Ann Covington, CPA, has been asked to perform a consulting services engagement concerning the analysis of a potential merger. She has little experience with the industry involved. What is her most appropriate action?
a. Accept the engagement and perform it in accordance with auditing standards
b. Accept the engagement and perform additional research or consult with others to obtain sufficient competence
c. Accept the engagement and issue a report vouching for the achievability of the results of the merger
d. Decline the engagement because she lacks sufficient knowledge
Ans: b. Accept the engagement and perform additional research or consult with others to obtain sufficient competence
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Bank Boston has a branch at Bryant College. The branch is busiest at the beginning of the college year when freshmen and transfer students open accounts. This year, freshmen arrived at the office at a rate of 40 per day (8-hour day)
On average, it takes the Bank Boston staff person about ten minutes to process each account application. The bank is considering having one or two tellers. Each teller is paid $12 per hour and the cost of waiting in line is assumed to be $8 per hour. (a) What is the total daily waiting cost for the single teller model? (b) What is the total daily waiting cost for the two-teller model? (c) What is the total daily service cost for the single teller model? (d) What is the total daily service cost for the two-teller model? (e) Which model is preferred?
Adjusting entries that are made to counteract the effects of errors found in the general ledger are called
A) accruals. B) corrections. C) deferrals. D) estimates.