What is the primary reason for management's ability to easily overvalue inventory without rapid detection by auditors?
a. The limited volume of transactions in the inventory accounts.
b. The auditor's assessment of inventory as a low-risk area.
c. Complexity in the valuation of inventory.
d. Consideration by the auditor of non-financial indicators of inventory fraud.
c
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Firms initially record property, plant, and equipment, sometimes referred to as fixed assets, at acquisition cost, the cash paid or the fair value of other consideration given in exchange for the asset. Which of the following is not true?
a. Acquisition cost includes all costs necessary to prepare the asset for its intended use. b. Firms capitalize into the asset's carrying amount subsequent expenditures that extend the service life or increase the benefits of a fixed asset beyond those initially anticipated. c. Buildings and equipment have a finite life, so firms must depreciate their acquisition cost less estimated salvage over the expected service life. d. Firms may use a straight-line method or accelerated depreciation methods. e. If new information becomes available that indicates that the expected service life or estimated salvage value differs significantly from that initially anticipated, the firm revises its depreciation claimed in prior years and restates the financial statements.
The U.S. is not a party to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)
a. True b. False Indicate whether the statement is true or false
_____________ is the process of moving funds electronically from an account in one bank to an account in another bank
a. Automatic payments b. Bank reconciliation c. Electronic Funds Transfer d. Direct deposit
From the standpoint of a person buying insurance, the central purpose of insurance should be:
A. to transfer the risk of serious losses. B. to collect for all accidental losses. C. to profit from uncertain future events. D. to contribute to charitable purposes. E. to reduce the cost of taking small risks.