Answer the following statements true (T) or false (F)
Indirect measures are usually preferable to direct measures because they are less costly to obtain.
ANSWER: F
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Under the percentage of sales method, when making the adjusting entry, you can ignore any balance in Allowance for Bad Debts
Indicate whether the statement is true or false
Which is correct?
a. Conwy Castle in Wales, built in the 13th century, is a World Heritage Site. b. Conwy Castle in Wales, built in the thirteenth century, is a World Heritage Site.
Which internal control procedure is a deterrent to corruption?
A. Use of prenumbered documents B. Physical controls C. Segregation of duties D. Fidelity bonding
A company is planning to raise $1,000,000 to finance a new plant. Which of the following statements is CORRECT?
A. The company would be especially eager to have a call provision included in the indenture if its management thinks that interest rates are almost certain to rise in the foreseeable future. B. If debt is used to raise the million dollars, but $500,000 is raised as first mortgage bonds on the new plant and $500,000 as debentures, the interest rate on the first mortgage bonds would be lower than it would be if the entire $1 million were raised by selling first mortgage bonds. C. If two classes of debt are used (with one senior and the other subordinated to all other debt), the subordinated debt will carry a lower interest rate. D. If debt is used to raise the million dollars, the cost of the debt would be lower if the debt were in the form of a fixed-rate bond rather than a floating-rate bond. E. If debt is used to raise the million dollars, the cost of the debt would be higher if the debt were in the form of a mortgage bond rather than an unsecured term loan.