This document provides homework questions and answers for ACC 556 at Strayer University covering topics like inventory, internal controls, accounts receivable, and financial statements. It includes 20 multiple choice questions on inventory costing methods, internal controls, bank reconciliations, and notes receivable. The document provides links to additional homework, discussions, and case studies for the course.

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ACC 556 WEEK 3 HOMEWORK CHAPTER 6
• Question 1
Raw materials inventories are the goods that a manufacturing company has completed and are
ready to be sold to customers.
• Question 2
Goods held on consignment should be included in the consignor’s ending inventory.
• Question 3
If a company has no beginning inventory and the unit cost of inventory items does not change during
the year, the value assigned to the ending inventory will be the same under LIFO and average cost
flow assumptions.
• Question 4
The LIFO method is rarely used because most companies do not sell the last goods they purchase
first.
• Question 5
The FIFO reserve is a required disclosure for companies that use FIFO.
• Question 6
Manufactured inventory that has begun the production process but is not yet completed is
• Question 7
Which of the following should not be included in the physical inventory of a company?
• Question 8

2. At December 31, 2014 Howell Company’s inventory records indicated a balance of $858,000. Upon
further investigation it was determined that this amount included the following:
• $168,000 in inventory purchases made by Howell shipped from the seller 12/27/14 terms FOB
destination, but not due to be received until January 2nd
• $111,000 in goods sold by Howell with terms FOB destination on December 27th. The goods are
not expected to reach their destination until January 6th.
• $9,000 of goods received on consignment from Westwood Company
What is Howell’s correct ending inventory balance at December 31, 2014?
• Question 9
Noise Makers Inc has the following inventory data:
July 1 Beginning inventory 20 units at $19 $ 380
7 Purchases 70 units at $20 1,400
22 Purchases 10 units at $22 220
$2,000
A physical count of merchandise inventory on July 30 reveals that there are 32 units on hand. Using
the average cost method, the value of ending inventory is
• Question 10
Inventory costing methods place primary reliance on assumptions about the flow of
• Question 11
Many companies use just-in-time inventory methods. Which of the following is not an advantage of
this method?
• Question 12
Which of the following statements is correct with respect to inventories?
• Question 13
In periods of rising prices, which is an advantage of using the LIFO inventory costing method?
• Question 14

3. Jenks Company developed the following information about its inventories in applying the lower of
cost or market (LCM) basis in valuing inventories:
Product Cost Market
A $57,000 $60,000
B 40,000 38,000
C 80,000 81,000
If Jenks applies the LCM basis, the value of the inventory reported on the balance sheet would be
• Question 15
Selection of an inventory costing method by management does not usually depend on
• Question 16
Which statement concerning lower of cost or market (LCM) is incorrect?
• Question 17
Use the following information regarding Black Company and Red Company to answer the question
“Which of the following is Red Company's "cost of goods sold" for 2014 (to the closest dollar)?”
Year Inventory Turnover Ratio Ending Inventory
Black Company 2012 $26,340
2013 10.7 $29,890
2014 10.2 $30,100
Red Company 2012 $25,860
2013 9.0 $24,750
2014 9.5 $22,530
• Question 18

4. A low number of days in inventory may indicate all of the following except
• Question 19
The LIFO reserve is
• Question 20
Match the items below by entering the appropriate code letter in the space provided.
o
Question Selected Match
Merchandise Inventory F.
Goods ready for sale to customers by retailers and wholesalers.
Work in process B.
Goods that are only partially completed in a manufacturing company.
FOB shipping point A.
Title to the goods transfers when the public carrier accepts the goods from the seller.
FOB destination C.
Title to goods transfers when the goods are delivered to the buyer.
Specific identification method D.
Tracks the actual physical flow for each inventory item available for sale.
First-in, first-out (FIFO) method G.
Ending inventory valuation consists of the most recent inventory purchases.
Last-in, first-out (LIFO) methodI.
Cost of goods sold consists of the most recent inventory purchases.
Average cost method J.
The same unit cost is used to value ending inventory and cost of goods sold.
LIFO reserve E.
The difference between inventory reported using LIFO and inventory using FIFO.

5. Inventory turnover ratioH.
Measures the number of times the inventory sold during the period.
o
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6-Question-1-Raw-mater-33577
ACC 556 WEEK 4 DISCUSSION 1
"Internal Controls" Please respond to the following:
• Imagine that a coworker wants to circumvent an internal control to steal money from your
company. Speculate on two (2) internal controls that your coworker might attempt to circumvent in
order to steal the money. Recommend two (2) actions that the company could take in order to
prevent the theft.
• Outline an anti-fraud program that you would implement at your company (current or
previous). Suggest the approach you would take to sell this program to your senior executives.
Provide a rationale for your response.
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Controls-Please-r-33581
ACC 556 WEEK 4 HOMEWORK CHAPTER
• Question 1
The most important element of the fraud triangle is rationalization.
• Question 2
Requiring employees to take vacations is a weakness in the system of internal controls because it
does not promote operational efficiency.

