Question 1

An inventory loss from a market decline occurred in the first quarter that was not expected to be restored in the fiscal year.For interim financial reporting purposes,how would the dollar amount of inventory in the balance sheet be affected in the first and fourth quarters? First Quarter Fourth Quarter

Accepted Answer

A)  Decrease No effect
B)  Decrease Increase
C)  No effect Decrease
D)  No effect No effect A

Question 2

A major impact of the Foreign Corrupt Practices Act of 1977 is that registrants subject to the Securities Exchange Act of 1934 are now required to

Accepted Answer

A)  Keep records which reflect the transactions and dispositions of assets and maintain a system of internal accounting controls
B)  Provide access to records by authorized agencies of the federal government
C)  Records all correspondence with foreign nations
D)  Prepare financial statements in accordance with international accounting standards

Question 3

Which of the following situations would require adjustment to or disclosure in the financial statements?

Accepted Answer

A)  A merger discussion
B)  The application for a patent on a new production process
C)  Discussions with a customer that could lead to a 40 percent increase in the client's sales
D)  The bankruptcy of a customer who regularly purchased 30 percent of the company's output

Question 4

List and discuss the recognition criteria for the two types of subsequent events.

Accepted Answer

These events are referred to as "subsequ...

Question 5

Footnote disclosure that summarizes information that does not meet the measurement and reporting requirements for presentation in a company's financial statements,but is useful to informed readers,is required in order to meet the concept of

Accepted Answer

A)  Understandability.
B)  Reliability.
C)  Representational faithfulness.
D)  Cost/benefit.

Question 6

Which of the following should be disclosed in a Summary of Significant Accounting Policies?

Accepted Answer

A)  Depreciation method followed
B)  Types of executory contracts
C)  Claims of equity holders
D)  Amount for cumulative effect of change in accounting principle

Question 7

Assuming that none of the following have been disclosed in the financial statements,the most appropriate item for footnote disclosure is the

Accepted Answer

A)  Collection of all receivables subsequent to year end
B)  Revision of employees' pension plan
C)  Retirement of president of company and election of new president
D)  Material decrease in the advertising budget for the coming year and its anticipated effect upon income

Question 8

List the four sections of the AICPA Code of Professional Conduct.

Accepted Answer

The Code of Professional Conduct in cons...

Question 9

The AICPA recently redrafted the majority of the auditing sections in the Codification of

Accepted Answer

Statements on Auditing Standards,includi...

Question 10

The inclusion of MD&A Management Discussion and Analysis) in annual reports is required by the

Accepted Answer

A)  FASB.
B)  AICPA.
C)  SEC.
D)  APB.

Question 11

Which of the following should be disclosed in the Summary of Significant Accounting Policies?

Accepted Answer

A)  Composition of plant assets
B)  Pro forma effect of retroactive application of an accounting change
C)  Basis of consolidation
D)  Maturity dates of long-term debt

Question 12

Statement of Net Assets in Liquidation: A statement that includes information about the net assets available for distribution to investors and other claimants during liquidation as of the end of the reporting period'

Accepted Answer

The ASU also requires disclosures about ...

Question 13

The Sarbanes-Oxley SOX) Act of 2002 created the PCAOB.The PCAOB

Accepted Answer

A)  Is primarily responsible for establishing generally accepted accounting principles.
B)  Provides legal and expert services to CPA firms when they are involved in class-action law suits.
C)  Oversees the conduct of acts that are intended to influence,coerce,manipulate,or mislead a CPA when he/she is preparing a company's financial statements.
D)  Oversees audits of companies whose securities are public traded.

Question 14

Conboy Corporation disclosed in the notes to its financial statements that a significant number of its unsecured trade account receivables are with companies that operate in the same industry.This disclosure is required to inform financial statement users of the existence of

Accepted Answer

A)  Concentration of market risk.
B)  Risk of measurement uncertainty.
C)  Off-balance sheet risk of accounting loss.
D)  Concentration of credit risk.

