As a General Rule, the Auditor Is Appointed by the Shareholders

question 12

Multiple Choice

As a general rule, the auditor is appointed by the shareholders at the annual general meeting.Which of the following is not true concerning the appointment of an auditor?

• A)In practice the shareholders generally accept the recommendations of the directors concerning the appointment.
• B)The appointment stands for 12 months until the next annual general meeting.
• C)The company is liable to pay reasonable fees and expenses of the auditor.
• D)An auditor ceases to hold office after a company goes into liquidation.

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Definitions:

Work In Process

Inventory that is in the production process and is not yet complete; it includes raw materials, labor, and overhead costs incurred for products that are at various stages of production.

Direct Materials

Raw materials that are directly used in the production of a product and can be easily traced to the finished product.

Conversion Costs

Sum of labor costs and overhead expenses associated with the transformation of raw materials into finished goods.

First-In

Typically part of the phrase "First-In, First-Out" (FIFO), a method used to assign costs to inventory on the basis that the first items entered into inventory are the first sold.