Jack's firm manufactures a cleansing product that has been quite successful in the market, but they just can't
manufacture them fast enough to keep up with the demand. Therefore, Jack needs to find a way to ramp up
production—and fast—or his firm will lose out to his competitors. Which of the following is the best advice for
Jack?
a. Fund the purchase of increased production capacity with owners' equity, thereby ensuring control andminimizing risk.
b. Fund the purchase of increased production capacity by taking on debt—this will allow the firm to have alower net income through tax deductions, as well as allowing Jack's firm to hold on to more cash.
c. Fund the purchase of increased production capacity by selling stock. This is the best way to ensureshareholder value is maximized by building a strong corporate identity.
d. Fund the purchase of increased production capacity by selling unused assets. This will purge the company ofthe fat it needs to shed in order to remain competitive.
b
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The ________ begins with sales representatives and dealers sending orders to the firms and is followed by the sales department preparing invoices, and finally generating shipping and billing documents
A) payroll system B) market research process C) human resources system D) expense cycle E) order-to-payment cycle
According to study of financial statement frauds by the Committee of Sponsoring Organizations (COSO), who is the most common perpetrator of financial statement fraud?
a. Chief Executive Officer b. Chief Financial Officer c. Chief Operating Officer d. Finance Controller
The Sarbanes-Oxley Act is intended to provide protection where oversight did not previously exist.
Answer the following statement true (T) or false (F)
Wolf Industries plant operates five days per week with a daily payroll of $50,000. Employees are paid every Saturday for the work week just completed (Monday through Friday). The last day of the month is Wednesday, May 31. The correct adjusting entry at May 31 is
A) Wages Expense 50,000Wages Payable 50,000 B) Wages Payable 50,000Cash 50,000 C) Wages Expense 150,000Cash 150,000 D) Wages Expense 150,000Wages Payable 150,000