QUESTION The Mystery Book Nook is a new shop in a busy suburban mall. Which of the following will contribute to a healthy activity ratio for it? A) having a high owners’ equity B) keeping enough cash on hand C) having high net sales revenues D) having enough liquidatable assets E) maintaining a small inventory […]
Date: September 3rd, 2020
QUESTION Why is it important that external audits be independent audits? What will be an ideal response? ANSWER Answer: External audits must be independent because the outsiders for which they are performed rely on them being unbiased opinions about the truth of the financial data being reviewed. Explanation: External auditors perform audits under the […]
Date: September 3rd, 2020
QUESTION Briefly summarize the six steps of the accounting process. What will be an ideal response? ANSWER Answer: In the accounting process, an accountant finds and sorts records, puts daily transactions in journals, puts journal entries in categories in a ledger, tests the accuracy of the ledger by running a trial balance, reports on […]
Date: September 3rd, 2020
QUESTION What is a forensic accountant? What will be an ideal response? ANSWER Answer: A forensic accountant investigates suspected crimes within the field of finance, such as fraud. They also investigate crimes against property, give expert testimony in court trials, and perform work related to civil disputes. Explanation: A forensic accountant investigates suspected crimes […]
Date: September 3rd, 2020
QUESTION Why is it important that there are GAO accountants? What will be an ideal response? ANSWER Answer: GAO accountants serve to “police” our government spending. They find many ways to save billions of dollars collected from taxpayers and also work to stop mismanagement, fraud, and waste within all levels of government spending. Explanation: […]
Date: September 3rd, 2020
QUESTION What is the difference between tax accounting and managerial advisory services? What will be an ideal response? ANSWER Answer: In tax accounting, the CPA concentrates on preparing tax returns and doing tax planning; however, when he or she provides management advisory services, specialized accounting services are provided to help business managers resolve various […]
Date: September 3rd, 2020
QUESTION What is the significance of the SEC’s move toward accommodating International Financial Reporting Standards? What will be an ideal response? ANSWER Answer: By moving toward this international accounting standard, the SEC is moving the United States and, in fact, the world toward one set of international standards, which will make it easier for […]
Date: September 3rd, 2020
QUESTION Which of the following tracks incoming and outgoing money and shows how the firm got and used money? A) the balance sheet B) the income statement C) the statement of cash flows D) the retained earnings report E) the owners’ equity statement ANSWER Answer: C Explanation: C) The statement of cash flows indicates […]
Date: September 3rd, 2020
QUESTION Procter & Gamble just released its latest income statement. What is the statement most likely to be used for? A) determining what P&G is worth B) determining whether P&G is profitable C) determining P&G’s tax liability D) determining P&G’s owners’ equity E) determining whether P&G should sell assets ANSWER Answer: B Explanation: B) […]
Date: September 3rd, 2020
QUESTION Which of the following represents the accounting equation? A) liabilities = assets + owners’ equity B) owners’ equity = assets + liabilities C) assets = liabilities + owners’ equity D) assets = liabilities – owners’ equity E) assets = owners’ equity – liabilities ANSWER Answer: C Explanation: C) The accounting equation is: assets […]
Date: September 3rd, 2020
