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3 years ago

Internal control does not consist of policies and procedures that

Business

1 answer:

kotegsom [21]3 years ago

4 0

Answer:

d.guarantee the company will earn a profit

Explanation:

Internal controls are controls put in place by management to mitigate against identified risk. Risk basically refers to what could go wring in a process. Controls are put in place to mitigate against the risk of error or fraud and do not necessarily prevent the company from making a loss.

Companies make profit or loss based on management's decisions such as where to invest, what time to invest, introduction of a new product, management of cost of sales and operating expenses etc

Internal controls basically consist of policies and procedures that ensure that the company's asset are not misused (fraud), no misrepresentation of revenue (fraud), employees and managers comply with laws and regulations, business information is accurate ( no misrepresentation of records due to error) etc.

Hence Internal control does not consist of policies and procedures that guarantee the company will earn a profit.

The right option is d.

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Lubov Fominskaja [6]

Answer:

True

Explanation:

Partnerships are not taxed as individual entities, they work as pass through entities where the partners must report any gains or losses on their personal income filings.

In this case, since Aaron owns 25% of Eagle Company, any loss or gain that Eagle company has will be passed to Aaron in the same percentage. Since Eagle had a $10,000 short term capital loss, $2,500 ($10,000 x 25%) of the loss will pass to Aaron.

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3 years ago

The two methods of accounting for uncollectible receivables are the direct method and the __________ method.

Rudiy27

The two methods of accounting for uncollectible receivables are the direct method and the <u>allowance</u> method.

The Financial Accounting Reserve Method refers to the bad debt process in which the estimated bad debt expense is recorded in the same accounting period as the sale. The provisioning method is used to adjust the value of accounts receivable shown on the balance sheet.

The direct depreciation method requires two separate postings to write off the irrecoverable account. Recognizing credit losses using the provisioning method reduces journal entries for recognizing certain charge-offs. Doubtful invoice deductions.

Under the allowance method, companies estimate the number of bad debts as a percentage of credit sales. Then apply that percentage to your credit sales when you get your revenue. Value adjustments correspond to income.

Disclaimer: Learn more about the allowance method here

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2 years ago

The dividend growth model can be used to value the stock of firms that pay which type of dividends?I. Constant annual dividendII

Fed [463]

Answer:

II and III only

Explanation:

Since the Zero dividend is not possible in most of the scenarios.

The dividend growth model can be used to value the stock of firms that pay Annual dividend with a constant increasing rate of growth and the Annual dividend with a constant decreasing rate of growth.

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3 years ago

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3 years ago

Read 2 more answers

On January 1, 2021, Kapoor Co. sold equipment to its subsidiary, Howard Corp., for $125,000. The equipment had cost $150,000, an

Citrus2011 [14]

Answer:

The amount of depreciation expense on the consolidated income statement is $144,375

Explanation:

The computation of the depreciation expense is shown below:

Excess depreciation arise on gain on sale of asset is

= ($125,000 - $80,000) ÷ 8 years

= $5,625

Now the Consolidated depreciation is

= $86,000 + $64,000 - $5,625

= $144,375

Hence, the amount of depreciation expense on the consolidated income statement is $144,375

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3 years ago