ACC 497 FINAL EXAM GUIDE
Follow below link to get this tutorial:
Contact us at:
ACC 497 FINAL EXAM GUIDE
1) The uniform law, issued in 1984 by the Committee on Corporate
Laws of the American Bar Association, that regulates the formation, operation,
and termination of corporations is
2) Which of the following statements is true?
3) Which of the following statements is true?
4) What effect would a decrease in interest rates by the Federal
Reserve most likely have in the nation’s manufacturing sector, all other
factors remaining constant?
5) A table that shows the relationship between the price of a
good and the quantity demanded of that good is called
6) If policymakers increase aggregate demand, the price level
7) Which table would show the largest factor for an interest
rate of 8% for five periods?
8) Financial service
9) As the interest rate increases for any given period, the
future value interest factor will
10) The specific cost of each source of long-term financing is
based on ________ and ________ costs.
11) At the operating break-even point, ________ equals zero.
Section 4: Information Technology (IT) Implications in the
Business Environment
12) Justifying expenditures for new technologies is especially
difficult because
13) The hardware of a computer system includes the computer
itself and other devices that help the computer perform its tasks. These other
devices are commonly also called
14) Software that enables businesses and government agencies to
transmit and manipulate financial data on an organization-wide basis best
describes
15) A simple diagram that shows estimated completion times
versus actual completion times for the various activities in a systems
implementation project
16) What would be the best explanation for the absence of
complete information on computer crime?
17) Which of the following processes would be accounted for
using a job order cost system?
18) In traditional costing systems, overhead is generally
applied based on
19) If standard costs are incorporated into the accounting
system
20) Generally accepted accounting principles are
21) Luca Company overapplied manufacturing overhead during 2006.
Which one of the following is part of the year end entry to dispose of the
overapplied amount assuming the amount is material?
22) The cost to produce Part A was $10 per unit in 2005. During
2006, it has increased to $11 per unit. In 2006, Supplier Company has offered
to supply Part A for $9 per unit. For the make-or-buy decision,
23) Disney’s variable costs are 30% of sales. The company is
contemplating an advertising campaign that will cost $22,000. If sales are
expected to increase $40,000, by how much will the company’s net income
increase?
24) Kershaw Bookstore had 600 units on hand at January 1,
costing $18 each. Purchases and sales during the month of January were as
follows: Kershaw does not maintain perpetual inventory records. According to a
physical count, 450 units were on hand at January 31. The cost of the inventory
at January 31, under the LIFO method is:
25) The process of formally recording or incorporating an item
in the financial statements of an entity is
26) The primary purpose of the statement of cash flows is to
provide information
27) Which of the following is considered cash?
28) A company offers a cash rebate of $1 on each $4 package of
batteries sold during 2007. Historically, 10% of customers mail in the rebate
form. During 2007, 6,000,000 packages of batteries are sold, and 210,000 $1
rebates are mailed to customers. Assuming there is no beginning liability
balance, what is the rebate expense and liability, respectively, shown on the
2007 financial statements dated December 31?
29) Which of the following is a debt security?
30) The balance in Newsprint Corp.’s foreign exchange loss
account was $10,000 on December 31, 2008, before any necessary year-end
adjustment relating to the following:
31) Costs incurred internally to create intangibles are
32) The amount to be recorded as the cost of an asset under
capital lease is equal to the
33) In computations of weighted average of shares outstanding,
when a stock dividend or stock split occurs, the additional shares are
34) Debt securities that are accounted for at amortized cost,
NOT fair value, are
35) Elvis Company purchases inventory for $70,000 on March 19,
2008, and sells it to Graceland Corporation for $95,000 on May 14, 2008.
Graceland still holds the inventory on December 31, 2008, and determines that
its market value (replacement cost) is $82,000 at that time. Graceland writes
the inventory down from $95,000 to its lower market value of $82,000 at the end
of the year. Elvis owns 75% of Graceland. Based on this information, what
amount of inventory should be eliminated in the consolidation workpaper for
2008?
36) Which of the following objectives is considered the
cornerstone of financial reporting by a governmental entity?
