Key Control Procedures for the Long-Term Debt and Owner's Equity

question 53

Multiple Choice

Key control procedures for the long-term debt and owner's equity process are

• A)segregation of duties
• B)recalculation procedures
• C)logical transaction trails
• D)independent reconciliations
• E)physical controls that allow access to assets
• F)both A and B
• G)both A and D
• H)both C and E

Perform calculations for allocating costs using various bases such as square footage, employee numbers, or machine hours.

Compute financial metrics such as return on assets (ROA) and residual income for divisions or departments.

Differentiate between direct and indirect expenses and their role in calculating contributions to overhead.

Assess departments' performance based on departmental contribution to overhead.

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Definitions:

Average Operating Assets

The average value of assets used in the production or operations of a company over a specific period, often used in performance metrics like return on investment.

Sales

Sales pertain to the revenue a company generates through the selling of goods or services to its customers.

Minimum Required Rate Of Return

The lowest acceptable return on an investment, determined by the investor's risk tolerance and alternative investment options.

Unit Selling Price

The amount of money charged to the customer for a single unit of product or service.