Study Guide for Chapter 7

Which type of inventory might a service provider report? Select one: O O O O a. raw materials b. work-in-process c. finished goods d. two or more of a, b, and c. e. a service provider never reports inventory Check

How does the procedure for determining inventory requirements differ between a basic batch-processing system and batch processing with real-time data input of sales and receipts of inventory? What about for the procedures the receiving department uses?

Internal control is strengthened when the quality of merchandise orderd is omitted from the copy of the purchase order sent to which depertement? a. Department that initited the requisition b. Receiving department c. purchasing agent d. account payable department

Some accountants argue that the receiving department should be eliminated from inventory ordering method. what are the objectives of eliminating the receiving function. What accounting/audit problems need to be resolved?

Which of the following is not a reason for the physical inventory count to differ from what isrecognized on the company’s books?A. mismanagementB. shrinkageC. damageD. sale of services to customers

Which of the following procedure is designed to prevent the company from ordering unnecessary items? A. Periodic counts of inventory and reconciliaton of counts to inventory records B. Using approved suppliers C. Requiring purchasing agents to disclose any financial investments in potential suppliers D. Approval of purchase requisitions

Which of the following expenditure cycle tasksshould not be separated?a. Purchasing inventory items and updating inventory subsidiary ledgerb. Storing inventory in the warehouse and updating inventory subsidiary ledgerc. Updating accounts payable records and posting to the cash disbursements journald. All of the above should be separatede. None of the above need to be separated

A cost accounting system uses which of the following inventory systems? a.perpetual system b.periodic system c.a hands-on system d.both a periodic and perpetual system

Which of the following statements best explains the relationship between the acquisition/payment process and the sales/collection process? Group of answer choices   A. The same transaction can be considered part of both processes.   B. All organizations that have a sales/collection process also have an inventory acquisition/payment process.   C. Both the same transaction can be considered part of both processes and all organizations that have a sales/collection process also have an inventory acquisition/payment process.   D. Neither the same transaction can be considered part of both processes nor all organizations that have a sales/collection process also have an inventory acquisition/payment process.

How does analyzing inventory errors is helpful?

Define Inventory Turnover?  Explain what the results mean and provide an example.

Describe some inventory control systems that are used in practice