In accordance with the consistency principle holds that companies should use the same accounting methods and procedures in each accounting period, so that the information provided will help investors and creditors to compare a company’s financial statements from one period to the next. The correct choice is A.

The journalizing and posting process has five steps:
Step 1: Identify the accounts and the account types (asset, liability, or equity).
Step 2: Decide whether each account increases or decreases and then apply the rules of debits and credits.
Step 3: Record the transaction in the journal.
Step 4: Post the journal entry to the ledger.
Step 5: Determine whether the accounting equation is in balance.

Cash ratio is a measure of a company’s ability to pay current liabilities from cash and cash equivalents. The correct answer is E.

Pressure, opportunity, and rationalization.

The materiality concept states that a company must perform strictly proper accounting only for significant items.2 Information is significant (material in accounting terms) when it would cause someone to change a decision. The most important point about this concept is to understand what is significant or material.

The correct answer is B.

Perpetual Inventory System is a system of tracking and recording inventory and costs of goods sold on a continual basis, so current inventory balance can be calculated on real time basis, and the accounting system can display the current inventory balance at any point in time.

The correct answer is B.

The correct answer is question E. A, B and D are a control activities. Option C can be considered as the identification of risks from the internal control components. 

Separation of duties means dividing responsibilities between different people to prevent fraud and errors. Generally, smart management separates custody of assets, record keeping and authorization of transactions. In this context, the accounting department should be separated from all other operating departments. For example, a sales person who may have some premium from total sales shouldn’t approve or journalize the sales transactions. Likewise, in some cases, if a person is responsible for protecting some assets, he/she shouldn’t have any responsibility about the accounting process The correct answer is B.

These companies purchase the goods that are ready to be sold and sell them to generate revenue.

Receivable is an accounting term associated with the amounts that are owed to the business by other parties, mainly its customers. These are basically the claims that are likely to be acquired in future. These claims stem from selling goods or services on credit. Receivables can also arise when someone lends money to another person. Let’s assume that your friend needs 200 TL cash to buy something. He borrows 200 TL on June 1st and promises to pay it back at the end of the month. You give up cash and, instead, agree with a 200 TL receivable from your friend. The receivable is an asset, but it is not as liquid as cash. A is the right answer.

Periodic Inventory System is an inventory system which relies upon physical count of the inventory to determine the ending inventory balance and cost of goods sold. In other words, no effort is made to keep up-todate records of either the inventory or cost of goods sold, physical count of inventory is made at specific intervals. B is the right answer.

The left-hand side is called as debit side, and the righthand side is called as credit side. Having debits on the left and credits on the right is an accounting custom, or rule. This rule applies to all accounts.

An error is an unintentional misrepresentation of some items. But, a    fraud is an intentional misrepresentation of something.

Managers, employees and partners are users of internal accounting information. Government, creditors, investors and customers are users of external information.

A business should report the least favorable figures in the financial statements when
two or more possible options are presented according to the conservatism concept
requirements. The correct choice is D.

Conservatism in accounting means being careful in reporting items in the financial statements. Conservatism follows these ideas: 
• Anticipate no gains, but provide for all probable losses.
• If in doubt, record an asset the lowest reasonable amount and reliability at the highest reasonable amount.
• When there is a question, record an expense rather than an asset.
• When you are faced with a decision between two possible options, you must choose the option that undervalues, rather than overvalues, your business

E is the right answer.

A voucher is a formal document which authorizes a cash payment.

The formula that is used to calculate COGS is:
COGS = Beginning Inventory + Purchases – Ending Inventory

In income statement are sales returns, sales discount and sales allowances  shown. The correct answer is option B.

Manufacturing companies, have three types of inventories: (i) raw materials inventory, which includes materials and parts purchased to be used in production, (ii) work-in-process inventory, which are the products that are not completed as of the end of accounting period and (iii) finished goods inventory, which are the completed products available to be sold. The correct choice is E.