In perpetual inventory systems, inventory errors commonly arise from careless oversight of physical counts.

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a.True

b.False

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Sarbanes-Oxley only applies to private companies.

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a.True

b.False

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If the ABC Company has three lots of products for sale, purchase 1 (earliest) for $20, purchase 2 (middle) for $15 and purchase 3 (latest) for $25, which cost would be assumed to be sold first using FIFO costing?

Select one:

a.$20

b.$15

c.$25

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____________________ is a special ledger that contains information about all vendors and the amounts we owe them.

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a.Accounts receivable subsidiary ledger

b.Accounts receivable control

c.Accounts payable subsidiary ledger

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Audit trail is step-by-step trail of evidence documenting the history of a transaction from its inception and all the steps it went through until its completion.

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a.True

b.False

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What are the important items in determining and recording depreciation?

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a.Balance sheet, Book value and Useful life

b.Book value, Useful life, Salvage (residual) value and Depreciable base (cost)

c.Salvage (residual) value and Depreciable base (cost) and Interest

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When a customer purchases a product or service on credit, using an in-house account, Accounts Receivable increases and Sales Revenue increases.

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a.True

b.False

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At what point does revenue recognition occur?

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a.When the company has met its obligation on a contract

b.When the seller receives the money for the job

c.When the purchaser makes payment

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The_______________measures how fast the inventory sells, which can be useful for inter-period comparison as well as comparisons with competitor firms.

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a.Number of days' sales in inventory ratio

b.Inventory turnover ratio

c.Liquidity Ratio

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What is the formula for the inventory turnover ratio?

Select one:

a.Average inventory / Cost of goods sold

b.Cost of goods sold / Average inventory

c.Neither A or B

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An employee for Five Steps, LLC brought $3,000 of inventory on the company's credit card. Which journal will the transaction be recorded in?

Select one:

a.Sales journal

b.Purchases journal

c.Cash disbursements journal

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What account is used when a customer pays for a product or service on a line of credit?

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a.Principal

b.Accounts Receivable

c.Accounts Payable

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Yellow Inc. reports year-end credit sales in the amount of $209,000 and accounts receivable of $163,000. The company uses the balance sheet method to report bad debt estimation. The estimation percentage is 2.9%. What is the estimated balance uncollectible using the balance sheet method?

Select one:

a.$4,727

b.$6,061

c.$372,000

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Double-declining-balance depreciation method is a method of depreciation that evenly splits the depreciable amount across the useful life of the asset.

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a.True

b.False

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A note's maturity date is the date at which the principal and interest become due and payable.

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a.True

b.False

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What is the formula for interest?

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a.Principal x Period of Time

b.Principal x Interest Rate x Period of Time

c.Interest Rate / Period of Time

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What are the three main methods to calculate depreciation?

Select one:

a.units-of-production method, valuation method and the accrual method

b.the straight-line method, units-of-production method and the accrual method

c.the straight-line method, units-of-production method and double-declining-balance method

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________________ refers to using the internet to access software and information storage facilities provided by companies rather than, or in addition to, storing this data on the company's computer hard drive or in paper form.

Select one:

a.Cloud computing

b.Quickbooks

c.Periodic Inventory System

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Companies are required to record bad debt on financial statements as expenses.

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a.True

b.False

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An operating cycle is the amount of time it takes a company to use its cash to provide a product or service and collect payment from the customer.

Select one:

a.True

b.False