Explain the problems associated with inappropriate accounting practices
The use of inappropriate accounting techniques is a characteristic common to many financial statement fraud schemes. Enron made elaborate use of Special Purpose Entities (SPE) to hide liabilities through off balance sheet accounting. WorldCom management transferred transmission line costs from current expense accounts to capital accounts. This allowed them to defer some operating expenses and report higher earnings. Also, they reduced the book value of hard assets of MCI by $3.4 billion and increased goodwill by the same amount. Had the assets been left at book value, they would have been charged against earnings over four years. Goodwill, on the other hand, was amortized over much longer period.
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A design patent will last for
A. 14 years from the date of the filing of the application with the U.S. Patent and Trademark Office. B. 20 years from the date of the approval of the application granted by the U.S. Patent and Trademark Office. C. 14 years from the date of the approval of the application granted by the U.S. Patent and Trademark Office. D. 20 years from the date of the filing of the application with the U.S. Patent and Trademark Office.
Liability based on federal securities law is known as which type of law?
a. Common Law b. Contract Law c. Commercial Law d. Statutory Law
In a journal entry, the Post. Ref. column is left blank until the entry has been posted
Indicate whether the statement is true or false
Using the contribution margin approach, find the contribution margin ratio for Consumer Products if the selling price per unit is $15, the variable cost per unit is $7.50, and the fixed costs are $8,000
A) 25% B) 75% C) 50% D) 100%