A common measure of profitability is the
a. asset turnover.
b. debt to equity ratio.
c. current ratio.
d. receivable turnover.
A
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Which of the following is a condition required by the SEC for the recognition of revenue?
a. Completion of goods manufactured b. Execution of a promissory note c. Price in excess of $100 d. Reasonable assurance of collection
Which of the following statements is true of negligence by an accountant?
A. It is not necessary to notify an appropriate person in management if an accountant has a basis for suspicion of fraud. B. The traditional defenses of contributory negligence and comparative negligence can apply in a negligence action against an accountant. C. The investigative techniques used by accountants will always uncover the fraud of a skillful and careful crook. D. The failure of an accountant to discover fraud by the client's employees or others is in itself proof of negligence by the accountant.
Cost behavior analysis is not useful to a service business
Indicate whether the statement is true or false
Lockhart Products produces a single product. During 2012 the company incurred the following costs: Variable product costs $8.00 per unit Variable period costs $2.00 per unit Total fixed product costs $21,000 Total fixed period costs $10,000 Lockhart had no units in beginning inventory. During 2012, 6,000 units were produced and 5,000 units were sold. Which of the following statements is true when
comparing net operating income using absorption versus variable costing? A) Net operating income will be $3,500 higher using absorption costing than using variable costing. B) Net operating income will be $3,500 lower using absorption costing than using variable costing. C) Net operating income will be $4,200 higher using absorption costing than using variable costing. D) Net operating income will be $4,200 lower using absorption costing than using variable costing.