True/False
Indicate whether the
statement is true or false.
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1.
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The Sarbanes-Oxley Act of 2002 applies to all publicly held companies.
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2.
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The Sarbanes-Oxley Act requires companies and their independent accountants to
report on the effectiveness of the company's internal controls.
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3.
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Employee fraud is the intentional act of deceiving an employer for personal
gain.
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4.
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All organizations face risks, and the assessment of these risks is necessary
so that the objectives of internal control can
be achieved.
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5.
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The internal control environment is enhanced by the hiring and retention of
competent, honest employees,
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6.
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All receivables that are expected to be realized in cash within a year are
presented in the current assets section of the balance sheet.
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7.
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2. Receivables not expected to be collected within one year are reported in the
fixed assets section of the balance sheet.
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8.
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Both accounts receivable and notes receivable represent claims that are expected
to be collected in cash.
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9.
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The due date of a 60-day note dated July 10 is September 9.
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10.
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The sum of the face amount and the interest that must be paid at the due date
of the note is called maturity value.
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11.
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The acquisition costs of property, plant, and equipment should include all costs
necessary to get the asset in place and ready for use.
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12.
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Long-lived assets that are intangible in nature, used in the operations of the
business, and not held for sale in the
ordinary course of business are called fixed assets.
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13.
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Expenditures made to extend an asset's life are called revenue
expenditures.
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14.
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Expenditures made to extend an asset's life are called revenue
expenditures.
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15.
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The estimated amount that an asset can be sold for at the end of its useful life
is called its book value.
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16.
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Earnings per common share are one factor that influence the decision to use debt
financing or equity financing.
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17.
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. Most employers are required to withhold a portion of the earnings of each
employee for FICA tax.
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18.
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Most employers are required to withhold federal unemployment taxes from
employee earnings.
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19.
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If prior to the last weekly payroll period of the calendar year, the cumulative
earnings for an employee are $75,200,
earnings subject to social security tax are $106,800, and
the tax rate is 7.5%, the employer's social security tax on the $800
gross earnings paid on
the last day of the year is $60.
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20.
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Liabilities that are due and payable beyond one year or paid out of noncurrent
assets are termed long-term liabilities.
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