Question

Fred owns a small manufacturing plant. His friend Paul also owns a manufacturing plant and has talked to Fred about issues he has found so far with his system. What is Paul likely to say? (Select all that apply.) Select one or more: a. You may have to tell your accountant to conduct reconciliations to ensure that the rates in the system make sense when compared to actual rates. b. Beware of the high price to buy and maintain the cost accounting system. c. Be sure that the cost accounting system picks up current stock prices from the Internet.

Answer 1

Answer: The correct answer is "a. You may have to tell your accountant to conduct reconciliations to ensure that the rates in the system make sense when compared to actual rates.".

Explanation: Paul should surely recommend that your accountant verify the rates applied in the accounting system have reliability and are correctly related to the actual rates and if not, perform the necessary reconciliations.