The correct order of accounting steps is

1) 2) 3) 4)

25% 25%25%25%I. set policies, record, post, adjust

II. record, adjust, post, set policies

III. record, post, set policies, adjust

IV. post, record, adjust, set policies

In many manufacturing companies the first record in the record-keeping process is

1) 2) 3) 4)

25% 25%25%25%I. a process order

II. an invoice

III. a work order

IV. a purchase order

In order to obtain the raw materials needed to complete the manufacturing process the

company issues

1) 2) 3) 4)

25% 25%25%25%I. a process order

II. an invoice

III. a work order

IV. a purchase order

Companies tie purchase and payable records to

1) 2) 3) 4)

25% 25%25%25%I. cheques received from suppliers

II. cheques written to suppliers

III. invoices sent to customers

IV. transfers between departments within the company

Cash receipts complete the cycle

1) 2) 3) 4)

25% 25%25%25%I. order, payment, purchase, sale, collection

II. purchase, order, payment, sale, collection

III. sale,order, purchase, payment, collection

IV. order, purchase, payment, sale, collection

A medium of value which plays a relatively declining role in the receipt of payments is

1) 2) 3) 4)

25% 25%25%25%I. “hard cash” in the form of coins and banknotes

II. credit cards

III. direct debit

IV. EFT

Company documents that act as backups to the accounting system are

1) 2) 3) 4)

25% 25%25%25%I. (apart from company logos and addresses), completely standardised across the entire economy

II. standardised across industry

III. standardised by province

IV. not standardised by any of the above.

Accounting transactions are recorded

1) 2) 3) 4)

25% 25%25%25%I. on the orders of the chief accountant

II. on the basis of source documents

III. on the basis of economic policies

IV. on the basis of tax law

Internal control is the responsibility of the business’

1) 2) 3) 4)

25% 25%25%25%I. owners

II. managers

III. auditors

IV. regulators

When the financial scandal broke at WorldCom, a central issue was the CFO's

1) 2) 3) 4)

25% 25%25%25%I. competence

II. intelligence

III. ethics

IV. employee motivation policies

Rupert Inc. is concerned about theft in its warehouse, currently estimated at $4,000 per year. The company's chief security officer

proposes that the warehouse be fitted with security cameras and that two extra full-time security guards be employed. This is an example of

1) 2) 3) 4)

25% 25%25%25%I. an effective and efficient control system

II. an ineffective but efficient control system

III. an effective but inefficient control system

IV. an ineffective and inefficient control system

Separation of functions is

1) 2) 3) 4)

25% 25%25%25%I. an effective but possibly costly method of preventing fraud

II. an efficient way to encourage fraud

III. an ineffective but efficient way of preventing fraud

IV. none of the above

Accrual accounting

1) 2) 3) 4)

25% 25%25%25%I. is unrelated to internal control issues

II. provides very useful non-cash control accounts

III. can assist fraudsters because it obscures the true cash position

IV. makes it easy to forget slow-paying customers

Malcolm Inc. pays its employees gross wages $500 per week and deducts $125 on taxes, pension payments, etc.

The effect of the deductions is to

1) 2) 3) 4)

25% 25%25%25%I. increase the company's expenses by $125 per employee

II. reduce the company's expenses by $125 per employee

III. leave the company's expenses per employee unchanged

IV. have some other effect on company expenses

Sales taxes are

1) 2) 3) 4)

25% 25%25%25%I. a company expense

II. a company benefit

III. reflected in the company's accounting records but not in its financial statements

IV. recorded as remittances due to the company

Azkamp Ltd., a toymaker, discovers that its new "Singing Lumberjack" line is not selling well. The CFO decides that the market value of the inventory is $96,000 lower than its book value. The accounting entry to reflect this situation is

1) 2) 3) 4)

25% 25%25%25%I. Debit Sales Revenue $96,000 Credit Inventory $96,000

II. Debit Inventory $96,000 Credit Expenses $96,000

III. Debit Expenses $96,000 Credit Inventory $96,000

IV. no entry is needed

Accumulated amortization is

1) 2) 3) 4)

25% 25%25%25%I. the amount of cash saved up to replace the asset when it is worn out

II. the expense of operating the asset over the course of its life

III. a provision for the maintenance of the asset over its lifetime

IV. none of the above

Doubtful accounts receivable are normally estimated

1) 2) 3) 4)

25% 25%25%25%I. in the period after they become bad debts

II. in the period before they become bad debts

III. in the same period in which they become bad debts

IV. in most cases it is impossible to make estimates of doubtful accounts receivable

Perpetual inventories are written up

1) 2) 3) 4)

25% 25%25%25%I. only at the start of an accounting period

II. only at the end of the accounting period

III. continuously through the accounting period

IV. only when goods are sold

Mouse Ltd receives $4,000 worth of goods for resale. The company's inventory account

will

1) 2) 3) 4)

25% 25%25%25%I. record the event only if it uses

a perpetual inventory system

II. record the event whether it uses a perpetual or a periodic system

III. record the event only if it uses a periodic inventory system

IV. wait until the goods are sold before recording anything

Mouse Ltd sells $4,000 worth of goods for $7,500. The company's inventory account

will

1) 2) 3) 4)

25% 25%25%25%I. record the event only if it uses

a perpetual inventory system

II. record the event whether it uses a perpetual or a periodic system

III. record the event only if it uses a periodic inventory system

IV. wait until the goods are reordered before recording anything