COSO's _____________________________
_ sets the tone of the organization, influencing the control consciousness of its people.
Fill in the blank(s) with correct word
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Q. 2) Max is having a problem understanding the financial statements. He believes that his administrative assistant has made some errors in preparing the income statement.
Evaluate the following transactions and the income statement prepared by the administrative assistant. Prepare a corrected income statement using U.S. GAAP.
a. Max's Catering earned 10,000 in catering business during June.
b. Customers paid 2,500 in deposits for parties to be catered in July.
c. The business paid 500 for June rent.
d. The business paid the chef 5,000 in wages for June.
e. The business spent 3,300 on food, spices, and other ingredients, and used 1,500 of them during June.
Max's Catering
Income Statement
At June 2012
Revenues 12,500
Expenses
Rent 500
Wages 5,000
Supplies 3,300
Total expenses (8,800)
Net income 3,700
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Q. 3) Cash flows from financing activities include contributions from owners.
Indicate whether the statement is true or false
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Q. 4) An employee's total earnings is referred to as gross pay.
a. True
b. False
Indicate whether the statement is true or false
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Q. 5) Cranberry Company purchased two pieces of equipment from a Canadian vendor for 400,000. If the assets had been purchased separately, the company would have paid 90,000 for the first piece of equipment and 360,000 for the second piece of equipment.
What amount should be recorded for the FIRST piece of equipment?
A) 80,000
B) 90,000
C) 360,000
D) 320,000
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Q. 6) The lower of cost or market is a method of inventory valuation.
a. True
b. False
Indicate whether the statement is true or false
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