If a company understates its ending inventory balance for 2015 by $15,500, what are the effects on its net income for 2015 and 2014? Effect on 2015 Net Income Effect on 2014 Net Income
a. Overstated by $15,500 Understated by $15,500
b. Understated by $15,500 Overstated by $15,500
c. Understated by $15,500 No effect
d. Overstated by $15,500 No effect
c
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Indicate whether the statement is true or false
If the auditor is performing substantive procedure to determine whether the long-lived asset balance is reflected on the balance sheet in the noncurrent section, which of the following assertions is being tested?
a. Existence. b. Completeness. c. Presentation and Disclosure. d. Rights and Obligations.
Kelly signs an instrument in favor of Leo that states it is “subject to a certain agreement between Kelly and Mona.” This instrument is
A. negotiable. B. nonnegotiable, because it is made subject to a separate agreement. C. nonnegotiable, because it refers to a separate agreement. D. nonnegotiable, because Kelly and Mona are not the same persons.
The type of pay raise in which the employee can receive the entire amount of the increase at the beginning of the year is called a(n)
A. incentive payment. B. lump-sum salary increase. C. commission salary increase. D. gain-sharing salary increase. E. percentage-of-salary payment.