What is the purpose of source documents? What controls are embedded in source documents? Give two examples of source documents
What will be an ideal response?
Answer: The primary purpose of source documents is to record data about business activities. Source documents standardize data collection procedures for an organization and provide better control and accuracy. Source documents are generally pre-numbered, which helps to verify that all transactions have been recorded and there is no missing document; if a document is missing, then which one(s) can be determined. Proper design of source documents ensures which information to collect, preprints standard information such as addresses, and provides directions for completing the form. Examples include: invoices, timecards, sales orders, and purchase orders.
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The capitalization rate to be used in the income approach to the appraisal of real property provides for a return on, and a return of, the investment in the improvements. A return of the investment is provided for by means of:
A: Return on the land; B: Monthly savings; C: Depreciation methods; D: Principal payments.
The minimum rate of return necessary to attract an investor to purchase or hold a security is called the cost of capital
Indicate whether this statement is true or false.