Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

Financial Accounting

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

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Multiple Choice

Which of the following would be classified as an external failure cost on a quality cost report?

Costs of reworking defective units before shipment

Costs of training employees in quality control procedures

Costs of inspecting products during production

Costs incurred from repairing products returned by customers

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Verified step by step guidance

Understand the concept of external failure costs: External failure costs are incurred when defective products or services are identified after they have been delivered to customers. These costs typically include warranty claims, repairs, replacements, and loss of customer goodwill.

Analyze the options provided: Review each option to determine whether it represents an external failure cost or another type of quality cost (e.g., prevention, appraisal, or internal failure costs).

Option 1: Costs of reworking defective units before shipment. This is classified as an internal failure cost because the defect is identified and corrected before the product reaches the customer.

Option 2: Costs of training employees in quality control procedures. This is classified as a prevention cost because it involves proactive measures to avoid defects in the first place.

Option 3: Costs incurred from repairing products returned by customers. This is classified as an external failure cost because the defect is identified after the product has been delivered to the customer, requiring repair or replacement.