Author Question: The entry to record expired insurance is omitted. This error causes a. assets to be overstated. b. ... (Read 120 times)

NguyenJ · **on:** Jul 6, 2018

The entry to record expired insurance is omitted. This error causes
a. assets to be overstated.
b. expenses to be overstated.
c. liabilities to be overstated.
d. liabilities to be understated.
e. an increase in liabilities on the balance sheet.

Question 2

As per the Rev. Rul. 59-60 (Sec. 4), which of the following factors should be considered in valuations?

A) the price earnings ratio of the company
B) the earning capacity of the company
C) the fair market value of the stock of the business
D) the book value of stocks of similar companies

cassie_ragen · **Reply #1 on:** Jul 6, 2018

Answer to Question 1

A

Answer to Question 2

B
Explanation: B) Rev. Rul. 59-60 (Sec. 4 ) identifies eight valuation factors, although not all-inclusive, that should be considered, which includes the earning capacity of the company.