True or False

1. In the age of technology, the system of Internal Controls is more dependent on upfront design, rather than after the fact review.

2. Internal Control policy and procedures do not vary from company to company, and all companies must have the same internal control policies, regardless of scope and size.

3. MACRS depreciation provides for rapid write-off of an assets cost, to provide Companies with a tax benefit as an incentive to stimulate new investment.

4. Under a Voucher System, every employee of the Company is allowed to commit the company to financial obligations A list of Signing Authorities and Limitations is not required.

5. Some Companies report credit card expense in the income statement as a discount subtracted from sales to get Net Sales. Others classify it as a selling expense or an administrative expense. Both approaches are considered acceptable under GAAP.

6. The Direct Write-off Method of accounting for Bad Debts records the loss from uncollectible accounts receivable, as an estimate of Sales, at the time of Sale.

7. At the time of a disposal of an Asset. if the realizable selling price of the Asset is greater than the book value of the Asset, then the Company will recognize a loss on the disposal of the Asset.

8. Natural resources (i.e. Oil, Gas, Minerals, etc.), extracted from the environment are reported on the Balance Sheet at Cost, less the contra account Accumulated Depreciation.

9. A seller reports warranty obligation as a Liability.

10. Plant assets are never purchased as a group in a single transaction for a lump-sum price. Instead, they are always purchased individually, so that we can establish a correct purchase price to record each asset.