During a performance review discussion, Simone stated that she "could not evaluate Bob too highly." Brenda interpreted Simone's comments as favorable, but Stan believed she was indicating low performance. Simone's statement illustrates the problem of
A. intuition.
B. bounded rationality.
C. groupthink.
D. ambiguous information.
E. uncertainty.
Answer: D
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Which of the following is a prepurchase service offered by retailers?
A) accepting orders over the telephone B) shipping the product C) delivery to the customer's doorstep D) general information E) interior decoration of the retail outlet
Which of the following would the auditor most likely do when testing the existence assertion for inventory?
a. Observe the client's count of the annual physical inventory and perform test counts. b. Review vendor invoices for the amounts recorded. c. Review open purchase orders at year end. d. Trace raw material purchases to invoices and to the general ledger.
Second Street Company has 10 units in ending merchandise inventory on December 31. The units were purchased in November for $180 each. The price lists from suppliers indicate the current replacement cost of the item to be $174 each. Which of the following statements is TRUE of the effects of the adjustments to ending merchandise inventory and the cost of goods sold?
A) The cost of goods sold would increase by $6. B) The cost of goods sold would not be affected. C) The cost of goods sold would decrease by $60. D) The cost of goods sold would increase by $60.
Cherise contacted her insurance agent and said she was interested in purchasing several life insurance policies: (a) a policy on her own life for $100,000, naming her son and daughter as beneficiaries; (b) a policy on her neighbor's life for $100,000,
since she had observed him engaging in reckless behavior, naming herself as beneficiary; (c) a $5,000 policy on another neighbor to cover a loan Cherise made to him, naming herself as beneficiary; and (d) a $250,000 policy on her business partner, naming herself as beneficiary. Discuss the legality of each of these potential contracts.