Accounting 101
This accounting basis recognizes revenue when earned, and expenses when incurred.
What is accrual accounting?
This kind of audit opinion is issued when the auditor i) concludes that financials are materially misstated, or ii) is unable to obtain audit evidence to conclude whether financials are free from material misstatement.
What is a modified opinion? (Qualified / adverse / disclaimer of - all acceptable)
These must be identified & implemented in order to combat threats to a CPA's compliance with the Code of Professional Conduct.
What are safeguards?
These kinds of income & expenses which are treated differently & are considered generally outside of the scope of an entity's ordinary business income are listed on the Schedule K and called:
What are separately stated items?
HBO Max recently wasted its name recognition and goodwill by rebranding their streaming service to this.
What is Max?
What is Lower of Cost and Net Realizable Value (LCNRV)?
This is conducted from source documents to assess the completeness of an entity's financial statements.
What is tracing?
This entity issues CPA licenses (not certificates) to qualified individuals in Texas.
What is the Texas State Board of Public Accountancy?
Instead of sales taxes, non-US countries generally levy this kind of tax on goods & services?
What are value-added taxes (VATs)?
This indie rock frontman lasted several weeks as Taylor Swift's newest controversial partner.
Who is Matty Healy?
The FMV of a stock divided by its earnings per share gives you the stock's:
What is a Price-to-Earnings (PE) Ratio?
These kinds of reports cover management's description of i) their system of controls, and ii) suitability of the design of the controls, to be used by auditors.
What are SOC Reports?
Set of US Treasury regulations that determine the rules of and individuals who can practice before the IRS.
What is Circular 230?
This must be done to an entity's sales, property, and/or payroll to determine their income tax in a given state.
What is apportionment?
This country is the only country that shares the same citizenship-based taxation system as the United States.
What is Eritrea?
This is recorded to opening retained earnings in order to correct a misstatement related to a previous reporting period.
What is a prior period adjustment?
An audit on both an issuer's i) financial statements & ii) its internal control over financial reporting (ICFR)
What is an integrated audit?
This kind of threat arises when a CPA has a financial interest in a client, or excessively relies on their fees.
What is a self-interest threat?
This kind of tax is levied on transfers of property to recipients at least two generations apart from transferor.
What is generation-skipping transfer (GST) tax?
Property undergoes this when government organizations claim private property under imminent domain.
What is involuntary conversion?
This is recorded to reduce the carrying value of a bond closer to its fair market value.
What is amortization of bond premium?
List two accounting responsibilities that should be segregated to ensure internal control over financial reporting.
What is i) authorization of transactions, ii) recording / posting transactions, iii) custody of assets, & iv) comparison / reconciliation of financial reports?
This level / amount of direct financial interest in a client impairs the independence of a CPA with respect to the client.
What is any amount?
Income earned by a controlled foreign corporation resulting from activity with related parties involving property created & sold outside of the foreign nation is considered:
What is Subpart F income?
Tom Cruise leads a secret jet mission with America's best pilot recruits against this US-hating country in Top Gun: Maverick.
Who knows? (they never specify!)