41.Inventory turnover measures the length of time it takes to acquire, sell, and replace the inventory.
a.True
b.False
42.In the retail inventory method, the cost to retail ratio is equal to the cost of merchandise sold divided by the retailprice of the merchandise sold.
a.True
b.False
43.Use of the retail inventory method requires taking a physical count of inventory.
a.True
b.False
44.If a fire destroys the merchandise inventory, the gross profit method can be used to estimate the cost ofmerchandise destroyed.
a.True
b.False
45.If a company uses a periodic inventory system, the gross profit method can be used to estimate inventory formonthly or quarterly statements.
a.True
b.False
46.Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the
a.customer's ledger
b.creditor's ledger
c.inventory ledger
d.purchase ledger
47.Which document authorizes the purchase of the inventory from an approved vendor?
a.the purchase order
b.the petty cash voucher
c.the receiving report
d.the vendor's invoice
48.The primary objectives of control over inventory are
a.safeguarding the inventory from damage and maintaining constant observation of the inventory
b.reporting inventory in the financial statements
c.maintaining constant observation of the inventory and reporting inventory in the financial statements
d.safeguarding inventory from damage and reporting inventory in the financial statements
49.Taking a physical count of inventory
a.is not necessary when a periodic inventory system is used
b.should be done near year-end
c.has no internal control relevance
d.is not necessary when a perpetual inventory system is used
50.Control of inventory should begin as soon as the inventory is received. Which of the following internal control stepsis
notdone to meet this goal?
a.check the invoice to the receiving report
b.check the invoice to the purchase order
c.check the invoice with the person who specifically purchased the item
d.check the invoice extensions and totals