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A government internal audit function is presumed to be free from organizational independence impairments for reporting internally when the head of the organization

(A)Is not accountable to those charged with governance.

(B)Performs auditing procedures that are consistent with generally accepted accounting principles.

(C)Is a line-manager of the unit under audit.

(D)Is removed from political pressure to conduct audits objectively, without fear of political reprisal.

Jenny'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:

(A)note (B)debit (C)credit (D)cost adjustment (E)deposit

Correct Answer: B

A corporation’s penalty for underpaying federal estimated taxes is

(A)Not deductible. (B)Fully deductible in the year paid. (C)Fully deductible if reasonable cause can be established for the underpayment. (D)Partially deductible.

Correct Answer: A

What is the difference between a balance sheet and a trial balance? Mark one answer:

(A)A trial balance does not show profit, a balance sheet does. (B)A trial balance is used at month end and a balance sheet at year end. (C)A trial balance is used to determine profit, a balance sheet to determine net assets. (D)A trial balance is used to close accounts, a balance sheet to open accounts. (E)A trial balance is an internal document, a balance sheet is an external document.

Correct Answer: E