Research has shown that auditors' qualifications of audit reports are better predictors of going-concern problems than are Z-score models
a. True
b. False
Indicate whether the statement is true or false
False
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Claitin Inc uses large warehouses to store its finished goods ready for sale. After its personnel and auditors conducted a physical inventory of goods on one side of its warehouses, Claitin Inc transported a portion of the inventory to another part of the warehouse, removing the inventory tags that indicated that the items had already been counted in inventory, and thereby included the items a
second time in inventory. In this way, the firm overstated its ending inventory for the current year, understated its cost of goods sold, and overstated its earnings. This action resulted in an overstatement of the beginning inventory for the next year. Assuming a correct count of the ending inventory for the second year, the action has the result of overstating cost of goods sold for the second year and understating earnings. Net income for the two years combined, however, is correctly stated, the net result of an overstatement in the first year offset by an equal understatement in the second year. The actions a. are in accordance with U.S. GAAP. b. are in accordance with IFRS. c. violate ethical principles. d. are in accordance with U.S. GAAP, but not IFRS. e. are in accordance with IFRS, but not U.S. GAAP.
A purchase-money security interest in a business's inventory is perfected automatically at the time of a credit sale.
Answer the following statement true (T) or false (F)
Why would a corn farmer, who maintains a short futures contract after harvesting and selling her crop, be considered a speculator?
What will be an ideal response?
The management of Hansley Corporation is investigating an investment in equipment that would have a useful life of 5 years. The company uses a discount rate of 18% in its capital budgeting. Good estimates are available for the initial investment and the annual cash operating outflows, but not for the annual cash inflows and the salvage value of the equipment. The net present value of the initial investment and the annual cash outflows is -$273,300. (Ignore income taxes.)See separate Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided.Ignoring any salvage value, to the nearest whole dollar how large would the annual cash inflow have to be to make the investment in the equipment financially attractive?
A. $49,194 B. $273,300 C. $87,400 D. $54,660