Question 15

A CPA is subject to a criminal ability if the CPA

Accepted Answer

A)  Refuses to turn over the working papers to the client
B)  Performs an audit in a negligent manner
C)  Willfully omits a material fact required to be stated in a registration statement
D)  Willfully breaches the contract with the client

Question 16

The primary responsibility for the adequacy of disclosure in the financial statements and footnotes rests with the

Accepted Answer

A)  Partner assigned to the engagement
B)  Auditor in charge of fieldwork
C)  Staff who draft the statements and footnotes
D)  Client

Question 17

Footnotes to financial statements should not be used to

Accepted Answer

A)  Describe the nature and effect of a change in accounting principles
B)  Identify substantial differences between book and tax income
C)  Correct an improper financial statement presentation
D)  Indicate bases for valuing assets C

Question 18

The Securities and Exchange Commission SEC) was established in1934 to help regulate the U.S.securities market.Which of the following statements is true concerning the SEC?

Accepted Answer

A)  The SEC prohibits the sale of speculative securities.
B)  The SEC regulates only securities offered for public sale.
C)  Registration with the SEC guarantees the accuracy of the registrant's prospectus.
D)  The SEC's initial influence and authority has diminished in recent years as the stock exchanges have become more organized and better able to police themselves. B

Question 19

Discuss the general requirements of Sections 404a)and 404b)of the Sarbanes-Oxley Act.

Accepted Answer

Section 404 contains two subsections-404...

Question 20

Footnotes to a company's financial statements are used to

Accepted Answer

A)  More fully explain certain items in the financial statements.
B)  Reflect financial notes personalized by the company's executive team.
C)  Show the detail of salaries of every employee.
D)  Justify fraudulent business practices.

Exam 17: Financial Reporting Disclosure Requirements and Ethical Responsibilities

Correct Answer
verified
A

A major impact of the Foreign Corrupt Practices Act of 1977 is that registrants subject to the Securities Exchange Act of 1934 are now required to

Correct Answer
verified

Which of the following situations would require adjustment to or disclosure in the financial statements?

Correct Answer
verified

List and discuss the recognition criteria for the two types of subsequent events.

Correct Answer
verified
These events are referred to as "subsequ...
View Answer

Footnote disclosure that summarizes information that does not meet the measurement and reporting requirements for presentation in a company's financial statements,but is useful to informed readers,is required in order to meet the concept of

Correct Answer
verified

Which of the following should be disclosed in a Summary of Significant Accounting Policies?

Correct Answer
verified

Assuming that none of the following have been disclosed in the financial statements,the most appropriate item for footnote disclosure is the

Correct Answer
verified

List the four sections of the AICPA Code of Professional Conduct.

Correct Answer
verified
The Code of Professional Conduct in cons...
View Answer

The AICPA recently redrafted the majority of the auditing sections in the Codification of

Correct Answer
verified
Statements on Auditing Standards,includi...
View Answer

The inclusion of MD&A Management Discussion and Analysis) in annual reports is required by the

Correct Answer
verified

Which of the following should be disclosed in the Summary of Significant Accounting Policies?

Correct Answer
verified

Statement of Net Assets in Liquidation: A statement that includes information about the net assets available for distribution to investors and other claimants during liquidation as of the end of the reporting period'

Correct Answer
verified
The ASU also requires disclosures about ...
View Answer

The Sarbanes-Oxley SOX) Act of 2002 created the PCAOB.The PCAOB

Correct Answer
verified

Conboy Corporation disclosed in the notes to its financial statements that a significant number of its unsecured trade account receivables are with companies that operate in the same industry.This disclosure is required to inform financial statement users of the existence of

Correct Answer
verified

A CPA is subject to a criminal ability if the CPA

Correct Answer
verified

The primary responsibility for the adequacy of disclosure in the financial statements and footnotes rests with the

Correct Answer
verified

Footnotes to financial statements should not be used to

Correct Answer
verified
C

The Securities and Exchange Commission SEC) was established in1934 to help regulate the U.S.securities market.Which of the following statements is true concerning the SEC?