37) Expenditures should be budgeted by character. An example of
a character classification is
38) Which of the following funds is accounted for on the
modified accrual basis of accounting?
39) Several years ago, Durham City issued $1 million in zero
coupon bonds due and payable in 2010. The bonds were sold at an amount to yield
investors 6% over the life of the bonds. During the current year, how much
interest expenditures would Durham City recognize related to these bonds?
40) As used in governmental accounting, interperiod equity
refers to a concept of
41) The state has a legally separate State Building Authority,
which has a board appointed by the Governor. The authority issues debt in its
name, holds title to buildings in its name, and leases its building exclusively
to the state. The authority would be considered a(n)
42) Revenues of a not-for-profit organization should be reported
as
43) Financial statements for a church-supported college should
be prepared according to standards set by the
44) For a not-for-profit hospital, which of the following
financial statements is required?
45) What agency has the ultimate authority in defining
independence for publicly traded companies?
46) A report on internal control effectiveness by management of
public companies is required by which of the following:
47) Once sufficient predication has been established, what is
the first step a fraud examiner following the fraud theory approach should
take?
48) Which of the following best describes the objective of a
fraud examination?
49) Damages intended to punish a defendant and deter the
defendant and others from engaging in the same tortious conduct in the future
are called
50) Where a contract calls for action that violates a statute,
in a breach of contract case the court will
51) Ted’s Gifts and Sweets enters into a written contract with
Bannon Candies to supply Ted’s with 60 boxes containing a dozen coconut
clusters each month for sale to the public. The agreement contained an
integration clause. Before the first delivery under the contract, Ted and his
warehouse manager called Debbie, the Bannon’s account representative, to
request that the candies be delivered in special Valentine’s Day boxes. Debbie
told Ted, “Don’t worry, I’ll tell the shipping department to take care of
that.” When the candies were delivered, they were in standard cardboard boxes.
Ted called Bannon and threatened to sue for beach of contract. Will Ted prevail
in his suit?
52) Jane and Bill are married. They purchase a house and lot as
tenants by the entirety. Then Jane is killed in a car accident. Her will leaves
everything to her sister, Ruth. What will happen to Jane’s interest in the
property?
53) Which of the following is a correct statement of the
requirements for a bona fide occupational qualification?
54) Which of the following statements accurately describes the
workers’ compensation rules?
55) When a company holds between 20% and 50% of the outstanding
stock of an investee, which of the following statements applies?
56) On December 31, 2008, Kean Company changed its method of
accounting for inventory from weighted-average cost method to the FIFO method.
This change caused the 2008 beginning inventory to increase by $420,000. The
cumulative effect of this accounting change to be reported for the year ended
December 31, 2008, assuming a 40% tax rate, is
57) Which of the following serves as the highest authority for
tax research, planning, and compliance activities?
58) The retail inventory method is based on the assumption that
the
59) When an item of expense is paid and recorded in advance, it
is normally called
60) Antonio owns land held for investment with a basis of
$28,000. The city of Lafayette exercises the right of eminent domain and
Antonio receives a payment of $48,000. What is Antonio’s realized gain?
61) In April 2009 of this year, Emma acquired a machine for
$50,000 for use in her business. The machine is classified as 7-year property.
Emma elects out of bonus depreciation and does not expense the asset under Sec.
179. Emma’s depreciation on the machine this year is
62) During the current year, a corporation sells equipment for
$300,000 that it had purchased and placed in service in 2007. The equipment
cost $270,000, and $60,000 of depreciation deductions was allowed. The results
of the sale are
63) Susie owns a ranch in Wyoming, which Pat offers to purchase.
Susie is not willing to sell the ranch but is willing to exchange the ranch for
an apartment complex in Louisiana. The complex is available for sale. Pat
purchases the apartment complex in Louisiana from Jody and transfers it to
Susie in exchange for Susie’s ranch. The ranch and the complex each have a
$1,000,000 fair market value. Which of the following is true?
