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SECTION I: MULTIPLE-CHOICE (10 possible points) Please complete the following statements or questions by placing the appropriate letter in the blank adjacent to the item number. The value of each correct answer is 1 point. ____ 1. Which one of the following types of inventory accounts would be used by a wholesaler or retailer?

A. Raw materials inventory

B. Work in process inventory

C. Finished goods inventory

D. Merchandise inventory

____ 2. Which method assigns the same cost to all units whether sold or left in ending inventory?

A. Specific identification

B. Weighted average cost

C. FIFO

D. LIFO

____ 3. Which one of the following situations reflects a weak internal control system?

A. All employees are well supervised.

B. A single employee is responsible for comparing a receiving report to an invoice.

C. All employees must take their vacations.

D. A single employee is responsible for collecting and recording of cash.

____ 4. Having only one person authorized to both prepare and sign checks is a violation of what internal control procedure?

A. Segregation of duties

B. Independent review and appraisal

C. Independent verification

D. Proper authorizations

____ 5. Allowance for Doubtful Accounts represents:

A. Cash set aside to make up for bad debt losses

B. The amount of uncollectible accounts written off to date

C. The difference between total sales made on credit and the amount collected from those credit sales

D. The difference between the gross amount of accounts receivable and the net realizable value of accounts receivable

____ 6. Which one of the following is an investing activity on the statement of cash flows?

A. Collection of accounts receivable

B. Purchase of long-term investments

C. Receipt of interest

D. Receipt of dividends

____ 7. Assets classified as property, plant, and equipment are reported at.

A. each asset

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