Chapter 4Intercompany Transactions: Merchandise, Plant Assets, and Notes
1. Schiff Company owns 100% of the outstanding common stock of the Viel Company. During 20X1,
Schiff sold merchandise to Viel that Viel, in turn, sold to unrelated fi
Chapter 6Cash Flow, EPS, and Taxation
1. The cash purchase of 80% interest in a firm with no liabilities would be shown on the consolidated
statement of cash flows as
a. an operating activity.
b. a financing activity.
c. an investing activ
Chapter 15Governmental Accounting: The General Fund and the Account
1. What is the cornerstone of external financial reporting for governmental units and not-for-profit organizations?
a. show the flow of financial resources
b. to de
CPA EXAM MULTIPLE CHOICE QUESTIONS - Introduction to Auditing
1. Auditing standards differ from auditing procedures in that procedures relate to
a) Measure of performance.
b) Audit principles.
c) Acts to be performed.
d) Audit judgments.
2. The independen
ModuleDerivatives and Related Accounting Issues
A critical characteristic of a derivative is that the instrument
derives its value from a related asset or liability.
derives its value from changes in value of a related asset
Chapter 17Financial Reporting Issues
1. The GASB Statement No. 34 reporting model includes, but is not limited to which of the following reports?
Government-wide financial statements
a management discussion and analysis section
Chapter 11Translation of Foreign Financial Statements
The functional currency approach adopted by FASB 52 requires:
a. separate statements be maintained by the domestic parent company and the foreign branch
both in their own currencies
Chapter 8Subsidiary Equity Transactions; Indirect and Mutual Holdings
1. A parent company owns a 100% interest in a subsidiary. Recently, the subsidiary paid a 10% stock dividend. The dividend should be recorded on the books of the parent
Chapter 5Intercompany Transactions: Bonds and Leases
1. The usual impetus for transactions that create a long-term debtor-creditor relationship between members of a consolidated group is due to the:
a. subsidiary's ability to borrow larger
REVIEW 105 DAY 27
1. On July 2, 2003, Wynn, Inc., purchased as a short-term investment a $1,000,000
face value Kean Co. 8% bond for $910,000 plus accrued interest to yield 10%. The
bonds mature on January 1, 2010, pay interest annually on January 1, an
Chapter 3Consolidated Statements: Subsequent to Acquisition
Pedro purchased 100% of the common stock of the Sanburn Company on January 1, 20X1, for
$500,000. On that date, the stockholders' equity of Sanburn Company was $380,0
Chapter 19Accounting for Not-for-Profit Colleges and Universities and Health
1. What is the basis of accounting used in accounting for not-for-profit universities?
a. fund accounting
b. accrual basis
c. modified accrual
Chapter 16Governmental Accounting: Other Governmental Funds, Proprietary Funds, and Fiduciary Funds
1. Capital improvements which are financed by special assessment debt for which the government is obligated in some manner would be recorde
REVIEW 105 DAY 19
1. Which of the following statements is incorrect regarding internal use
a. The application and development costs of internal-use software should be
amortized on the straight line basis unless another systematic and rationa
Chapter 10Foreign Currency Transactions
The best definition for direct quotes would be "direct quotes measure
how much foreign currency must be exchanged to receive 1 domestic currency."
current or spot rates."
how much dome
Chapter 12Interim Reporting and Disclosures about Segments of an Enterprise
1. The primary emphasis of interim reporting is on:
a. interim cash flow
b. the interim statement of financial position
c. interim retained earnings
d. interim inc
Chapter 13Partnerships: Characteristics, Formation, and Accounting for Activities
1. Which of the following is NOT a characteristic of the proprietary theory that influences accounting for
a. Partners' salaries are viewed as
REVIEW 105 DAY 22
b. Fair value
c. The notes to financial statements should be presented in what order?
I. Statement of compliance with PFRS
II. Summary of significant accounting policies
III. Supporting computations for items presented on t
Chapter 9: Current Liabilities, Contingencies, and the Time Value of Money
1. Which of the following accounts is not classified as a current liability?
a. Taxes payable
c. Salaries payable
b. Note payable, due in three (3) years
1. During 2001, Olsen Company discovered that the ending inventories reported on its financial
statements were understated as follows:
Olsen ascertains year-end quantities on a periodic inventory syste
Chapter 18Accounting for Private Not-for-Profit Organizations
Which of the following is NOT a required characteristic of a private not-for-profit
organization per the definition given by the AICPA?
a. no owners or shareholders
b. an ope
REVIEW 105 DAY 25
1. Lewis Companys usual sales terms are net sixty days, FOB shipping point. Sales,
net of returns and allowances, totaled $2,300,000 for the year ended December 31,
2003, before year-end adjustments. Additional data are as follows:
Describe the characteristics of an account and record transactions using a chart of
Describe and illustrate the posting of journal entries to accounts.
Prepare an unadjusted tri
Process Cost Systems
Explain and illustrate the characteristics and cost flows for a process manufacturer.
Prepare a cost of production report accounting for completed units under the FIFO
Completing the Accounting Cycle
Describe the flow of accounting information from the unadjusted trial balance into
the adjusted trial balance and financial statements.
Prepare financial statements f
1. According to the FASB conceptual framework, which of the following situations violates the concept of reliability?
a. Data on segments having the same expected risks and growth rates are reported to analysts estimating future profits.
Describe the importance of control over inventory.
Describe three inventory cost flow assumptions and how they impact the income
statement and balance sheet.
Determine the cost of
The Adjusting Process
Describe the nature of the adjusting process.
Journalize entries for accounts requiring adjustment.
Summarize the adjustment process.
Prepare an adjusted trial balance.
Managerial Accounting Concepts and Principles
Describe managerial accounting, and the role of managerial accounting in a
Define and illustrate the following costs: direct and indirect, direct mate