QUESTION Howard is a public accountant working for a local nonprofit. How is he likely being paid for his accounting services? A) a fee basis B) as a hired employee C) a salaried basis D) a standard industry rate E) only during income tax season ANSWER Answer: A Explanation: A) Unlike private accountants, who […]
Date: September 3rd, 2020
QUESTION Which is the main kind of audit that external auditors typically provide? A) independent audits B) certified internal audits C) forensic audits D) not-for-profit audits E) private audits ANSWER Answer: A Explanation: A) External auditors provide independent audits because they are not otherwise affiliated with the company that they are auditing.
Date: September 3rd, 2020
QUESTION Net sales are the funds received from all sales of the firm’s products. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Gross sales are the funds received from all sales of the firm’s products. Net sales are what are left after sales returns and allowances are subtracted from gross […]
Date: September 3rd, 2020
QUESTION Which of the following is a formal evaluation of a client’s financial records? A) annual report B) double-entry bookkeeping C) budget D) audit E) trial balance ANSWER Answer: D Explanation: D) An audit is a formal evaluation of a client’s financial records, usually by an outside independent agent, to determine their fairness and […]
Date: September 3rd, 2020
QUESTION The debt to owners’ equity ratio measures the extent to which a company uses debt to finance its operations. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: The debt to owners’ ratio consists of total liabilities divided by owners’ equity. If it is high, it means liabilities are too […]
Date: September 3rd, 2020
QUESTION Which of the following occurred as a direct result of a specific high-profile accounting scandal? A) the beginning of forensic accounting B) the beginning of independent audits C) the enactment of the Sarbanes-Oxley Act of 2002 D) the creation of the Government Accountability Office E) the rise of not-for-profit accounting ANSWER Answer: C […]
Date: September 3rd, 2020
QUESTION Return on assets is net income divided by net sales. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Return on assets is net income divided by total assets. Net income divided by net sales is return on sales.
Date: September 3rd, 2020
QUESTION Which of the following is NOT one of the roles of the Government Accountability Office? A) examining matters relating to the receipt and payment of public funds B) confronting waste and abuse within public sectors C) ensuring correct billing practices for government welfare programs D) confronting fraud within public sectors E) performing specialized accounting […]
Date: September 3rd, 2020
QUESTION The acid-test (or quick) ratio consists of current assets divided by current liabilities. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: The current ratio consists of current assets divided by current liabilities.
Date: September 3rd, 2020
QUESTION As an accountant for a large nonprofit organization, Carter knows that one of his chief responsibilities is to provide financial transparency. What is meant by financial transparency? A) giving stakeholders an accurate picture of what is happening to their money B) determining whether an organization is staying within its budget C) evaluating a client’s […]
Date: September 3rd, 2020
