You Did Not Understand What the Term Accrual Meant and Failed

question 222

Multiple Choice

You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company's bonds.Which of the IMA standards appears to have been violated?

• A) integrity
• B) confidentiality
• C) competence
• D) objectivity

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Definitions:

Purchase Commitments

Agreements to buy goods or services at a predetermined price, often specifying quantity and delivery dates.

Gross Profit Method

This is an accounting technique used to estimate inventory value, calculating gross margin as a percentage of sales to find the cost of goods sold and ending inventory.