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.
The controller of a small utility company has interviewed audit firms proposing to perform the annual audit of their employee benefit plan. According to the guidelines of the Department of Labor (DOL), the selected auditor must be
(A)The firm that proposes the lowest fee for the work required. (B)Independent for purposes of examining financial information required to be filed annually with the DOL. (C)Included on the list of firms approved by the DOL. (D)Independent of the utility company and NOT relying on its services.
Correct Answer: B
Which of the following is subtracted from net sales to determine gross profit?
(A)Mark one answer: (B)Cost of goods sold (C)Expenses (D)Both cost of goods sold and expenses (E)Cost of goods sold, expenses, and taxes (F)Taxes
Correct Answer: A
Which of the following transactions have a negative impact on cash? Mark one answer:
(A)A decrease in supplies on hand (B)Proceeds from selling equipment used in the business (C)A loss on selling equipment used in the business (D)Dividends declared and paid (E)An increase in income taxes payable
Correct Answer: D
More CPA Exam Questions
- 1In AICPA professional standards, the word should indicates an (a)
- 2The General Fund pays an invoice for telecommunications that includes charges owed by the Water Utility Enterprise Fund. The Enterprise Fund subsequently remits its share of the telecommunications charges to the General Fund. The General Fund records the amount received from the Enterprise Fund as:
- 3Nala Inc. reported deferred tax assets and deferred tax liabilities at the end of 20X4 and at the end of 20X5. Acording to FASB 109, for the year ended 20X5, Nala should report deferred income tax expense or benefit equal to the
- 4If 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:
- 5King, 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)