When McDonald's makes an advertising claim that the company offers the best-tasting hamburgers, the practice is known as:
A) a code of ethics violation
B) misleading and deceptive advertising
C) puffery
D) cross-promotions
C
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If payables turnover has increased significantly since the prior year, this is an indication that which of the following assertions for accounts payable might be violated?
A. Valuation and allocation. B. Completeness. C. Rights and obligations. D. Existence or occurrence.
Which of the following errors will cause a trial balance to be out of balance?
a. Posting a debit to Land as a debit to Machinery b. Placing a debit balance amount into the credit balance column of the ledger c. Omitting an entire transaction d. Incorrectly recording the purchase of land for cash as a debit to Cash and a credit to Land
Which accounting convention requires a note to the financial statements explaining the company's method of revenue recognition?
A) Comparability and consistency B) Materiality C) Conservatism D) Full disclosure
A. Butcher Timber Company hired your consulting firm to help them estimate the cost of equity. The yield on the firm's bonds is 6.75%, and your firm's economists believe that the cost of equity can be estimated using a risk premium of 3.85% over a firm's own cost of debt. What is an estimate of the firm's cost of equity from retained earnings?
A. 10.60% B. 9.54% C. 12.19% D. 12.51% E. 7.95%