ACCY 201 EXAM QUESTIONS WITH
CORRECT ANSWERS
What are the two limitations of internal controls? - Answer- · Human Error
· Human Fraud
o Fraud Triangle (Opportunity, Pressure, and Rationalization
Cash - Answer- Currency, coins, and deposits in bank accounts. Also includes items
such as customer checks, cashier checks, certified checks, petty cash and money
orders.
Cash Equivalents - Answer- Short-term(Less than 6 Months), highly liquid investments
that are:
1. Readily convertible to a known cash amount.
2. Close to maturity date and not sensitive to changes.
Know the entries related to the Petty Cash Fund - Answer- · Establishing a Petty Cash
Fund
· Reimbursing a Petty Cash Fund
· Increasing or Decreasing a Petty Cash Fund
Gross Profit - Answer- Net Sales - COGS (Does not include operating expenses: Not
Net Income)
Cost of Goods Sold - Answer- term used for the expense of buying and preparing
merchandise for sale.
What are the 3 types of costs that buyers' must include in inventory? - Answer- 1. Costs
to purchase the inventory (any discounts, returns, allowances ↓ that cost)
2. Costs to acquire the inventory (cost to get it to me = shipping costs to receive NOT to
send)
3. Costs to prepare inventory for sale (finishing, other costs to get in sellable condition)
FOB Destination - Answer- Costs Not included in inventory - shipper owns in transit,
shipper responsible for shipping costs
FOB Shipping Point - Answer- Costs Included in inventory - buyer owns in transit, buyer
responsible for shipping costs
CORRECT ANSWERS
What are the two limitations of internal controls? - Answer- · Human Error
· Human Fraud
o Fraud Triangle (Opportunity, Pressure, and Rationalization
Cash - Answer- Currency, coins, and deposits in bank accounts. Also includes items
such as customer checks, cashier checks, certified checks, petty cash and money
orders.
Cash Equivalents - Answer- Short-term(Less than 6 Months), highly liquid investments
that are:
1. Readily convertible to a known cash amount.
2. Close to maturity date and not sensitive to changes.
Know the entries related to the Petty Cash Fund - Answer- · Establishing a Petty Cash
Fund
· Reimbursing a Petty Cash Fund
· Increasing or Decreasing a Petty Cash Fund
Gross Profit - Answer- Net Sales - COGS (Does not include operating expenses: Not
Net Income)
Cost of Goods Sold - Answer- term used for the expense of buying and preparing
merchandise for sale.
What are the 3 types of costs that buyers' must include in inventory? - Answer- 1. Costs
to purchase the inventory (any discounts, returns, allowances ↓ that cost)
2. Costs to acquire the inventory (cost to get it to me = shipping costs to receive NOT to
send)
3. Costs to prepare inventory for sale (finishing, other costs to get in sellable condition)
FOB Destination - Answer- Costs Not included in inventory - shipper owns in transit,
shipper responsible for shipping costs
FOB Shipping Point - Answer- Costs Included in inventory - buyer owns in transit, buyer
responsible for shipping costs
