In AICPA professional standards, the word should indicates an (a)
(A)Interpretive suggestion that does not constitute a professional requirement.
(B)Unconditional requirement with which the auditor is obligated to comply.
(C)Presumptively mandatory requirement from which the CPA may depart in rare circumstances.
(D)Recommendation that has no authoritative status.
Jim's Jeans decided to shut down their Jimmy Jean Division. Where on the income statement would this closing be addressed? Mark one answer:
(A)Under extraordinary items at the bottom of the income statement. (B)As a note on the operating income section of the income statement. (C)Under discontinued operations at the bottom of the income statement. (D)As a deduction in the Net Profit section of the income statement. (E)An entry would be on the operating income section of the income statement.
Correct Answer: C
The purpose of the trial balance is to:
(A)Check the solvency of the company (B)Identify credits and debits (C)Analyze the accounting period (D)Verify that credits equal debits (E)Find misclassified transactions
Correct Answer: D
King, CPA, was engaged to audit the financial statements of Newton Company after its fiscal year had ended. King neither observed the inventory count nor confirmed the receivables by direct communication with debtors, but was satisfied concerning both after applying alternative procedures.King’s auditor’s report most likely contained a(n)
(A)Qualified opinion (B)Disclaimer of opinion. (C)Unmodified opinion. (D)Unmodified opinion with an other-matter paragraph.
Correct Answer: C
More CPA Exam Questions
- 1If a corporation issues a 10-year $100,000 8% bond, what is the total that the issuing corporation pays to the bondholder over the next 10 years? Mark one answer:
- 2Jim's Jeans is being sued by a former employee for $100,000. The employee is claiming age discrimination. She is twenty-four and was terminated when Jim decided that he wanted all employees to be over the age of sixty-five. Jim's attorney has told him that the employee has a strong case and will probably win. How does this impact Jim's accounting records? Mark one answer:
- 3Jenny's Bakery recently delivered a bad batch of cakes to a local restaurant. Jenny quickly refunded the cost of the cakes to the restaurant. Her accountant made a _____ to her Refunds of Sales account for this transaction:
- 4If a share of cumulative preferred stock has a call price of $95 and has had four years of dividends of $5 each, what is the book value of that share of stock? Mark one answer:
- 5Cartman's Cats has $1,000,000 in assets after purchasing Big Bertha's Birds, along with $500,000 in liabilities. It has 500 shares capital stock outstanding. What is the book value of each share of stock? Mark one answer: