1) When a credit card sale is recorded, what is the effect on the accounting equation?
2) Indicate whether each of the following statements about internal control and ethics is
true or false.
1>The use of safety deposit boxes is a common feature of an effective internal control
system
2>An internal control system consists of policies and procedures that reduce
opportunities for fraud
3>The importance of ethical conduct is recognized across a broad spectrum of
accounting organizations
4>The American Institute of Certified Public Accountants requires its members to
comply with the Code of Professional Conduct
5>The absence of safety deposit boxes means that the company does not have an
effective internal control system
3) The Furniture Division of Waverly Company reports the following results for 2012:
Waverly Company has set a target return on investment (ROI) of 12% for the Furniture
Division.
Based on the information provided for Furniture, calculate the return on investment for
2012. Did the division achieve its target ROI of 12%?
4) When should warranty expense be recognized?
5) Discuss the limitations that affect financial statement analysis.