Which one of the following statements is correct?
A) The lower the level of a firm's debt, the higher the firm's leverage.
B) The lower the level of a firm's debt, the lower the firm's equity multiplier.
C) The lower the level of a firm's debt, the higher the firm's equity multiplier.
D) The tax benefit from using debt financing reduces a firm's risk.
Answer: B) The lower the level of a firm's debt, the lower the firm's equity multiplier.
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What is the organization's responsibility in the goal-setting stage of the career management process?
A. to identify what skills can be developed realistically B. to communicate performance evaluation and opportunities available to an employee C. to identify goals and methods to determine goal progress D. to ensure that the goal is specific, challenging, and attainable E. to identify steps and a timetable to reach goals
Explain some of the differences in accounting for operating assets that exist between U.S. GAAP and IFRS
An auditor knows that an audit client operating in an industry in which common stock is valued based on the price-earnings ratio will soon make an initial public offering. All of the following are true except:
A. materiality should be reduced. B. audit risk should increase. C. detection risk should decrease. D. risk of material misstatement should increase.
Answer the following statements true (T) or false (F)
1. Variable costing prepares the income statement using the traditional format. 2. The contribution margin format of the income statement categorizes costs by their behavior. 3. The fixed manufacturing overhead is considered a product cost in variable costing and a period cost in absorption costing. 4. Variable costing considers direct materials, direct labor, variable manufacturing overhead, and fixed manufacturing overhead as product costs. 5. The level of inventory on hand at the end of the year does not affect the amount of operating income calculated under variable costing and absorption costing.