Quiz-Review-Ch1-2-3

The review of financial statements to assess their fairness and adherence to GAAP is:

• auditing

• accounting

• accounting system

• management advisory services

Which of the following is not a requirement to become a certified bookkeeper?

• Pass the national certified bookkeeper exam

• Sign a code of ethics

• Complete a number of required college courses

• Submit evidence of work experience

Which of the following is not a common internal control and fraud prevention policy?

• requiring written proof that transactions are authorized

• separating duties among employees

• requiring written proof that payments are authorized

• preventing multiple payments to a single creditor from being made in a single day

Which of the following is not a service typically provided by a public accounting firm?

• Auditing

• Tax accounting

• Management advisory services

• Investing services

The entity that has final authority over the financial reporting of publicly owned corporations is the

• Securities and Exchange Commission (SEC).

• Financial Accounting Standards Board (FASB).

• Federal Trade Commission (FTC).

• Internal Revenue Service (IRS).

Which of the following is not a provision of the Sarbanes-Oxley Act?

• The Sarbanes-Oxley Act allows accountants to offer a broad range of consulting services to publicly traded companies that they audit.

• The Sarbanes-Oxley Act requires accounting firms to change the lead audit or coordinating partner and the reviewing partner for a company every five years.

• It is a felony to “knowingly” destroy or create documents to “impede, obstruct or influence” any existing or contemplated federal investigation.

• Wall Street investment firms are prohibited from retaliating against analysts who criticize investment-banking clients of the firm.

Which of the following is a user of financial information who is considered to be inside the business?

• owners

• suppliers

• customers

• unions

The following are all characteristics of a sole proprietorship except:

• The owner of a sole proprietorship is legally responsible for the debts of the business.

• A sole proprietorship is legally separate from its owner.

• The owner’s income and the income of the business are combined to compute the total tax responsibility of the owner.

• The life of the business ends when the owner is no longer willing or able to keep the business going.

Which of the following is not considered to be a social entity?

• public school

• city

• for-profit business

• public hospital

Which of the following is not a characteristic of an S Corporation?

• the corporation’s owners are personally responsible for the debts of the business

• the corporation pays no income tax

• the corporation is a separate entity from its owners

• the corporation has an indefinite life