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NEW QUESTION 32
What must be monitored in order to manage risk of consumer product inventory obsolescence?
1. Inventory balances.
2. Market share forecasts.
3. Sales returns.
4. Sales trends.

A. 4 onlyB. 1 and 4 onlyC. 1, 2, and 3 onlyD. 1 only

Answer: B

 

NEW QUESTION 33
At the end of September, a entity has outstanding accounts receivable of US $350 on third-
quarter credit sales, composed as follows.

The percentage of receivables in the 31-to-5O-day age group at the end of September is:

A. 71.43%B. 22.86%C. 28.57%D. 48.57%

Answer: D

Explanation:
Receivables from August sales still outstanding at the end of September are in the 31 to60-day age group. This group represents 48.57% of total receivables [US $170 -$100 +$170+ $80)].
An entity sells goods on an installment basis. The table below includes information about the level of installment sales, the cost of the goods sold on installment, and the cash receipts on installment sales for Year 1 through Year 3. All cash receipt amounts shown are net of any interest charges.

 

NEW QUESTION 34
Which one of the following statements best describes the asset-liability method of accounting for deferred income taxes?

A. The amount of deferred tax is based on tax rates in effect when temporary differences originate.B. The amount of deferred tax is based on the tax rates expected to be in effect during the periods in which the deferred tax liability DTL is settled or the deferrer tax asset DTA) is realized.C. The tax effects of temporary differences are not reported separately but are reported as adjustments to the amounts of specific assets and liabilities and the related revenues and expenses.D. The appropriate tax rate to be reported on the income statement is the tax actually levied in that year, meaning no deferred taxes would be reported.

Answer: B

Explanation:
A DTA or DTL is measured at the rates expected to apply when it is realized or settled, based on tax laws and rates enacted or substantively enacted as of the balance sheet date.
If different rates apply to different taxable profit levels, a DTA or DTL is measured based on the average rates expected to apply in the periods when the temporary differences are expected to reverse. The tax rate or tax base may vary with the manner of recovery or settlement. For example, one tax rate may apply if an asset is sold immediately and another may apply if it is to be recovered through continued use.

 

NEW QUESTION 35
Which of the following is the most appropriate beginning step of a work program for an assurance engagement involving smart devices?

A. Test encryption of all smart devicesB. Obtain a list of all smart devices in useC. Understand what procedures are in place for locking lost devicesD. Train all employees on bring-your-own-device (BYOD) policies.

Answer: B

 

NEW QUESTION 36
The internal audit activity has identified accounting errors that resulted in the organization overstating its net income for the fiscal year. Which of the following is the most likely cause of this overstatement?

A. Beginning inventory was overstated for the year.B. Ending inventory was understated for the year.C. Cost of goods sold was overstated for the year.D. Cost of goods sold was understated for the year.

Answer: D

 

NEW QUESTION 37
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