Which of the Following Errors Normally Would Not Be Automatically

question 36

Multiple Choice

Which of the following errors normally would not be automatically corrected over two accounting periods?

• A)failure to record prepaid revenue
• B)failure to record accrued payroll liabilities
• C)failure to record depreciation expense
• D)failure to count inventory in transit at year-end

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Definitions:

Average Operating Assets

The average value of a company's assets used in its operating activities over a certain period.

Net Operating Income

A company's revenue minus its operating expenses, not including taxes and interest, showing the profitability from regular business operations.

Average Operating Assets

The average amount of assets used during a period to generate operating income, useful in evaluating asset efficiency.

ROI

Return on Investment, a measure used to evaluate the efficiency or profitability of an investment, calculated as the net profit divided by the cost of the investment.