The bank reconciliation uncovered a transposition error in the books. This is an example of a
a. preventive control
b. detective control
c. corrective control
d. none of the above
B
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The five Cs of credit are character, capacity, collateral, capital, and competence.
Answer the following statement true (T) or false (F)
The receipt of which of the following would be considered evidence of the recipient being in a
partnership, assuming all amounts are paid out of the profits of the partnership? A) Payment of wages earned by an employee B) A portion of the profits remaining after all other expenses have been paid C) Rent owed to a landlord D) Payment of the interest and principal on a debt
Paying Payroll Service (PPS) recently declared bankruptcy. The price of PPS's stock has dropped from approximately $10 per share one year ago to $1 today. You can imagine that stockholders are not happy that the value of their stock has dropped so significantly. At the same time the financial position of the firm was deteriorating, PPS executives increased their salaries and perquisites substantially. Nothing they did violated any laws or was considered an unethical act. We would most likely describe this situation as _____.
A. an agency problem B. an accounting glitch C. an appropriate use of the tax laws D. an appropriate action, because executive compensation should always be increased substantially each year E. acceptable, because it is obvious that the executives were trying to maximize the value of the firm, which is what the shareholders want them to do
Under US tax laws, corporations are taxed on all income, except income from foreign sources
Indicate whether the statement is true or false