21. Give the correct example of a kickback.A. Wyatt ate only cheap sandwiches during his business trip, but he claimed over $100 in food expenses to his company.B. A customer buys a DVD player, but Courtney does not record the transaction. Later, Courtney keeps the money for herself.C. Marcy understates her company’s unearned revenue in order to make the total revenue look more impressive.D. Ben gives his hardware salesman tickets to the football game. In exchange, the salesman gives Ben an unfairly low price on hardware.22. A/An _______ is used to determine the amount of inventory actually on hand at the end of the accounting period.A. inventory shrinkageB. inventory layerC. footnoteD. physical inventory count23. A company has net sales of $126,000, cost of goods sold of $72,000, operating expenses of $38,000, and other expenses of $3,000. The company’s net income isA. $16,000.B. $51,000.C. $54,000.D. $13,000.24. Kira says, “I found that Monotype Corporation’s financial statements don’t follow GAAP.” What type of audit opinion is this?A. UnqualifiedB. QualifiedC. DisclaimerD. Adverse26. Goods available for sale are $350,000; beginning inventory is $24,000; ending inventory is $32,000; and cost of goods sold is $275,000. What is the inventory turnover?A. 8.59B. 9.82C. 11.46D. 12.5025. The cost of goods sold equalsA. ending inventory plus net purchases minus beginning inventory.B. beginning inventory plus net sales minus ending inventory.C. beginning inventory minus net purchases plus ending inventory.D. beginning inventory plus net purchases minus ending inventory.27. Gordon the CPA says, “I am unable to give an opinion about the validity of this accounting information.” What kind of opinion is this?A. AdverseB. QualifiedC. UnqualifiedD. Disclaimer28. The major difference in the statement of retained earnings between a service business and a merchandising business isA. that the retained earnings statement of a merchandising business shows the Cost of Goods Sold.B. that the retained earnings statement of a service business includes Dividends.C. nothing. There are no differences between the two.D. that the retained earnings statement of a merchandising business includes Dividends.29. As it relates to accounting fraud, which of the following best describes perceived pressure?A. An employee’s justification of his or her actionsB. A need to obtain cash or other assetsC. Intentional misrepresentation of financial statementsD. The opportunity to commit and conceal fraud30. Cash register schemes are a form ofA. management fraud.B. fraudulent financial reporting.C. employee embezzlement.D. bribery.31. In the United States, GAAP’s overriding principles of accounting are written by theA. FASB.B. IRS.C. SEC.D. IASB.32. Under the average cost method, the flow of costs through the accounting records will _______ to the physical flow of goods through the business.A. match closelyB. exactly matchC. be nearly oppositeD. have no relationship33. Fraudulent financial reporting typically involvesA. the board of directors.B. management.C. employees.D. the stockholders.34. The factor that makes a person feel forced to steal money because of high medical bills isA. realization.B. perceived opportunity.C. perceived pressure.D. rationalization.35. If a misstatement of inventory occurs, the net income for _______ periods will be misstated.A. 2B. 0C. 3D. 136. In order to attract investors and borrow on attractive terms, a company would use ________ in times when inventory costs are rising.A. FIFOB. specific-identification costingC. average costingD. LIFO37. If ending inventory in Period 1 is overstated, gross profit in Period 2 isA. not affected.B. overstated.C. understated.D. the same as in Period 1.38. Lyman Company returned $750 of goods it had purchased from another company. The original invoice was for $4,200, 3/10, n/30. What is the discount if Lyman pays the balance within the discount period?A. $22.50B. $103.50C. $126.00D. $0.0039. Which of the following is not part of the control environment?A. Assessing chances of fraudB. Having integrity and ethical valuesC. Having a leadership philosophyD. Having competent workers40. What does GAAS stand for?A. General accounts and statusesB. Goals, accruals, audits, and standardsC. Goals, assessment activities, and statusesD. Generally accepted auditing standards41. Which type of audit opinion is also referred to as a clean opinion?A. AdverseB. DisclaimerC. UnqualifiedD. Qualified42. Beginning inventory plus net purchases equalsA. ending inventory.B. cost of goods available for sale.C. cost of goods sold.D. gross profit.43. In order to pay the least income tax possible in periods of constant costs, the company should use which of the following inventory costing methods?A. LIFOB. Average costC. Any method, as there is no effect on net income or taxes for the period if costs are constant.D. FIFO44. Olympic Enterprises has the following inventory data:Date Quantity Unit CostJune 1 Beginning inventory 5 $52June 4 Purchase 10 $55June 7 Sale 12 June 11 Purchase 9 $58June 14 Sale 8 Assuming FIFO, what is the cost of goods sold for June 14?A. $464B. $455C. $456D. $44045. If there is a difference between the physical count and the perpetual record, the account in which the difference is recorded is theA. Sales.B. Inventory Expense.C. Revenue.D. Cost of Goods Sold.46. FOB stands forA. freight on board.B. first over board.C. freight over balance.D. free on board.47. If an employee overbills a company for travel, this would be considered a/anA. expense scheme.B. cash register scheme.C. check tampering scheme.D. disbursement scheme.
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