Question 1

Vikram is an accountant employed by a large corporation.He works for the billing and taxation department.He is most likely to be a:

Accepted Answer

Vikram is described as working for a specific corporation in the billing and taxation department, which aligns with the role of a private accountant. Private accountants work internally for organizations, managing their financial records and transactions.

Question 2

A Certified Public Accountant has the right to:

Accepted Answer

A Certified Public Accountant (CPA) is authorized to officially express an unbiased opinion on the accuracy of a client's financial statements. This is a fundamental aspect of their role in auditing and assurance services, ensuring that financial statements are presented fairly in all material respects. The other options involve actions that are either unethical, outside the scope of their responsibilities, or not permitted by professional standards.

Question 3

The _____ required firms to be more rigorous in their accounting and reporting practices.

Accepted Answer

The Sarbanes-Oxley Act was enacted in response to a series of high-profile financial scandals to protect investors by improving the accuracy and reliability of corporate disclosures.

Question 4

CPA stands for:

Accepted Answer

CPA stands for Certified Public Accountant, which is a designation given to accounting professionals in many countries around the world who have passed a licensing examination and met other state requirements.

Question 5

Evelyn is a self-employed,state-certified accountant who provides the following accounting services - filing tax returns,preparing financial records,auditing corporate financial records.She is known as a:

Accepted Answer

Evelyn is described as a state-certified accountant who provides services such as filing tax returns, preparing financial records, and auditing corporate financial records. These activities are typical of a Certified Public Accountant (CPA), a designation that requires state certification.

Question 6

_____ involves analyzing financial documents in search of fraudulent entries or financial misconduct.

Accepted Answer

Forensic accounting is specifically focused on uncovering financial fraud, analyzing financial documents for legal cases, and investigating white-collar crimes.

Question 7

_____ is the movement of money through an organization over a daily,weekly,monthly,or yearly basis.

Accepted Answer

Cash flow refers to the movement of money into and out of a business or project. It is a key indicator of financial health, showing how well an organization manages its incoming and outgoing money over time.

Question 8

The terms accounting and bookkeeping are interchangeable.

Accepted Answer

Accounting encompasses a broader range of activities, including interpreting, classifying, analyzing, reporting, and summarizing financial data, whereas bookkeeping primarily involves the recording of financial transactions.

Question 9

Accounting refers to the process of:

Accepted Answer

Accounting involves the recording, measuring, and interpreting of financial information to provide insights into an organization's financial status to both internal and external stakeholders.

Question 10

Which of the following statements is true of Certified Public Accountant?

Accepted Answer

Certified Public Accountants (CPAs) offer a wide array of services, including but not limited to the preparation of financial records and the filing of tax returns for individuals and businesses. This versatility in service provision is a hallmark of their profession.

Question 11

Individuals and businesses can hire a _____ to,an individual,to provide accounting services ranging from the preparation of financial records and the filing of tax returns to complex audits of corporate financial records.

Accepted Answer

Certified Public Accountants (CPAs) are professionals who are licensed to provide a range of accounting services, including the preparation of financial records, filing of tax returns, and conducting audits of corporate financial records. Other certifications listed may specialize in different areas of accounting or finance, but CPAs are specifically recognized for their broad authority and expertise in public accounting practices.

Question 12

The balance sheet indicates what an organization owns or controls.

Accepted Answer

The balance sheet is a financial statement that shows what an organization owns (assets) or controls, what it owes (liabilities), and the owners' equity at a specific point in time.

Question 13

Cash from investing activities is calculated from changes in the long-term liability accounts and the contributed capital accounts in owners' equity.

Accepted Answer

Cash from investing activities is calculated from changes in long-term asset accounts, not from changes in long-term liability accounts or the contributed capital accounts in owners' equity.

Question 14

Which of the following is a requirement stated by the Sarbanes-Oxley Act?

Accepted Answer

The Sarbanes-Oxley Act, enacted in response to financial scandals, requires firms to maintain independence between their auditing and consulting services to prevent conflicts of interest and ensure the integrity of financial reporting.

Question 15

Non-business entities typically obtain revenues through the sale of their assets.

Accepted Answer

Non-business entities, such as non-profit organizations or government agencies, typically obtain revenues through donations, grants, or taxes rather than through the sale of assets.

Question 16

Which of the following statements is true of bookkeeping?

Accepted Answer

Bookkeeping specifically refers to the process of systematically recording, organizing, and maintaining financial transactions on a day-to-day basis, which is distinct from the more analytical and comprehensive scope of accounting.

Question 17

In accounting,a ledger is a time-ordered list of accounting transactions.

Accepted Answer

A ledger is a collection of accounts in which transactions are recorded, categorized, and summarized; it is not primarily organized by time but by account.

Question 18

Which of the following is a function of the Public Company Accounting Oversight Board?

Accepted Answer

The Public Company Accounting Oversight Board (PCAOB) is responsible for making rules and policies for accounting firms and businesses, particularly those involved in auditing public companies, to ensure the accuracy and integrity of financial statements and reports.

Question 19

The _____ limits the types of assets commercial banks can buy; the amount of capital they must maintain; and the use of derivative instruments such as options,futures,and structured investment products.

Accepted Answer

The Dodd-Frank Act imposes regulations on financial institutions, including commercial banks, to limit their investment activities, require certain capital levels, and oversee the use of complex financial instruments to prevent another financial crisis.

Question 20

A forensic accountant:

Accepted Answer

Forensic accountants specialize in analyzing financial documents to identify fraudulent activities, financial misconduct, or irregularities within the financial statements of organizations or individuals.

Quiz 14: Accounting and Financial Statements