64) A married person who files a separate return can claim a
personal exemption for his or her spouse if the spouse is not the dependent of
another and has
65) Ricky has rented a house from Sarah since last year. The
rent is usually $800 per month, but Sarah reduced the monthly rent down to $600
for all 12 months this year in exchange for Ricky constructing an addition to
the house. The addition has a fair market value of $3,500. How much total
rental income must Sarah report this year?
66) Alex is a calendar-year sole proprietor. He began business
on December 1 of this year. He uses the accrual method of accounting. Alex had
the following collections in the same month: He collected $7,000 in December
from clients who paid cash for services to be performed next year. He collected
$5,000 in December for services performed during December, which he deposited
in an operating account on December 31 of this year. He collected $9,000 in
December on accounts receivable for services performed in December, which he
deposited in an operating account on January 2 of next year. What is the amount
Alex must include in his income for December?
67) Bianca is beneficiary of an $80,000 insurance policy on her
father’s life. Upon his death, she may elect to receive the proceeds in 5
yearly installments of $17,500 or may take the $80,000 lump sum. She elects to
take the lump sum payment. What are the tax consequences in year one?
68) Nonrefundable tax credits
69) Paul makes the following property transfers in the current
year: $22,000 cash to his wife, $34,000 cash to a qualified charity, $120,000 house
to his son, and $3,000 computer to an unrelated friend. The total of Paul’s
taxable gifts, assuming he does not elect gift splitting with his spouse,
subject to the unified transfer tax, is
70) Which of the following best describes the weight of a revenue
ruling?
71) Which of the following statements is true?
72) One consequence of a property distribution by a corporation
to a shareholder is
73) Joshua owns 100% of Steeler Corporation’s stock. Joshua’s
basis in the stock is $8,000. Steeler Corporation has E&P of $40,000. If
Steeler Corporation redeems 60% of Joshua’s stock for $50,000, Joshua must
report dividend income of
74) In computing the ordinary income of a partnership, a
deduction is allowed for
75) Which of the following would terminate a Subchapter S
election?
76) The function of auditing is
77) Auditing is based on the assumption that financial data are
verifiable. Data are verifiable when two or more qualified individuals,
78) Statement on Quality Control Standards No. 2 identifies
certain quality control elements that should be considered when performing
which types of services?
79) Internal auditors are primarily involved with
80) The statement that the reviewer “is not aware of any
material modifications that should be made to the statements in order for them
to be in conformity with GAAP” is known as
81) The assessment of inherent risk requires considering matters
that have a pervasive effect on assertions for all or many accounts and matters
that may pertain only to assertions for specific accounts. Which of the
following is an example of a pervasive effects matter?
82) Specific audit objectives are normally
83) The Committee of Sponsoring Organizations (COSO) report
identified five interrelated components of internal control. Since then, a
sixth category has been identified, which is
84) Which of the following necessary controls would address a
potential misstatement arising from a voucher being paid twice?
85) An effective accounting system should identify and record
only the valid transaction of the entity that occurred in the current period,
which relates to the
86) One of the six steps involved in performing analytical
procedures includes the following:
87) In a normal audit, the relationship between the level of
materiality used to plan the engagement and the level of materiality used to
evaluate evidence is that
88) Use of auditor judgment or of a risk matrix is necessary in
revising planned detection risk whenever
89) In the audit risk model, audit sampling applies to
90) Audit sampling is involved whenever an auditor
91) How can long-term assets best be tested for ownership?
92) How can long-term assets best be tested for current present
value?
93) Because of the effects of circulation, some audit evidence
is more reliable than other evidence. Which of the following is generally
considered to be most reliable?
94) Which of the following accounts in a merchandising company
is affected by both the revenue cycle and another cycle?
95) The auditor’s strategy in performing test counts during the
inventory observation is to
96) Which one of the following analytical procedures may
indicate possible inventory obsolescence problems when ratios are large?
97) The control of all funds during the count of cash on hand is
meant primarily to prevent
98) Whether the entity maintains effective controls to provide
reasonable assurance that private customer information obtained because of
e-commerce is protected is defined as
99) A lawyer’s refusal to respond to a letter of audit inquiry
normally requires the auditor to
100) Which of the following is a tort?
No comments:
Post a Comment