1. At Insignia Services, the accounting clerk fills out unnumbered purchase order forms for purchases of supplies. An operations engineer completes the form with a detailed description of the supplies being ordered, and the operations manager approves the purchase and passes the purchase order back to the accountant for processing. In the above situation, which internal control procedure needs strengthening?a) separation of dutiesb) documentsc) assignment of responsibilitiesd) competent, reliable, and ethical personnel2) The two basic sources of stockholders’ equity are ________.a) loans from banks and gifts from donorsb) common stock and preferred stockc) paid- in capital and retained earningsd) common stock and bonds3. The times – interest – earned ratios of Benin Inc. are 20.56 and 7.35 for the years 2013 and 2014, respectively. Which of the following can be the possible reason for such a change?a) Benin Inc. incurred less debt specifically in its revolving line of creditb) Benin Inc.’s debt – paying ability increasedc) Benin Inc. incurred more debt specifically in it revolving line of creditd) Benin Inc. paid less interest in its revolving line of credit 4. REVIEW THE FOLLOWING STEPS IN THE ACCOUNTING CYCLE AND ANSWER THE QUESTIONS BELOW:1.What is the first step?a) analyze and journalize transactions as they occurb) post to the accountsc) prepare the unadjusted trial balanced) start with the beginning account balances2. Are any steps optional?a) completing the worksheet b) no steps arec) posting to the account isd) preparing the adjusted trial balance is3. Which steps are completed throughout this period?a) Journalizing the transactions and preparing the financial statementsb) Journalizing and posting the closing entriesc) Journalizing the transactions and posting to the accountsd) Journalizing and posting the adjusting entries4.Which steps are completed only at the end of the period?a) Completing the worksheet, preparing the financial statement, and closing the accountb) Posting the accounts, preparing the financial statement, and closing the accountc) Adjusting the accounts, preparing the financial statement, and closing the accountd) none of the above5. What is the last step in the accounting cycle?a) journalize and post the closing entriesb) prepare the adjusted trial balancec) prepare the financial statementd) prepare -closing trial balance5. Ross Corporation reported the following equity section on its current balance sheet:Common stock, $5 par, 200,000 shares authorized, 160,000 shares issued ($800,000)Paid in capital in excess of par-common ($200,000)Retained earnings ($207,000)Total stockholder’s equity ($1,207,000)Which of the following would be included in the entry to record the corporations purchase of 100,000 shares of its common stock for $7.50 per share?a) Paid- in capital from treasury stock transactions would be credited for$700,000b) treasury stock- common would be debited for $750,000c) common stock- $5 par value would be credited for $500,000d) retained earnings would be would be debited for $750,0006. If bonds with a face value of $200,000 are sold at 105, the amount of cash proceeds is ________.a) $210,000b) $190,476c) $209,523d) $200,0007.MATCH THE ACCOUNTING TERMINOLOGY TO THEIR DEFINITIONS:1. An inventory system that requires businesses to obtain a physical count of inventory to determine quantities on hand2. Expenses, other than Cost of Gold Sold, that are incurred in the entity’s major line of business3. Excess of Net Sales Revenue over the Cost of Goods Sold4. the cost of merchandise inventory that the business has sold to customers5. the individual or business from whom a company purchase goods6. an inventory system that keeps a running computerized record of merchandise inventory.