A research consortium has a large portion of its plant assets concentrated in an area where technology is rapidly changing. The organization wants to minimize taxable income and maximize net income reported to shareholders. Recommend a course of action for accomplishing this objective and provide support for your recommendation.
What will be an ideal response?
When technology is changing rapidly, more cost should be allocated during the early years of life when the plant asset is more productive. This is achieved by using an accelerated depreciation method like MACRS or double-declining-balance. These methods create a larger expense in the early years of life and reduce the income for the period, which reduces the amount of taxes paid. A company should select the method for financial reporting that maximizes net income such as straight-line, and the method that creates the lowest taxes for tax reporting such as MACRS.
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Which of the following control plans is most likely to appear in the input validity and input accuracy columns, but not in the input completeness column of a control matrix for the billing process?
a. independent billing authorization b. reconcile input and output batch totals c. check for authorized prices, term, freight, and discounts d. procedures for rejected inputs
Which of the following is an example of a gap between management perception and the service-quality specifications?
A) The college brochure showed state-of-the-art classrooms, but when the visitors walked in, they saw peeling walls and dull lighting. B) A nurse visits a patient to show care, but the patient interprets this as an indication that something is very wrong. C) The hotel administrators think that guests want better food, but guests are more concerned with the courtesy of the waiters. D) A service center manager has asked his subordinates to provide fast service, but has not specified a time for the service to be performed. E) Customer service representatives are asked to give ample time to each customer, but must serve a minimum of 50 customers a day.
Identify the true statement concerning communications between clients and accountants.
A. Even if a state has a statute that grants protection to accountants' working papers, federal courts do not always recognize such state statutes. B. In all states, communications between clients and accountants are treated the same way communications between clients and attorneys are treated. C. Communications between clients and accountants are treated by courts as privileged in the vast majority of states. D. The accountant can never be forced to testify about the client's records and about conversations that the accountant had with the client.
The majority of what looks like interpersonal conflict is actually a communication breakdown. This describes which type of conflict?
A. unfulfilled expectations B. misunderstanding C. competition for supremacy D. personalities