Increased Scrap, Excessive Purchases, and Physical Abnormalities Are Examples Of

question 4

Multiple Choice

Increased scrap, excessive purchases, and physical abnormalities are examples of:

• A) accounting anomalies.
• B) external control weaknesses.
• C) analytical anomalies.
• D) unusual behavior.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue, indicating its financial performance over a period.

Debt-Equity Ratio

The ratio determining the mix of equity and borrowed funds utilized for financing a company’s assets.

After-Tax Cost

The actual cost of an expense or investment after accounting for the effects of taxes, providing a more accurate measure of the expense's or investment's true financial impact.

Target Capital Structure

The mixture of debt, equity, and other financing sources a firm aims to hold to maximize its stock value.