Kiting Is Possible When

question 3

Multiple Choice

Kiting is possible when:

• A) one person handles cash receipts and another maintains the accounts receivable ledger.
• B) one person handles cash receipts and maintains the accounts receivable ledger.
• C) one person issues cheques and another records them.
• D) one person issues cheques and records them.

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Definitions:

Average Accounting Return

A measure of profitability calculated as the average net income divided by the average book value of investment over a period.

Annual Net Incomes

The total profit of a company after all expenses and taxes have been deducted from revenues for one year.

Salvage Value

The estimate of an asset's worth at the end of its useful life.

Average Accounting Return

A financial ratio that measures the net profit of a project or investment as a percentage of its initial cost.