When an Entity Uses a Trust Company as Custodian of Its

question 60

Multiple Choice

When an entity uses a trust company as custodian of its marketable securities, the possibility of concealing fraud most likely would be reduced if the:

• A)trust company has no direct contact with the entity employees responsible for maintaining investment accounting records.
• B)securities are registered in the name of the trust company rather than the entity itself.
• C)interest and dividend checks are mailed directly to an entity employee who is authorized to sell securities.
• D)the trust company places the securities in a bank safe deposit vault under the custodian's exclusive control.

Learn the principles of fixed costs and how they remain constant regardless of changes in production or sales volume.

Identify and distinguish between various types of costs such as sunk costs, period costs, product costs, and opportunity costs.

Calculate total costs, including both variable and fixed components, at different levels of production or sales volume.

Understand how costs behave within the relevant range and how to apply this understanding to cost management.