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Another name for an income statement is a: Mark one answer:

(A)Statement of cash flows

(B)Balance sheet

(C)Operating statement

(D)Statement of owner’s equity

(E)Profit & loss statement

The purchase of treasury stock would be shown under which section on the statement of cash flows? Mark one answer:

(A)Operating (B)Investing (C)Financing (D)Supplemental (E)It is not reported on the statement of cash flows.

Correct Answer: C

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

A tax return preparer may disclose or use tax return information without the taxpayer’s consent to

(A)Facilitate a supplier’s or lender’s credit evaluation of the taxpayer. (B)Accommodate the request of a financial institution that needs to determine the amount of taxpayer’s debt to it, to be forgiven. (C)Be evaluated by a quality or peer review. (D)Solicit additional nontax business.

Correct Answer: C