1) A properly designed internal control system is a key part of systems design, analysis, and performance. *

1 point

True

False

2) Internal control policies and procedures are standard across companies. *

1 point

True

False

3) Internal control over cash receipts ensures that all cash received is properly recorded and deposited. *

1 point

False

True

4) The petty cash fund should be reimbursed at the end of the period even if the fund is not low on money. *

1 point

True

False

5) Damaged goods are not counted in inventory if they cannot be sold. *

1 point

True

False

6) A business that has inventory items that are ordinarily interchangeable may use either the FIFO or moving weighted average methods to assign costs to inventory. *

1 point

True

False

7) An advantage of the moving weighted-average method is that it tends to smooth out price changes. *

1 point

True

False

8) In a period of inflation, FIFO usually gives a lower taxable income and thus a tax advantage. *

1 point

False

True

9) The FIFO method assumes that costs for the most recently purchased items are recovered first. *

1 point

True

False

10) The consistency principle means that one costing method, such as FIFO or moving weighted average, has to be used exclusively. *

1 point

False

True

11) A merchandiser earns profit by buying and selling merchandise. *

1 point

True

False

12) A service company earns profit by buying and selling merchandise. *

1 point

False

True

13) Gross profit is also called gross margin. *

1 point

True

False

14) Cost of goods sold represents the cost of buying and preparing merchandise for sale. *

1 point

True

False