times of rising prices, which of the following is not an accurate statement?

d. LIFO will result in higher income taxes than FIFO.

a. FIFO will result in a higher net income than LIFO.

b. Weighted average costing will yield results that are between those of FIFO and LIFO.

c. LIFO will result in a higher cost of goods sold than FIFO.

Days' sales in inventory measures the

d. number of days inventory is on hand prior to sale

a. length of time it takes to acquire and receive payment for inventory

b. number of days inventory takes to arrive after ordering

c. length of time it takes to acquire, sell, and replace inventory

During a period of falling prices, which of the following inventory methods generally results in the lowest balance sheet amount for inventory?

a. cannot determine without more information

d. weighted average cost method

For each of the following statements, indicate the inventory system (perpetual or periodic) to which it relates. a. This system can be costly and time consuming if not computerized. b. With this system, the weighted average cost method uses a "moving average." c. Under this system, only revenue is recorded when sales are made. d. When using this system, a physical inventory is necessary to determine cost of goods sold

perpetual, perpetual, periodic, periodic

periodic, periodic, perpetual, perpetual

perpetual, periodic, perpetual, periodic

periodic, perpetual, periodic, perpetual

Sarbanes-Oxley applies to

a. not-for-profit organizations

Which of the following is not an element of internal control?

d. information and communication

When a firm uses internal auditors, it is adhering to which of the following internal control elements?

a. information and communication

d. proofs and security measures

The objectives of internal control include which of the following?

b. provide reasonable assurance that assets are safeguarded and used for business purposes, business information is accurate, and laws and regulations are complied with

a. provide control over "internal-use only" reports and employee internal conduct

c. prevent fraud and promote the social interest of the company

d. control the internal organization of the Accounting Department personnel and equipment

The debit balance in Cash Short and Over at the end of an accounting period is reported as

d. miscellaneous expense on the income statement

a. an asset on the balance sheet

b. revenue on the income statement

c. a liability on the balance sheet

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. This item would be included on the bank reconciliation as a(n)

c. addition to the balance per the company's records

a. deduction from the balance per the company's records

b. addition to the balance per the bank statement

d. deduction from the balance per the bank statement

A bank reconciliation should be prepared periodically because

d. any differences between the company's records and the bank's records should be determined, and any errors made by either party should be discovered and corrected

a. the bank has not recorded all of its transactions

b. the company's records and the bank's records are in agreement

c. the bank must make sure that its records are correct

The bank reconciliation

c. is part of the internal control system

a. should be prepared by an employee who records cash transactions

b. is for information purposes only

d. is sent to the bank for verification

A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. This item would be included in the bank reconciliation as a(n)

a. addition to the balance per the company's records

b. deduction from the balance per the bank statement

c. deduction from the balance per the company's records

d. addition to the balance per the bank statement

The amount of the outstanding checks is included on the bank reconciliation as a(n)

a. deduction from the balance per bank statement

b. deduction from the balance per company's records

c. addition to the balance per bank statement

d. addition to the balance per company's records

The amount of cash to be reported on the balance sheet at June 30 is

b. the adjusted balance appearing on the bank reconciliation for June 30

a. the balance as of June 30 on the bank statement

c. the balance in the cash account before reconciliation

Which of the following would be subtracted from the balance per company’s records on a bank reconciliation?

c. error by the company in recording a check for $732 as $723

A bank reconciliation should be prepared

c. to explain any difference between the balance per company's records with the balance per bank

a. whenever the bank refuses to lend the company money

d. by the person who is authorized to sign checks

final review part 1

Authored by dafne vargas

Other

University

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112 questions

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MULTIPLE CHOICE QUESTION

2 mins • 1 pt

If the cost of an item of inventory is $49 and the current replacement cost is $67, the amount included in inventory according to the lower of cost or market is

116

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

During the taking of its physical inventory on December 31, 20Y4, Barry's Bike Shop incorrectly counted its inventory as $209,760 instead of the correct amount of $161,198. The effect on the balance sheet and income statement would be

assets overstated by $48,562; retained earnings understated by $48,562; and net income statement understated by $48,562

assets overstated by $48,562; retained earnings understated by $48,562; and no effect on the income statement

assets, retained earnings, and net income all overstated by $48,562

assets and retained earnings overstated by $48,562; and net income understated by $48,562

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

Which of the following measures the relationship between cost of goods sold and the amount of inventory carried during the period?

fixed asset turnover

gross profit method of inventory costing

inventory turnover

retail method of inventory costing

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

A perpetual inventory system is an effective means of control over inventory.

true

false

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

The choice of an inventory costing method has no significant impact on the financial statements.

True

false

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

Under the periodic inventory system, the inventory account continuously discloses the amount of inventory on hand.

true

false

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

During periods of increasing costs, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet that is higher than LIFO would produce.

true

false

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final review part 1

If the cost of an item of inventory is $49 and the current replacement cost is $67, the amount included in inventory according to the lower of cost or market is

During the taking of its physical inventory on December 31, 20Y4, Barry's Bike Shop incorrectly counted its inventory as $209,760 instead of the correct amount of $161,198. The effect on the balance sheet and income statement would be

Which of the following measures the relationship between cost of goods sold and the amount of inventory carried during the period?

A perpetual inventory system is an effective means of control over inventory.

The choice of an inventory costing method has no significant impact on the financial statements.

Under the periodic inventory system, the inventory account continuously discloses the amount of inventory on hand.

During periods of increasing costs, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet that is higher than LIFO would produce.

The use of the lower-of-cost-or-market method of inventory valuation increases net income for the period in which the inventory replacement price declined.

All of the following are documents used for inventory control except a

Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the

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