1. The correct order of accounting steps is I.set policies, record, post, adjust II.record, adjust, post, set policies III.record, post, set policies, adjust IV.post, record, adjust, set policies

2. In many manufacturing companies the first record in the record-keeping process is I.a process order II.an invoice III.a work order IV.a purchase order

3. In order to obtain the raw materials needed to complete the manufacturing process the company issues I.a process order II.an invoice III.a work order IV.a purchase order

4. Companies tie purchase and payable records to I.cheques received from suppliers II.cheques written to suppliers III.invoices sent to customers IV.transfers between departments within the company

5. Cash receipts complete the cycle I.order, payment, purchase, sale, collection II.purchase, order, payment, sale, collection III.sale,order, purchase, payment, collection IV.order, purchase, payment, sale, collection

6. A medium of value which plays a relatively declining role in the receipt of payments is I.hard cash in the form of coins and banknotes II.credit cards III.direct debit IV.EFT

7. Company documents that act as backups to the accounting system are 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.

8. Accounting transactions are recorded 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

9. Internal control is the responsibility of the business I.owners II.managers III.auditors IV.regulators

10. When the financial scandal broke at WorldCom, a central issue was the CFO's I.competence II.intelligence III.ethics IV.employee motivation policies

11. 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 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

12. Separation of functions is 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

13. Accrual accounting 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

14. 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 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

15. Sales taxes are 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

16. 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 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

17. Accumulated amortization is 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

18. Doubtful accounts receivable are normally estimated 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

19. Perpetual inventories are written up 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

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

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