Steve Is in Charge of Accounting for the Purchase of Equipment

question 45

Multiple Choice

Steve is in charge of accounting for the purchase of equipment at Cal Works, Inc. The company has a policy that all expenditures greater than $1,000 (1% of total expenditures) have to be capitalized; less than $1,000 expensed. Steve is under pressure to report high earnings. He takes one $600 and $900 expenditure, adds them together, and records a capital expenditure for $1,500. Which of the following reasons and rationalizations might Steve use for his action:

• A) One-time request
• B) Standard Practice
• C) Representational faithfulness
• D) Materiality

---

Definitions:

Postzygotic Barriers

Reproductive isolating mechanisms that occur after fertilization, preventing the development of viable or fertile offspring between different species.

Temporal Isolation

A mechanism of reproductive isolation in which different species breed at different times, preventing them from interbreeding.

Habitat Isolation

A prezygotic barrier where two species live in different habitats within the same area but do not meet, preventing them from mating.

Gametic Barriers

Reproductive obstacles that prevent gametes (sperm and egg) from two different species from fusing and creating a viable offspring.