QUESTION Caroline is primarily concerned with preparing accounting information and analyses for people outside her organization. What type of accounting does she do? A) financial accounting B) managerial accounting C) regulatory accounting D) private accounting E) certified management accounting ANSWER Answer: A Explanation: A) Financial accounting is primarily concerned with preparing accounting information and […]
QUESTION If Bennett is a private certified management accountant, which of the following statements is TRUE about him? A) He needs only a degree in accounting to do his job. B) He does the same work as a public accountant. C) He only works for for-profit organizations. D) He works for only one business. E) […]
QUESTION Bradley is a CPA in Chicago. He offers many important services to his clients. Which of the following is LEAST likely to be among the services Bradley offers? A) independent audits B) tax accounting C) management advisory services D) forensic accounting E) accounting system design ANSWER Answer: D Explanation: D) The principal services […]
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 […]
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.
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 […]
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 […]
QUESTION The advent of computers and accounting software has made the services of accountants unnecessary. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Although computers and accounting have vastly speeded up and simplified accounting, accountants are still necessary and to some extent have been freed up to more productively focus […]
QUESTION The purpose of double-entry bookkeeping is to act as a check on errors. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Double-entry bookkeeping acts as a check on errors because each transaction is recorded in two different accounts: both as a credit and a debit.
QUESTION Accounting principles used by different accountants may vary. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Accounting relies on generally accepted accounting principles as standards to ensure financial statements are relevant, reliable, consistent, and comparable.
