Equipment acquisitions that are misclassified as maintenance expenses most likely would be detected by a control activity that provides for:
A. investigation of variances within a formal budgeting system.
B. independent verification of invoices for disbursements recorded as equipment acquisitions.
C. authorization by the board of directors of significant equipment acquisitions.
D. segregation of duties of employees in the accounts payable department.
Answer: A
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Fox Auto sold merchandise to a customer for $3,000 on credit on March 10 . The customer paid Fox Auto the amount due on March 31 . Under the accrual basis of accounting, which of the following statements is true?
a. Fox Auto will recognize the revenue on March 31. b. The March 10th transaction increases revenue, but has no effect on assets because cash has not been received. c. Revenue is recognized after the cost of the merchandise sold has been paid by Fox Auto. d. The March 31st transaction has no effect on total assets under the accrual basis.
The net income for a company was $400,000 last year and is $500,000 this year. The percentage of increase or decrease is
a. 20%; b. 25%; c. 80%; d. 125%; e. cannot be determined from the information given
Which of the following is an advantage of illustrating your ideas with visual aids?
A) The message is easier to remember. B) You add a level of credibility to the presentation. C) You allow audience members to connect with each other. D) Visuals allow the audience members to stay on track with the main idea of the presentation. E) Visual aids promote the speaker as an authority figure.
Allocating supplies during a shortage based on demand histories of customers can be used to combat _______.
a. gaming b. manipulation c. protectionism d. camouflaging