Governing Bodies
GAAP stands for ...
Generally Accepted Accounting Principles
Mary Little, CPA, is preparing the financial statements of ABC Corporation. Mary makes sure that information capable of making a difference in a user’s decision-making is included in the financial statements. Which quality of accounting information has been followed?
Relevance
Thomason Corporation is based in the United States. When preparing its financial statements, the corporation failed to include the purchase of a new tractor-trailer truck in the general ledger, which was made on December 31st. What concept is Thomason Corporation violating?
Recognition Concept
A local accounting firm wrote in a recommendation for Mary that she possesses a great deal of integrity and has excellent basic skills in literacy and computation. This is classified as which skill?
Foundation Skills
Jason demonstrates accuracy and truthfulness when he works with his accounting clients. This is an
example of which key principle for ethics in accounting?
Integrity
AICPA stands for ...
American Institute of Certified Public Accountants
Jones CPA Firm received a request from AAA Credit for copies of Amy Johnson’s federal tax return. Jones CPA Firm sent a copy of the tax return to AAA Credit without asking Ms. Johnson. Which specific rule of conduct is Jones CPA Firm violating?
Confidential Client Information
During the preparation of the Toys4U Company’s financial statement, one of the accountants has to decide between two alternative methods of valuing Inventory. He decides to choose the method that reports the highest amount. Which constraint did the accountant follow?
Conservatism Constraint
John has applied for a position as Chief Financial Officer for a Fortune 500 company. He listed as his
qualifications that he is a problem-solver and has the ability to plan and resolve issues. This is classified as
which skill?
21st Century Skill
Brian is an accountant in a local firm. He submits an accounting report to his manager that suggests an
action that will ultimately benefit him monetarily. This example is a violation of which key principle for
ethics in accounting?
Independence
Lucy has been a Certified Public Accountant for 5 years. One of Lucy’s clients is a public company whose stock is offered on the New York Stock Exchange. During her audit of the company, Lucy discovers that several of the assets on the financial statements are deliberately misstated. Which governing body should Lucy advise of the finding?
Securities and Exchange Commission (SEC)
Betty’s Bookkeeping Service posted a sign that stated “Members of the AICPA”. The owner, Betty Wilson, has studied to take the CPA exam but has not yet taken it. Which specific rule of conduct did Betty’s Bookkeeping violate?
Form of Organization and Name
Donna Jones is the president and primary stockholder of Jones Enterprises. She keeps her personal income and her business income in the same checking account. Which of the following assumptions is she violating?
Business Entity Assumption
Lisa is applying for a position in a small insurance agency. The company is looking to hire an individual that can convert their manual accounting system to a computerized system. She listed on her application that she has an accounting degree as well as an emphasis in computerized systems. This is classified as which skill?
Workplace Skills
Jamie is an accountant. She knows that she is expected to produce accurate financial reports from her audit. She knows when she submits her report to her superiors her friend will suffer consequences for misappropriation of funds. Jamie submits an accurate report and follows which key principle for ethics in accounting?
Objectivity
IIA stands for ..
Institute of Internal Auditors
Nancy Smith, CPA has only prepared financial reports in her business. She has been asked to prepare a federal tax return for Michael Brown. Smith refuses to accept the engagement based on her experiences. Which general standard is being followed?
Professional Competence
Petersmith Corporation purchased a used work van for its business for $10,000. After doing some minor body work and repainting, the owner estimated that he could sell the van for $15,000. Therefore, the owner changed the Van amount on the balance from $10,000 to $20,000. Which principle did he violate?
Cost Principle
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Mary has applied for a position as an accounting clerk for a local company. She listed as her qualifications
that she is a problem-solver and needs little direction to complete assigned tasks. This is classified as which
skill?
21st Century Skills
Grace Associates, a CPA firm, is preparing an audit for GWM Corporation. Grace discovers that the financial statements have been intentionally altered to reflect a higher net income. To complete the audit quickly, Grace decides to leave this matter out of the audit report. Which specific rule of conduct does Grace violate?
Integerity and Objectivity
Who establishes and improves standards of financial accounting by nongovernmental entitles.
Financial Accounting Standards Board ( FASB )
What are the two primary qualities of an accountant?
Relevance and Reliability
Slim Stanley, CPA, has failed to complete his personal income tax returns for the past five years. Which specific rule of conduct has Slim violated?
Acts Discreditable
- Information & Communication
- Thinking & Problem Solving
- Interpersonal & Direction
Are all what type of skill ?
21st Century
Bill Carpenter, a CPA, is the Western region board member for NC FBLA. Bill's firm, Carpenter Associates, has been asked to prepare the audit for NC FBLA, and has asked that Bill be the lead auditor for the job. What specific rule of conduct will prevent Bill from accepting the offer?
Independence