Which of the following costs should be included in the inventory account when inventory is purchased FOB shipping point?
A) insurance while the merchandise is in transit
B) the cost of the warehouse
C) the advertising costs
D) the cost of merchandise returned
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Q. 2) According to the 2012 Report to the Nation on Occupational Fraud and Abuse, frauds are more likely to be detected by:
a. Audits
b. internal controls
c. Managers
d. Tips
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Q. 3) Alpha Company's bookkeeper decided to save time by accepting the cash balance shown on the bank statement as the company's correct ending cash balance each month. Explain to the bookkeeper why a monthly bank reconciliation should be prepared.
What will be an ideal response?
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Q. 4) Cash Sales from the cash register tapes totaled 882 . There is a change fund of 100 . The cash count indicates that 984 is in the cash drawer. What journal entry would be required?
a. debit Miscellaneous Expense for 2; credit Cash Short and Over for 2
b. debit Cash for 982, Cash Short and Over for 2; credit Revenues for 984
c. debit Cash Short and Over for 2; credit Miscellaneous Expense 2
d. debit Cash for 884; credit Revenues for 882, and Cash Short and Over for 2
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Q. 5) Which statement below best explains the credit terms of 2/10, n/30?
A) The buyer will receive a 2 percent discount if it pays within ten days of the purchase.
B) The buyer will receive a 10 percent discount if it pays within two days.
C) The buyer will receive a 10 percent discount if it pays within thirty days.
D) The buyer will receive a 2 percent discount if it pays within thirty days.
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Q. 6) The statement of owner's equity shows
a. only net income, beginning and ending capital
b. only total assets, beginning and ending capital
c. only net income, beginning capital, and withdrawals
d. beginning and ending capital and all the changes in the owner's capital as a result of net income (loss), and withdrawals
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