True or False: An advantage of FIFO is that it assigns the most recent costs to
ID: 2573969 • Letter: T
Question
True or False:
An advantage of FIFO is that it assigns the most recent costs to cost of goods sold, and does a better job of matching current costs with revenues on the income statement.
A properly designed internal control system is a key part of systems design, analysis, and performance.
An internal control system consists of the policies and procedures companies use to protect assets, ensure reliable accounting, promote efficient operations, and uphold company policies.
Technologically advanced accounting systems rarely need monitoring for errors because computers always process transactions correctly.
Separation of duties involves dividing responsibility for a transaction or a series of related transactions between two or more individuals or departments.
The Sarbanes-Oxley Act (SOX) requires managers and auditors of companies whose stock is traded on an exchange to document and certify the system of internal controls.
A receivable is an amount due from another party.
Credit sales are recorded by crediting Accounts Receivable.
The accounts receivable turnover indicates how often accounts receivable are received and collected during the period.
A high accounts receivable turnover in comparison with competitors suggests that the firm should tighten its credit policy.
The direct write-off method of accounting for bad debts records the loss from an uncollectible account receivable when it is determined to be uncollectible.
Explanation / Answer
1. An advantage of FIFO is that it assigns the most recent costs to cost of goods sold, and does a better job of matching current costs with revenues on the income statement. False These are benefits of LIFO.
2. A properly designed internal control system is a key part of systems design, analysis, and performance. True so that the internal audit and control is achieved simultaneously and smoothly.
3. An internal control system consists of the policies and procedures companies use to protect assets, ensure reliable accounting, promote efficient operations, and uphold company policies.True As per the difinition.
4. Technologically advanced accounting systems rarely need monitoring for errors because computers always process transactions correctly.False any system is prone to errors and thus needs monitoring .
5. Separation of duties involves dividing responsibility for a transaction or a series of related transactions between two or more individuals or departments.True
6. The Sarbanes-Oxley Act (SOX) requires managers and auditors of companies whose stock is traded on an exchange to document and certify the system of internal controls. True
7. A receivable is an amount due from another party. True (as a payable is amt due to other parties)
8. Credit sales are recorded by crediting Accounts Receivable. False Sales revenue is credited.
9. The accounts receivable turnover indicates how often accounts receivable are received and collected during the period. True
10. A high accounts receivable turnover in comparison with competitors suggests that the firm should tighten its credit policy. False
11. The direct write-off method of accounting for bad debts records the loss from an uncollectible account receivable when it is determined to be uncollectible. True
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