6. • Question 3
Under an effective system of internal control, errors occur only as a result of fraud or dishonesty.
• Question 4
1 out of 1 points
Control over cash disbursements is improved if major expenditures are paid by check.
• Question 5
Cash equivalents are highly liquid investments that can be converted into a specific amount of cash.
• Question 6
Which of the following is not one of the main factors that contribute to fraudulent activity?
• Question 7
Under the concept of establishment of responsibility, how many people should have the ultimate
responsibility?
• Question 8
A consequence of separation of duties is that
.• Question 9
In large companies, the independent internal verification procedure is often assigned to
• Question 10
Sam’s Grocery Store has the following policy. ‘Only one cashier can have access to a cash drawer.’
Which internal control principle supports this policy?
• Question 11
Supervisors counting cash receipts daily is an example of
• Question 12
1 out of 1 points
Blank checks

7. • Question 13
All of the following are true regarding bank statements except
Selected Answer: the bank statement balance will always agree with the company
recorded balance.
• Question 14
Which of the following would be added to the balance per bank on a bank reconciliation?
• Question 15
Notification by the bank that a deposited customer check was returned NSF requires that the
company make the following adjusting entry:
• Question 16
Clark Company developed the following reconciling information in preparing its September bank
reconciliation:
Cash balance per bank, 9/30 $30,800
Note receivable collected by bank 16,800
Outstanding checks 25,200
Deposits in transit 12,600
Bank service charge 210
NSF check 3,360
Using the above information, determine the cash balance per books (before adjustments) for the
Clark Company.
• Question 17
1 out of 1 points
Of the following employees, who should prepare the bank reconciliation?
• Question 18
1 out of 1 points

8. In the month of May, Lopat Company Inc. wrote checks in the amount of $55,500. In June, checks in
the amount of $75,948 were written. In May, $50,808 of these checks were presented to the bank for
payment, and $65,298 in June. What is the amount of outstanding checks at the end of May?
• Question 19
All of the following are true regarding the management and monitoring of cash except
• Question 20
Match the items below by entering the appropriate code letter in the space provided.
o
Question Selected Match
Prenumbered documents F.
Prevent a transaction from being recorded more than once.
Custody of an asset should be kept separate from the record-keeping for that asset J.
Segregation of duties.
Television monitors, garment sensors and burglar alarms are examples L.
Physical control devices.
Bonding employees H.
Insurance protection against misappropriation of assets.
Collusion M.
Two or more employees circumventing prescribed procedures.
Cash N.
Anything that a bank will accept for deposit.
Cash budget G.
A projection of anticipated cash flows.
Restricted cash I.
Cash that is not available for general use, but instead is restricted for a particular purpose.
Invest idle cash D.

9. A basic principle of cash management.
Canceled checks K.
Checks which have been paid by the depositor's bank.
NSF checks E.
Checks which have been returned by the maker's bank for lack of funds.
Outstanding checks B.
Issued checks that have not been paid by the bank.
Petty cash receipt C.
Document indicating the purpose of a petty cash expenditure.
Cash equivalents A.
Highly liquid investments.
o
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Question-1-The-most-33586
ACC 556 WEEK 5 DISCUSSION 1
"Accounts Receivable Management" Please respond to the following:
• Examine the five (5) steps to managing accounts receivable. Speculate on the step that is
most vulnerable to fraud. Suggest at least two (2) actions that a company can take in order to protect
this step from fraud.
• Imagine that your company has tasked you with developing a plan for factoring accounts
receivables. Create one (1) scenario that demonstrates the key benefits and / or detriments to your
company from factoring accounts receivable.
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Accounts-Receivable-Manageme-33628

10. ACC 556 WEEK 5 HOMEWORK CHAPTER 8
• Question 1
An aging of accounts receivable schedule is based on the premise that the longer the period an
account remains unpaid, the greater the probability that it will eventually be collected.
• Question 2
Allowance for Doubtful Accounts is a contra account that is deducted from Accounts Receivable on
the balance sheet.
• Question 3
Under the allowance method, Bad Debt Expense is debited when an account is deemed
uncollectible and must be written off.
• Question 4
-month, 10 percent, $10,000 note is calculated by multiplying $10,000
• Question 5
If a company has significant concentrations of credit risk, it must discuss this risk in the notes to its
financial statements.
• Question 6
Interest is usually associated with
• Question 7
On January 15, Nifty Company sells merchandise on account to Martinez Associates for $3,000 with
terms 3/10, n/30. On January 20, Martinez returns merchandise worth $600 to Nifty. On January 24,
payment is received from Martinez for the balance due. What is the amount of cash received?
• Question 8
The expense recognition
• Question 9
Which one of the following is not a principle of sound accounts receivable management?

