Student ID: 21993147

Exam: 061553RR - FOR MERCHANDISING

When you have completed your exam and reviewed your answers, click Submit Exam. Answers will not be recorded until you hit Submit Exam. If you need to exit before completing the exam, click Cancel Exam.

Questions 1 to 20: Select the best answer to each question. Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer.

1. register schemes are a form of A. management fraud. B. employee embezzlement. C. bribery. D. fraudulent financial reporting.

2. The ______method is used to estimate the cost of ending . A. gross profit B. average cost C. LIFO D. FIFO

3. When merchandise is sold under the perpetual system of inventory, the journal entry to record a sale of merchandise on account includes debiting ______and crediting ______. A. Accounts Receivable; Sales B. Accounts Receivable; C. Accounts Receivable; Inventory D. Cost of Goods Sold; Sales

4. A/An ______is used to determine the amount of inventory actually on hand at the end of the . A. footnote B. physical inventory count C. inventory layer D. inventory shrinkage

5. Under a perpetual inventory system, when goods are returned to a retailer from a customer, ______is debited and ______is credited. A. Cost of Goods Sold; Sales Returns and Allowances B. Inventory; Sales C. Sales; Cost Goods Sold D. Sales Returns and Allowances; Cost of Goods Sold

6. A method of valuing inventory based on the average of units is called the A. specific cost method. B. . C. LIFO method. D. FIFO method.

7. If there is a difference between the physical count and the perpetual record, the account in which the difference is recorded is the A. Inventory . B. . C. Cost of Goods Sold. D. Sales.

8. The cost of goods sold equals A. beginning inventory plus net purchases minus ending inventory. B. ending inventory plus net purchases minus beginning inventory. C. beginning inventory plus net sales minus ending inventory. D. beginning inventory minus net purchases plus ending inventory.

9. Which of the following is not part of the control environment? A. Having integrity and ethical values B. Having competent workers C. Having a leadership philosophy D. Assessing chances of fraud

10. If ending inventory in Period 1 is overstated, gross profit in Period 2 is A. the same as in Period 1. B. overstated. C. not affected. D. understated.

11. Fraudulent financial reporting typically involves A. management. B. the stockholders. C. the board of directors. D. employees.

12. An employee believes that getting away with fraud without being detected is likely. This best relates to which element of the fraud triangle? A. Perceived pressure B. Rationalization C. Perceived opportunity D. Realization

13. Under the perpetual inventory method, purchased goods are recorded to the A. Inventory account as a debit. B. Purchases account as a debit. C. Purchases account as a credit. D. Cost of Goods Sold account as a debit.

14. In order to pay the least income tax possible in periods of constant costs, the company should use which of the following inventory costing methods? A. LIFO B. Any method, as there is no effect on net income or taxes for the period if costs are constant. C. FIFO D. Average cost

15. If the replacement cost of inventory is less than its , the company will write down the inventory by A. increasing inventory and decreasing cost of goods sold. B. increasing inventory for replacement cost and decreasing inventory for historical cost. C. increasing cost of goods sold and decreasing inventory. D. making a note in the financial statements only.

16. Under the average cost method, the flow of costs through the accounting records will ______to the physical flow of goods through the business. A. be nearly opposite B. have no relationship C. exactly match D. match closely

17. Olympic Enterprises has the following inventory data:

Date Quantity Unit Cost June 1 Beginning inventory 5 $52 June 4 Purchase 10 $55 June 7 Sale 12 June 11 Purchase 9 $58 June 14 Sale 8

Assuming FIFO, what is the cost of goods sold for June 14? A. $464 B. $455 C. $440 D. $456

18. The factor that makes a person feel forced to steal money because of high medical bills is A. perceived pressure. B. realization. C. rationalization. D. perceived opportunity.

19. If a misstatement of inventory occurs, the net income for ______periods will be misstated. A. 0 B. 2 C. 3 D. 1

20. A company has net sales of $126,000, cost of goods sold of $72,000, operating of $38,000, and other expenses of $3,000. The company's net income is A. $54,000. B. $13,000. C. $16,000. D. $51,000.

End of exam