Auditing And Assurance Services
Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 14, Problem 21.1MCQ
To determine

Identify the control that is most likely to be effective to offset the tendency of sales personnel to maximize sales volume at the expense of high bad-debt write-offs.

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Which of the following about capital allowances is not true: A.Initial allowance is deducted from the cost to the asset to arrive at its tax written down value (TWDV). B.Annual Allowances are given each year provided the asset is in use at the end of the tax year. C.For industrial buildings, initial allowance is only given on construction, alteration of industrial buildings (not purchased). D.Initial Allowance can be deferred. It can be claimed in the year following when the expenditure was incurred.
A company has current assets that could be sold for their book value of $30 million. The book value of its fixed assets is $80 million, but they could be sold for $120 million today. The company has total debt with a book value of $50 million, but interest rate changes have caused the market value of the debt to increase to $60 million. What is the ratio of the market value of equity to its book value?
I am searching for a clear explanation of this financial accounting problem with valid methods.
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