Correct Answer
verified
B

Discuss the general requirements of Sections 404a)and 404b)of the Sarbanes-Oxley Act.

Correct Answer
verified
Section 404 contains two subsections-404...
View Answer

Footnotes to a company's financial statements are used to

Correct Answer
verified

Exam 17: Financial Reporting Disclosure Requirements and Ethical Responsibilities

Correct AnswerverifiedA

A major impact of the Foreign Corrupt Practices Act of 1977 is that registrants subject to the Securities Exchange Act of 1934 are now required to

Correct AnswerverifiedShow Answer

Which of the following situations would require adjustment to or disclosure in the financial statements?

Correct AnswerverifiedShow Answer

List and discuss the recognition criteria for the two types of subsequent events.

Correct AnswerverifiedThese events are referred to as "subsequ...View AnswerShow Answer

Footnote disclosure that summarizes information that does not meet the measurement and reporting requirements for presentation in a company's financial statements,but is useful to informed readers,is required in order to meet the concept of

Correct AnswerverifiedShow Answer

Which of the following should be disclosed in a Summary of Significant Accounting Policies?

Correct AnswerverifiedShow Answer

Assuming that none of the following have been disclosed in the financial statements,the most appropriate item for footnote disclosure is the

Correct AnswerverifiedShow Answer

List the four sections of the AICPA Code of Professional Conduct.

Correct AnswerverifiedThe Code of Professional Conduct in cons...View AnswerShow Answer

The AICPA recently redrafted the majority of the auditing sections in the Codification of

Correct AnswerverifiedStatements on Auditing Standards,includi...View AnswerShow Answer

The inclusion of MD&A Management Discussion and Analysis) in annual reports is required by the

Correct AnswerverifiedShow Answer

Which of the following should be disclosed in the Summary of Significant Accounting Policies?

Correct AnswerverifiedShow Answer

Statement of Net Assets in Liquidation: A statement that includes information about the net assets available for distribution to investors and other claimants during liquidation as of the end of the reporting period'

Correct AnswerverifiedThe ASU also requires disclosures about ...View AnswerShow Answer

The Sarbanes-Oxley SOX) Act of 2002 created the PCAOB.The PCAOB

Correct AnswerverifiedShow Answer

Conboy Corporation disclosed in the notes to its financial statements that a significant number of its unsecured trade account receivables are with companies that operate in the same industry.This disclosure is required to inform financial statement users of the existence of

Correct AnswerverifiedShow Answer

A CPA is subject to a criminal ability if the CPA

Correct AnswerverifiedShow Answer

The primary responsibility for the adequacy of disclosure in the financial statements and footnotes rests with the

Correct AnswerverifiedShow Answer

Footnotes to financial statements should not be used to

Correct AnswerverifiedC

The Securities and Exchange Commission SEC) was established in1934 to help regulate the U.S.securities market.Which of the following statements is true concerning the SEC?

Correct AnswerverifiedB

Discuss the general requirements of Sections 404a)and 404b)of the Sarbanes-Oxley Act.

Correct AnswerverifiedSection 404 contains two subsections-404...View AnswerShow Answer

Footnotes to a company's financial statements are used to

Correct AnswerverifiedShow Answer

Correct Answer
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A

Correct Answer
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Correct Answer
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Correct Answer
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These events are referred to as "subsequ...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified
The Code of Professional Conduct in cons...
View Answer

Correct Answer
verified
Statements on Auditing Standards,includi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The ASU also requires disclosures about ...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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C

Correct Answer
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B

Correct Answer
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Section 404 contains two subsections-404...
View Answer

Correct Answer
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