Expense Account Padding

question 1

Multiple Choice

Expense account padding

• A) is an expected activity and is generally ignored unless it is very blatant.
• B) occurs very rarely as most salespeople are quite honest.
• C) is considered a serious offense, which, if detected, often leads to termination of employment.
• D) is so difficult to uncover that most companies simply do not try.
• E) is viewed as a fringe benefit by most salespeople.

Learn how to evaluate the performance of individual departments using departmental income statements.

Distinguish between direct and indirect expenses and their implications on departmental profitability.

Conceptualize the process of preparing departmental balance sheets and their rare usage in compared to income statements.

Grasp the methodology for classifying departments as either profit centers or cost centers based on their operational function.

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