Chapter 07 Accounting 26e Carl Warren James M Reeve Jonathan Duchac

Chapter 07 Accounting 26e Carl Warren James M Reeve Jonathan Duchac

Complete Chapter Questions With Answers

Sample Questions Are Posted Below

1. One of the two internal control procedures over inventory is to properly report inventory on the financial
   1. True
   2. False

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.07-01 – 07-01

ACCREDITING STANDARDS:   ACCT.ACBSP.APC.17 – Inventories Reporting

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

2. A purchase order establishes an initial record of the receipt of the inventory.
   1. True
   2. False

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.07-01 – 07-01

ACCREDITING STANDARDS:   ACCT.ACBSP.APC.17 – Inventories Reporting

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

3. A perpetual inventory system is an effective means of control over inventory.
   1. True
   2. False

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.07-01 – 07-01

ACCREDITING STANDARDS:   ACCT.ACBSP.APC.17 – Inventories Reporting

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

4. A subsidiary inventory ledger can be an aid in maintaining inventory levels at their proper levels.
   1. True
   2. False

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.07-01 – 07-01

ACCREDITING STANDARDS:   ACCT.ACBSP.APC.17 – Inventories Reporting

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

5. Safeguarding inventory and proper reporting of the inventory in the financial statements are the reasons for controlling the inventory.
   1. True
   2. False

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.07-01 – 07-01

ACCREDITING STANDARDS:   ACCT.ACBSP.APC.17 – Inventories Reporting

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic