...Following are multiple choice questions recently released by the AICPA. These questions were released by the AICPA with letter answers only. Our editorial board has provided the accompanying explanations. Please note that the AICPA generally releases questions that it does NOT intend to use again. These questions and content may or may not be representative of questions you may see on any upcoming exams. 2007 AICPA Newly Released Questions – Auditing 1. CPA-05465 Which of the following categories is included in generally accepted auditing standards? a. b. c. d. Standards of review. Standards of planning. Standards of fieldwork. Standards of evidence. ANSWER: Choice "c" is correct. Generally accepted auditing standards include three categories: general standards, standards of fieldwork, and standards of reporting. Choices "a", "b", and "d" are incorrect, based on the above explanation. 1 2007 AICPA Newly Released Questions – Auditing 2. CPA-05466 A retailing entity uses the Internet to execute and record its purchase transactions. The entity's auditor recognizes that the documentation of details of transactions will be retained for only a short period of time. To compensate for this limitation, the auditor most likely would: a. b. c. d. Compare a sample of paid vendors' invoices to the receiving records at year-end. Plan for a large measure of tolerable misstatement in substantive tests. Perform tests several times during the year, rather than only at year-end. Increase...
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...Gleim EQE Test Prep: Auditing and Systems (10 questions) ACC400 Auditing, Chapter 1-2 Pre Quiz Name: Date: [1] Gleim #: 1.1.1 -- Source: CPA 1193 A-9 In performing an attestation engagement, a CPA typically A. B. C. D. Supplies litigation support services. Assesses control risk at a low level. Provides management consulting advice. Expresses a conclusion about an assertion. Answer (A) is incorrect. Litigation support services are consulting services. Answer (B) is incorrect. The CPA assesses control risk in an audit but not necessarily in all attest engagements. Furthermore, the assessment may not be at a low level. Answer (C) is incorrect. An attest engagement results in a conclusion about an assertion. Answer (D) is correct. When a CPA in the practice of public accounting performs an attest engagement, the engagement is subject to the Statements on Standards for Attestation Engagements (codified as AT 101 to AT 801). An attest engagement is one in which a practitioner is engaged to issue or does issue an examination, a review, or an agreed-upon procedures report on subject matter, or an assertion about the subject matter, that is the responsibility of another party. [2] Gleim #: 1.1.7 -- Source: CPA, adapted A CPA is required to comply with the provisions of Statements on Standards for Attestation Engagements (SSAE) when engaged to A. Review management’s discussion and analysis (MD&A) prepared pursuant to rules and regulations adopted by the SEC. B. Report on financial...
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...Ninth Edition CPA Preparatory Program Regulation Negotiable Instruments Sample Brian Hock, CMA, CIA with Dave Fairchild, CPA, CMA HOCK international, LLC P.O. Box 204 Oxford, Ohio 45056 (866) 807-HOCK or (866) 807-4625 (281) 652-5768 www.hockinternational.com cma@hockinternational.com Published August 2011 Acknowledgements Material from Uniform CPA Examination, Selected Questions and Unofficial Answers, Copyright © 1990-2011 by the American Institute of Certified Public Accountants, Inc., is reprinted and/or adapted with permission. Acknowledgement is due to the Institute of Certified Management Accountants for permission to use questions and problems from past CMA Exams. The questions and unofficial answers are copyrighted by the Certified Institute of Management Accountants and have been used here with their permission. © 2011 HOCK international, LLC No part of this work may be used, transmitted, reproduced or sold in any form or by any means without prior written permission from HOCK international, LLC. Thanks The author would like to thank the following people for their assistance in the production of this material: Kevin Hock for his work in the formatting and layout of the material, Lynn Roden, CMA for her assistance in the technical elements of the material, All of the staff of HOCK Training and HOCK international for their patience in the multiple revisions of the material, The students of HOCK Training in all of our classrooms and...
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...Multiple Choice—CPA Adapted Chapter 14 – Long Term Liabilities 1. On July 1, 2010, Spear Co. issued 1,000 of its 10%, $1,000 bonds at 99 plus accrued interest. The bonds are dated April 1, 2010 and mature on April 1, 2020. Interest is payable semiannually on April 1 and October 1. What amount did Spear receive from the bond issuance? a. $1,015,000 b. $1,000,000 c. $990,000 d. $965,000 2. On January 1, 2010, Solis Co. issued its 10% bonds in the face amount of $3,000,000, which mature on January 1, 2020. The bonds were issued for $3,405,000 to yield 8%, resulting in bond premium of $405,000. Solis uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31. At December 31, 2010, Solis's adjusted unamortized bond premium should be a. $405,000. b. $377,400. c. $364,500. d. $304,500. 3. On July 1, 2009, Noble, Inc. issued 9% bonds in the face amount of $5,000,000, which mature on July 1, 2015. The bonds were issued for $4,695,000 to yield 10%, resulting in a bond discount of $305,000. Noble uses the effective-interest method of amortizing bond discount. Interest is payable annually on June 30. At June 30, 2011, Noble's unamortized bond discount should be a. $264,050. b. $255,000. c. $244,000. d. $215,000. 4. On January 1, 2010, Huff Co. sold $1,000,000 of its 10% bonds for $885,296 to yield 12%. Interest is payable...
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...Becker CPA Review, PassMaster Questions Lecture: Financial 1 CPA PassMaster Questions-Financial 1 Export Date: 10/30/08 1 © 2009 DeVry/Becker Educational Development Corp. All rights reserved. Becker CPA Review, PassMaster Questions Lecture: Financial 1 Sources of GAAP CPA-00001 Type1 M/C A-D Corr Ans: D PM#1 F 1-01 1. CPA-00001 FARE Nov 95 #1, Released 2006 Page 6 According to the FASB conceptual framework, the objectives of financial reporting for business enterprises are based on: a. Generally accepted accounting principles. b. Reporting on management's stewardship. c. The need for conservatism. d. The needs of the users of the information. CPA-00001 Explanation Choice "d" is correct. The FASB conceptual framework states that the objectives of financial reporting stem from the informational needs of the external users of the information. SFAC 1 para. 28 ...
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...same thing consistently. For example, it would be appropriate to give a keyboarding test to a candidate applying for a job as an administrative assistant. However, it would not be valid to give a keyboarding test to a candidate for a job as a physical education teacher. If a keyboarding test is given to the same individual on two separate occasions, the results should be similar. To be effective predictors, a selection device must possess an acceptable level of consistency. Application forms For most employers, the application form is the first step in the selection process. Application forms provide a record of salient information about applicants for positions, and also furnish data for personnel research. Interviewers may use responses from the application for follow-up questions during an interview. These forms range from requests for basic information, such as names, addresses, and telephone numbers, to comprehensive personal history profiles detailing applicants' education, job experience skills, and accomplishments. According to the Uniform Selection Guidelines of the EEOC, which establish standards that employers must meet to prevent disparate or unequal treatment, any employment requirement is a test, even a job application. As a result, EEOC considerations and application forms are interrelated, and managers should make sure that their application forms do not ask questions that are irrelevant to job success, or...
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...ACC3101 Student Activities Module 5 Solutions SUGGESTED ANSWERS TO DISCUSSION QUESTIONS Discussion Questions P 11.13 Prepare a DFD context, Level 0 [pic] [pic] P 11.10 Prepare a Document flowchart [pic] Ethics Use Stakeholder analysis framework to answer the ethical dilemma below (Horngren et al 5th ed p128) The net profit of Bynum & Hobbs, a department store, decreased sharply during the first part of 2008. Ron Bynum, owner of the store, anticipated the need for a bank loan in the last months of 2008. In June 2008, Bynum instructs the store’s accountant to record a $6 000 sale of furniture to the Bynum family, even though the goods won’t be shipped from the manufacturer until July 2008. Recommended stakeholder analysis steps: (NOTE: this is a full answer but you may have other issues and or recommendations to make. Words in BOLD are key statements to make for gaining marks in an exam.) 1. Recognise the ethical situation/dilemma. The owner is proposing an unethical treatment of revenue. Bynum & Hobbs a department store that expects to seek a loan in the future due to downturn of business, so the change is likely to be material if a $6 000 sale will make all the difference to getting or not getting the loan. Revenue must be recognised when it is earned. This occurs when ‘the seller has transferred to the buyer the significant risk and rewards of ownership’, in other words when the goods are delivered (AASB 118, para...
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...CHAPTER 1 INTRODUCTION: THE ROLE, HISTORY, AND DIRECTION OF MANAGEMENT ACCOUNTING QUESTIONS FOR WRITING AND DISCUSSION 1. A management accounting information system is an information system that produces outputs using inputs and processes needed to satisfy specific managerial objectives. 2. The inputs of a management accounting information system are economic events. The processes transform the inputs into outputs and are such things as collecting, measuring, storing, analyzing, reporting, and managing. Typical outputs include special reports, product costs, customer costs, performance reports, budgets, and personal communication. 3. The three objectives of a management accounting information system are as follows: To provide information for costing out services, products, and other objects of interest to management; to provide information for planning, controlling, evaluation, and continuous improvement; and to provide information for decision making. 4. All organizations — manufacturing, merchandising, and services — must have a good management accounting information system. Management accounting concepts and procedures are not restricted to any one type of organization. 5. The users of management accounting information are managers and workers within the organization. Anyone internal to an organization is a potential user of management accounting information. 6. Management accounting information is used to cost out objects (for example, services and products) and to aid in...
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...CHAPTER 6 Audit Planning, Understanding the Client, Assessing Risks, and Responding Review Questions 6–1 In their investigation of a prospective client, the CPAs should assess the backgrounds and reputations of the prospect and its major shareholders, directors, and officers. Thus, inquiries are made of underwriters, bankers, and attorneys that conduct business with the prospective client. Also, the CPAs are required to make inquiries of the prospect’s predecessor auditors to obtain information that might enter into the acceptance decision, such as information regarding the integrity of management. The prospect’s financial reports, SEC filings, credit reports, and tax returns are used as sources of financial background information. 6–2 The audit committee of a board of directors must be composed of at least three independent directors. Independent directors are those who are outside directors (not officers or employees) who have no relationships that might impair their independence. This would include relationships such as performing consulting services for company management. In addition, the members must be financially literate; at least one member must be a financial expert. 6–3 An engagement letter is sent to the client by the auditors to make clear the nature of the engagement, any limitations on the scope of the audit, work to be performed by the client’s staff, and the basis for computing the auditors’ fee. The engagement letter...
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...CHAPTER 6 Audit Planning, Understanding the Client, Assessing Risks, and Responding Review Questions 6–1 In their investigation of a prospective client, the CPAs should assess the backgrounds and reputations of the prospect and its major shareholders, directors, and officers. Thus, inquiries are made of underwriters, bankers, and attorneys that conduct business with the prospective client. Also, the CPAs are required to make inquiries of the prospect’s predecessor auditors to obtain information that might enter into the acceptance decision, such as information regarding the integrity of management. The prospect’s financial reports, SEC filings, credit reports, and tax returns are used as sources of financial background information. 6–2 The audit committee of a board of directors must be composed of at least three independent directors. Independent directors are those who are outside directors (not officers or employees) who have no relationships that might impair their independence. This would include relationships such as performing consulting services for company management. In addition, the members must be financially literate; at least one member must be a financial expert. 6–3 An engagement letter is sent to the client by the auditors to make clear the nature of the engagement, any limitations on the scope of the audit, work to be performed by the client’s staff, and the basis for computing the auditors’ fee. The engagement letter...
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...CPA Australia Page 1 of 18 Global Strategy and Leadership Self Assessment Test The following self-assessment questions are provided to help you review your Global Strategy and Leadership studies. http://myonlinelearning.cpaaustralia.com.au/scripts/WebObjects.dll/fileserver.woa/f/... 28/02/2011 CPA Australia Page 2 of 18 Exercise Question 1 Which one of the following statements captures most accurately the relationship between industry profitability and Porter's five forces? A. Industry profitability is likely to be highest when there is high supplier power. B. The higher the threat of new entrants, the higher industry profitability is likely to be. C. Moderate buyer power and moderate level of rivalry is likely to increase industry profitability. D. Low levels of rivalry and low supplier power are likely to be associated with higher industry profitability. E. Industry profitability is likely to be lowest when the threat of substitutes is declining. Question 2 Which one of the following statements about supplier power is most likely to be correct? A. The smaller the quantities of supplies purchased by companies in the industry, the higher the supplier power relative to industry rivals. B. The higher the threat by suppliers’ to forward integrate, the lower their power relative to industry rivals. C. The higher the importance of the suppliers’ input to rivals, the more power industry rivals have in negotiating with suppliers. D. The higher the number of suppliers...
