A Small Business Owner Can Best Offset the Lack of Separation

question 70

Multiple Choice

A small business owner can best offset the lack of separation of duties by:

• A)creating an internal audit department.
• B)installing the latest computer equipment and software.
• C)being actively involved in the accounting process.
• D)relying on the external auditor to detect errors.

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Definitions:

Equivalent Units

A concept used in process costing that converts partially completed goods into a number of fully completed units for accounting purposes.

Direct Materials

Raw materials that can be directly traced to the production of goods and are a significant part of the finished product.

Conversion Costs

Expenses in manufacturing that include both labor costs and overhead costs associated with converting raw materials into finished goods.

Equivalent Units

A method used in process costing that converts partially completed units into a smaller number of fully completed units.