COSO's ______________________________ sets the tone of the ...

[fox]

COSO's ___________________ ___________ sets the tone of the organization, influencing the control consciousness of its people.
 Fill in the blank(s) with correct word

Question 2

Max is having a problem understanding the financial statements. He believes that his administrative assistant has made some errors in preparing the income statement.
 
  Evaluate the following transactions and the income statement prepared by the administrative assistant. Prepare a corrected income statement using U.S. GAAP.
 
  a. Max's Catering earned 10,000 in catering business during June.
  b. Customers paid 2,500 in deposits for parties to be catered in July.
  c. The business paid 500 for June rent.
  d. The business paid the chef 5,000 in wages for June.
  e. The business spent 3,300 on food, spices, and other ingredients, and used 1,500 of them during June.
 
   Max's Catering
   Income Statement
   At June 2012
 
  Revenues 12,500
  Expenses
   Rent  500
   Wages 5,000
   Supplies 3,300
  Total expenses (8,800)
  Net income  3,700

[AmberC1996]

Answer to Question 1

control environment

Answer to Question 2

Max's administrative assistant has prepared a cash basis income statement instead of an accrual income statement. The assistant also made other mistakes.

Max's Catering
Income Statement
At June 2012

Revenues 10,000
Expenses
Rent  500
Wages 5,000
Supplies 1,300
Total expenses (7,000)
Net income  3,000