When revenue is earned before the receipt of cash, an adjustment that increases a receivable and decreases a liability account is recorded
a. True
b. False
Indicate whether the statement is true or false
False
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Indicate whether each of the following statements is true or false. (Assume a perpetual inventory system.)________ a) The freight terms FOB shipping point increase the cost of inventory to the buyer.________ b) The term FOB means that goods are shipped free of charge to buyer and seller.________ c) FOB shipping point means that the purchaser's responsibility ends at freight point.________ d) FOB destination means that the seller's responsibility ends at destination.________ e) When the seller of merchandise records freight under the terms FOB shipping point, the seller records an expense.
What will be an ideal response?
Which of the following principles best describes the current method of accounting for research and development costs?
a. Immediate recognition as an expense b. Systematic and rational allocation c. Income tax minimization d. Associating cause and effect
A properly designed internal control system:
A. Is not necessary if the company uses a computerized system. B. Lowers the company's risk of loss. C. Requires the use of non-computerized systems. D. Eliminates the need for an audit. E. Insures profitable operations.
In responding to a retail audit, management needs to be aware that the audit may have been conducted by one person who has judged retail activities at one point in time
Indicate whether the statement is true or false