Spring Financial Accounting 2101
CHAPTER 3 CMQ Questions
These are questions that had the
lowest success rates.
The ending retained earnings balance of Juan's
Mexican Restaurant chain increased by $4.3
million from the beginning of the year. T
Which of the following is not one of the three main reasons why the auditor should properly
a. To enable proper on-the-job training of employees.
b. To enable the auditor to obtain sufficient
CHAPTER 10 Long-Term Liabilities
OVERVIEW OF EXERCISES, PROBLEMS, AND CASES
Learning Outcomes Exercises Estimated Time in Minutes Level
1. Identify the components of the long-term liability category of the balance sheet. 2. Define the important characteri
While performing services for their clients, professionals have a duty to provide a level of care
a. free from judgment errors.
c. greater than average.
Auditing standards require that the audit report must be titled and that the title must:
a. include the word independent.
b. indicate if the auditor is a CPA.
c. indicate if the auditor is a proprietorship, pa
Which of the following is not a condition for a contingent liability to exist?
a. There is a potential future payment to an outside party that would result from a current
b. There is uncertainty ab
Liability - A present responsibility to sacrifice assets in
the future due to a transaction or other event that
happened in the past.
Current liabilities are usually, but not
Inventory and Cost of Goods
Includes items a company intends for sale to
customers. For example, clothes at The Limited,
shoes at Payless ShoeSource, building supplies
at Home Depot, etc.
Also includes items that are not yet fini
Recognition of Accounts
Common for large business
transactions in which buyers dont
have sufficient cash available or
where credit cards cannot be used
because the transaction amount
Cash and Internal Controls
The Impact of Accounting
Scandals and the Sarbanes-Oxley
Managers are entrusted with the resources of
both the companys lenders (liabilities) and
owners (stockholders' equity).
The Financial Reporting
Revenue and Expense
Accounting information necessary for decision
To be useful in decision making accountants must
report revenues and expenses in a way that
Roles of Financial
Measure business activities of the
Communicate those measurements to
external parties for decision-making
Measuring Business Activities
Identify the Basic Step
CHAPTER 2 CMQ Questions
These are questions that
had the lowest success
Summer Leasing received $10,300
for 24 months rent in advance. How
Debit Rent Expense; credit Cash.
Statement of Cash
Formatting the Statement of
Statement of Cash Flows
Provides a summary of cash inflows and cash outflows
during the reporting period
Statement of Cash Flows
For the Year Ended December 31, 2
Comparison of Financial
In performing vertical analysis, we express
each item in a financial statement as a
percentage of the same base amount.
UNDER AMROUR AND NIKE
Accounting Information and
Introducing the Leading Team
And the back up crew
Accounting as a
A Basic Understanding of Accoun
Which one of the following is not one of the three General Standards?
a. Proper planning and supervision.
b. Independence of mental attitude.
c. Adequate training and proficiency.
d. Due professional care.
Society has attached a special meaning to the term professional. A professional is:
a. someone who has passed a qualifying exam to enter the job market.
b. a person who is expected to conduct himself or hersel
The objective of the ordinary audit of financial statements is the expression of an opinion on:
a. the fairness of the financial statements.
b. the accuracy of the financial statements.
c. the accuracy of the
Auditors must make decisions regarding what evidence to gather and how much to accumulate.
Which of the following is a decision that must be made by auditors related to evidence?
If it is probable that the judgment of a reasonable person would have been changed or
influenced by the omission or misstatement of information, then that information is, by
definition of FASB Statement No. 2:
Which of the following is responsible for establishing a private companys internal control?
c. Management and auditors.
d. Committee of Sponsoring Organizations.
Which of the following best defines fraud in a financial statement auditing context?
Fraud is an unintentional misstatement of the financial statements.
Fraud is an intentional misstatement of the finan
A listing of all the things which the auditor will do to gather sufficient, competent evidence is
a. audit strategy.
b. audit program.
c. audit procedure.
d. audit risk model.
Shown below (1 th
Which of the following is not an account affected by the sales and collection cycle?
b. Accounts receivable
c. Allowance for doubtful accounts
d. Gross margin
Which of the following is not o
A sample in which the characteristics of the sample are the same as those of the population is
a. variables sample.
b. representative sample.
c. attributes sample.
d. random sample.
When the a