The Board of Directors Is Essential for Effective Corporate Governance

question 9

Multiple Choice

The board of directors is essential for effective corporate governance because it has ultimate responsibility to

• A)make sure management implements proper internal control and financial reporting processes.
• B)assist management in the preparation of the financial statements.
• C)test internal controls and ensure they are working properly.
• D)provide a report to the auditor confirming that internal controls are working properly.

Understand the application of perpetual and periodic inventory systems.

Calculate inventory turnover and interpret its significance.

Derive cost of goods sold using various inventory methods.

Analyze the impact of inventory valuation choices on financial ratios and business decisions.

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Definitions:

Earned Income

Income generated from business activities or services provided, distinguishing it from investment or donated income.

Earned-Income Strategies

Approaches used by non-profits or social enterprises to generate revenue through business activities rather than donations or grants.

Transparency

The practice of openly and honestly disclosing information to stakeholders, promoting trust and accountability.

Contractual Agreements

Legally binding agreements between two or more parties that outline the terms, conditions, and obligations of each party.