Question

5.A discount merchandiser is likely to have a higher inventory turnover than more upscale stores with higher merchandise prices.

True or False

6. Segregation of duties in an organization should be required to reduce the likelihood of theft.

true or false

7.When a company receives payment from a customer whose account was previously written off, the customer's account should be reinstated.

true or false

8.The cost of natural resources includes the purchase price, as well as exploration costs and surveys.

true or false

Answer 1

5
Ans - True
Discount merchandiser aims at increasing sales by offering lower prices whereas Upscale stores have high prices to justify quality, style and convenience. Therefore Discount merchandiser are likely to have high inventory turnover

6
Ans - True
In a company, if one person handles all cash related duties such as receipt of cash, recording in books etc then chances of theft are high. Segregation ensures that one person is never in full control of all activities so that it acts as a moral check on them as because due to segregation, one employee is able to check the work done by another employee. This reduces the likelihood of theft

7
Ans - True
When a company deems an account to be a bad debt than such debtor is written off but if in future the bad debt becomes recoverable, then two things are done. Firstly the entry to write off the respective debtor is reversed to reinstate the debtor and then cash received entry is done against such reinstated debtor.

8
Ans - True
Natural resources are basically raw materials or inputs used in production purpose. Their costs will include charges that were paid to acquire such natural resources and with such acquisition, additional costs that were incurred to explore and survey will also be included into the Natural resources account.

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