Application Controls Are Designed to Provide Reasonable Assurance That IT

question 50

True/False

Application controls are designed to provide reasonable assurance that IT records, processes, and reports data properly for specific applications.

Understand the direct method for reporting cash flows from operating activities.

Calculate the amount of cash received from customers.

Determine the cash payments for income tax, merchandise, and operating expenses.

Calculate and understand free cash flow.

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Definitions:

Income Summary

An account to which all revenue and expense accounts are transferred at the end of an accounting period to summarize the results of operations for that period.

Normal balance

The side of an account (debit or credit) where increases in the account are recorded, depending on the account type.

Inventory balance

The total value of all goods and materials held by a company intended for sale or production.

Net Income

The profit of a company after all expenses and taxes have been deducted from revenue.