11. • Question 10
Bad Debt Expense is considered
• Question 11
When an account is written off using the allowance method, the
• Question 12
All of the following statements regarding the financial statement presentation of receivables are true
except:
• Question 13
Which of the following is not true regarding a promissory note?
• Question 14
The bookkeeper recorded the following journal entry
Allowance for Doubtful Accounts 1,000
Accounts Receivable – Richard James 1,000
Which one of the following statements is false?
• Question 15
The direct write-off method is acceptable for financial reporting purposes only if the bad debt losses
are insignificant.
• Question 16
When calculating interest on a promissory note with the maturity date stated in terms of days, the
• Question 17
The interest on a $4,000, 9%, 90-day note receivable is
• Question 18
Which of the following is a way of disposing of a note receivable?
• Question 19
The accounts receivable turnover
• Question 20

12. o
Question Selected Match
Aging the accounts receivable H.
Analysis of customer account balances by length of time they have been unpaid.
Direct write-off method A.
Bad debt losses are not estimated and no allowance account is used.
Trade receivables B.
Notes and accounts receivable that result from sales transactions.
Accounts receivable turnover G.
A measure of the liquidity of receivables.
Percentage of receivables basis C.
Emphasizes expected cash realizable value of accounts receivable.
Promissory note F.
A written promise to pay a specified amount on demand or at a definite time.
Dishonored note E.
A note which is not paid in full at maturity.
Cash net realizable value D.
The net amount expected to be received in cash.
Credit card sales I.
Sales that involve the customer, the retailer, and the credit card issuer.
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8-Question-1-An-agin-33635
ACC 556 WEEK 5 MIDTERM 1

13. • Question 1
Bathlinks Corporation has a debt to assets ratio of 73%. This tells the user of Bathlinks’s financial
statements that
• Question 2
An aging of accounts receivable schedule is based on the premise that the longer the period an
account remains unpaid, the greater the probability that it will eventually be collected.
• Question 3
Which of the following is not a common way that managers use the balance sheet?
• Question 4
Owners of business firms are the only people who need accounting information.
• Question 5
Solvency ratios measure the short-term ability of the company to pay its maturing obligations.
• Question 6
Expense recognition is tied to revenue recognition.
• Question 7
A concentration of credit risk is a threat of nonpayment from a single customer or class of customers
that could adversely affect the financial health of the company.
Selected Answer: True
Correct Answer: True
• Question 8
Lankston Company began the year by issuing $90,000 of common stock for cash. The company
recorded revenues of $825,000, expenses of $720,000, and paid dividends of $45,000. What was
Lankston’s net income for the year?
• Question 9
Source documents can provide evidence that a transaction has occurred. •
Question 10
The partnership form of business organization
• Question 11

14. The best definition of assets is the
resources belonging to a company that have future benefit to the company. Question 12
Financing activities include the purchase or sale of long-lived assets or the purchase or sale of
investment securities.
• Question 13
Which of the following would not be classified as a long-term liability?
• Question 14
Marvin Services Corporation had the following accounts and balances:
Accounts payable $18,000 Equipment $21,000
Accounts receivable 3,000 Land 21,000
Buildings ? Unearned service revenue 6,000
Cash 9,000 Total stockholders' equity ?
If the balance of the Buildings account was $45,000 and the equipment was sold for $21,000, what
would be the total of stockholders' equity?
• Question 15
Requiring employees to take vacations is a weakness in the system of internal controls because it
does not promote operational efficiency.
• Question 16
The economic resources that are owned by a business are called stockholders’ equity.
• Question 17
To obtain maximum benefit from a bank reconciliation, the reconciliation should be prepared by the
employee authorized to sign checks.
• Question 18
The revenue recognition principle dictates that revenue be recognized in the accounting period in
which the performance obligation is satisfied.
• Question 19

15. Consistent use of the same accounting principles and methods is necessary for meaningful analysis
of trends within a company.
• Question 20
Which of the following is the least likely consideration that management uses when deciding whether
to pay a dividend?
• Question 21
Management may choose any inventory costing method it desires as long as the cost flow
assumption chosen is consistent with the physical movement of goods in the company.
• Question 22
Goods that have been purchased FOB destination but are in transit, should be excluded from a
physical count of goods by the buyer.
• Question 23
The multiple-step income statement is considered more useful than the single-step income
statement because it highlights the components of net income.
• Question 24
An advantage of using the periodic inventory system is that it requires less record keeping than the
perpetual inventory system.
• Question 25
Use the following data to calculate the current ratio.
Carne Auto Supplies
Balance Sheet
December 31, 2014
Cash $ 35,000 Accounts payable $ 65,000
Accounts receivable 50,000 Salaries and wages payable 10,000
Inventory 70,000 Mortgage payable 90,000
Prepaid insurance 40,000 Total liabilities $165,000

16. Stock investments 80,000
Land 95,000
Buildings $100,000 Common stock $120,000
Less: Accumulated Retained earnings 250,000
depreciation (30,000) 85,000 Total stockholders’ equity $370,000
Trademarks 70,000 Total liabilities and
Total assets $535,000 stockholders’ equity $535
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Bathlinks-Corpor-33647