15. If net sales decrease and cost of goods sold increases, the gross profit percentage

A. increases.

B. will change based upon the change in total assets.

C. decreases.

D. remains the same.

16. Which of the following is not part of the control environment?

A. Having integrity and ethical values

B. Assessing chances of fraud

C. Having a leadership philosophy

D. Having competent workers

17. ABC Corporation pays an invoice for $350 in time to receive a 3% discount. The journal entry for the payment of this invoice is debit Accounts Payable

A. $340 and credit Cash $340.

B. $340, debit Inventory $10, and credit Cash for $350.

C. $350 and credit Cash $350.

D. $350, credit Inventory $10.50, and credit Cash for $339.50.

18. As it relates to accounting fraud, which of the following best describes perceived pressure?

A. An employee's justification of his or her actions

B. Intentional misrepresentation of financial statements

C. The opportunity to commit and conceal fraud

D. A need to obtain cash or other assets

19. A company has net sales of $126,000, cost of goods sold of $72,000, operating expenses of $38,000, and other expenses of $3,000. The company's net income is

A. $54,000.

B. $16,000.

C. $13,000.

D. $51,000.

20. A new car lot would probably cost its inventory using the _______ method of inventory costing.

A. LIFO

B. specific-identification

C. moving average

D. FIFO