The Purpose of the Sarbanes-Oxley Act of 2002 Is To

question 74

Multiple Choice

The purpose of the Sarbanes-Oxley Act of 2002 is to:

• A) restore public confidence and trust in the financial statements of publicly held companies.
• B) require all companies to prepare financial statements.
• C) protect companies from demands of investors, stockholders, and creditors.
• D) do all of these.

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Definitions:

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made at specific intervals, based on physical inventory counts.

Merchandise Inventory

Items that a company intends to sell to customers that are held as assets on the balance sheet.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.

Retail Inventory Method

An accounting method used by retailers to estimate inventory cost by using a cost-to-retail price ratio based on both beginning inventory and purchases during the period.