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...CHAPTER 11 DEPRECIATION, IMPAIRMENTS, AND DEPLETION IFRS questions are available at the end of this chapter. TRUe-FALSe—Conceptual Answer No. Description T 1. Nature of depreciation. F 2. Nature of depreciation. T 3. Depreciation, depletion, and amortization. T 4. Definition of depreciation base. F 5. Factors involved in depreciation process. F 6. Definition of inadequacy. T 7. Objection to straight-line method. F 8. Units-of-production approach. F 9. Accelerated depreciation method. T 10. Declining-balance method. T 11. Group or composite approach. F 12. Use of the composite approach. T 13. Accounting for changes in estimates. F 14. Computation of impairment loss amount. T 15. First step in determining an impairment. T 16. Reporting impaired assets held for disposal. F 17. Method used to compute depletion. T 18. Costs included in depletion base. F 19. Computing asset turnover ratio. T 20 Profit margin on sales ratio. Multiple Choice—Conceptual Answer No. Description d 21. Knowledge of depreciation accounting. b 22. Conceptual rationale for depreciation accounting. c 23. Depreciation and retaining funds. b S24. Definition of depreciation. a S25. Service life vs. physical life. a P26. Definition of depreciable cost. d 27. Economic factors affecting useful service life. d 28. Factors involved in computing depreciation. d 29. Straight-line method assumption. a 30. Activity method of depreciation. ...
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...三 True/False Questions 1. Job-order costing is used in manufacturing companies and process costing is used in service companies. Ans: False AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 1 Level: Easy 2. A flour manufacturer is more likely to use process costing than job-order costing whereas a manufacturer of customized leather jackets is more likely to use job-order costing than process costing. Ans: True AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 1 Level: Easy 3. Normally a job cost sheet is not prepared for a job until after the job has been completed. Ans: False AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2 Level: Medium 4. Job cost sheets contain entries for actual direct material, actual direct labor, and actual manufacturing overhead cost incurred in completing a job. Ans: False AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2 Level: Easy 5. Multiple departmental overhead rates generally provide more accurate product costs than a single plant-wide overhead rate. Ans: True AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 3 Level: Easy 6. If direct labor-hours is used as the allocation base in a job-order costing system, but overhead costs are not caused by direct-labor-hours, then jobs with high direct labor requirements will tend to be overcosted relative to jobs with low direct labor requirements. Ans: True...
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...CHAPTER 9 AUDITING COMPUTER-BASED INFORMATION SYSTEMS SUGGESTED ANSWERS TO DISCUSSION QUESTIONS 9.1 Since most organizations make extensive use of computer-based systems in processing accounting data, it is essential that computer expertise be available in the organization's audit group. Such expertise should include: * Extensive knowledge of computer hardware, software, and accounting applications * A detailed understanding of appropriate control policies and procedures in computer systems * An ability to read and understand system documentation * Experience in planning computer audits and in using modern computer auditing techniques. All internal auditors may not possess expertise in all of these areas. However, there is certainly some minimum level of computer expertise that is appropriate for all auditors. This would include: * An understanding of computer hardware, software, accounting applications, and controls. * The ability to examine all elements of the computerized AIS * The ability to use the computer as a tool to accomplish these auditing objectives. ...
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...Becker CPA Review, PassMaster Questions Lecture: Financial 6 CPA PassMaster Questions–Financial 6 Export Date: 10/30/08 1 © 2009 DeVry/Becker Educational Development Corp. All rights reserved. Becker CPA Review, PassMaster Questions Lecture: Financial 6 Pension Plans CPA-00679 Type1 M/C A-D Corr Ans: D PM#1 F 6-01 1. CPA-00679 FARE R02 #8 a. b. c. d. Page 19 Which of the following disclosures is not required of companies with a defined-benefit pension plan? A description of the plan. The amount of pension expense by component. The weighted average discount rate. The estimates of future contributions. CPA-00679 Explanation Choice "d" is correct. Although pension accounting has extensive disclosures, projections of future contributions into a pension plan are not required. "a", "b", and "c" are required disclosures. CPA-00681 Type1 M/C A-D Corr Ans: C PM#2 F 6-01 2. CPA-00681 FARE R99 #13 Page 9 Jan Corp. amended its defined benefit pension plan, granting a total credit of $100,000 to four employees for services rendered prior to the plan's adoption. The employees, A, B, C, and D, are expected to retire from the company as follows: "A" will retire after three years. "B" and "C" will retire after five years. "D" will retire after seven years. What is the amount of prior service cost amortization in the first year? a. b. c. d. $0 $5,000 $20,000 $25,000 CPA-00681 Explanation Choice "c" is correct. Amortization of unrecognized prior...
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