Indicate how each event affects the elements of the financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter amounts. Increase = IDecrease = DNo Effect = NA(Note that "No Effect" means that the event either does not affect the element of the financial statements or that the event causes an increase in that element and is offset by a decrease in that same element.) Charles Company paid Jason Hewitt for work he performed as an independent contractor. The amount owed had not been previously accrued.AssetsLiabilitiesStk. EquityRevenuesExpensesNetStmt. of ?IncomeCash Flows???????
What will be an ideal response?
(D) (NA) (D) (NA) (I) (D) (D)
Independent contractors are not subject to payroll taxes. The payment to the independent contractor decreases assets (cash) and decreases stockholders' equity (retained earnings). It increases expenses (external labor expense), which decreases net income. It is reported as a cash outflow for operating activities on the statement of cash flows.
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Sarbanes-Oxley requires that the audit committee be composed of
a. At least 50% of key officers who are on the board of directors b. A majority of all of the members of the board of directors c. The outside members of the board of directors and the external auditor d. Entirely outside members of the board of directors
The anchoring and adjustment heuristic comes in to play when consumers base their predictions on the quickness and ease with which a particular example of an outcome comes to mind
Indicate whether the statement is true or false
Mirabella Company assigns direct materials, direct labor and both variable and fixed overhead to its product costs. Mirabella Company is using
A) absorption costing B) variable costing C) batch costing D) composite costing
The choice of costing method will impact both the balance sheet and income statement.
Answer the following statement true (T) or false (F)