MATCHING
____ 1. Accelerated Depreciation
____ 2. Double Declining-Balance Method
____ 3. FIFO Method
____ 4. Internal Control System
____ 5. LIFO Method
____ 6. Periodic System
____ 7. Perpetual System
____ 8. Sarbanes-Oxley Act
____ 9. Straight-Line Method
____ 10. Time Value of Money
A. Policies and procedures necessary to ensure the safeguardingof an entityĆ¢ĀĀs assets, the reliability of its accounting
records, and theaccomplishment of overall company objectives..
B. An inventory costing method that assigns the most recentcosts to ending inventory.
C. An inventory costing method that assigns the most recentcosts to cost of goods sold.
D. The system in which the Inventory account is updated at theend of the period.
E. The system in which the Inventory account is increased at thetime of each purchase of merchandise and
decreased at the time of eachsale.
F. A method by which the same dollar amount of depreciation isrecorded in each year of asset use.
G. The concept that indicates that people should prefer toreceive an immediate amount at the present time over an
equal amount in the future.
H. An act of Congress in 2002 intended to bring reform to corporateaccountability and stewardship in the wake of a
number of major corporatescandals.
I. A term that refers to several methods by which a higheramount of depreciation is recorded in the early years of
an assetĆ¢ĀĀs life and a lower amount isrecorded in the later years.
J. A method by which depreciation is recorded at twice thestraight-line rate, but the depreciable balance is reduced
in each period.
SHORTANSWER
Please give a brief answer to each ofthe following questions.
1. 1.Why are shipping terms such asFOB shipping point or FOB destination point, important in decidingownership of inventory
at the end of the year?
2. 2. An effective system of internalcontrol is critical to protecting a companyĆ¢ĀĀs investment in threeof its major assets: cash,
accounts receivable, andinventory. For each of the three assets, describe briefly how acompany might protect that asset.
W 3. What is a cash equivalent? Whyis it included with cash on the balance sheet?
4. 4 Define the termgoodwill. Give an example of a transaction that wouldresult in the recording of goodwill on the balance
sheet.
5. 5 What is a contingent liability?Give an example of a contingent liability.
