A Chapter 7 bankruptcy is a(n)
A. involuntary reorganization.
B. bankruptcy forced by a company's creditors.
D. bankruptcy in which all creditors receive payment in full.
E. voluntary reorganization.
Where should a co
Chapter 04 - Legal Liability of CPAs
1. Fraud is defined as failure to use reasonable care in the performance of services.
2. Most of the burden of affirmative proof is on the defendant under common law.
3. The Ultramares v. Touche case held t
Cherryhill and Hace had been partners for several years, and they decided to admit Quincy to the
partnership. The accountant for the partnership believed that the dissolved partnership and the newly
formed partnership were two separate
Chapter 05 - Audit Evidence and Documentation
1. The professional standards consider calculating depreciation expense a "routine"
2. The most reliable form of documentary evidence generally is considered to be documents
created by the c
Which one of the following is not a division of the SEC?
A. The Division of Corporation Finance.
B. The Division of Investment Management.
C. The Division of Compliance Information.
D. The Division of Enforcement.
E. The Division of Tra
Chapter 03 - Professional Ethics
1. The Rules portion of the AICPA Code of Professional Conduct must be followed by only
those members in private practice.
2. The AICPA Code of Professional Conduct derives its authority from the Bylaws of the
The value of something is how it is perceived.
Bear Stearns- stocks go down, rumor that they are running out of cash flow
enormous bank running out of cash.
Had 18B in cash reserve, Stearns and officers say rumors are false
Big into mortgages
Socratic style of teaching- between individuals, based on asking and answering questions to stimulate critical thinking and to illuminate ideas. discussion in which the defense of one point of view is questioned;
one participant may lead another to contra
When a partnership is insolvent and a partner has a deficit capital balance, that partner is legally required
A. declare personal bankruptcy.
B. initiate legal proceedings against the partnership.
C. contribute cash to the partnersh
In accounting, the term translation refers to
A. the calculation of gains or losses from hedging transactions.
B. the calculation of exchange rate gains or losses on individual transactions in foreign currencies.
C. the procedure requir
When a person dies without leaving a valid will, how is the distribution of his or her property
A. In accordance with federal inheritance laws.
B. In accordance with generally accepted accounting principles.
C. In accordance
In the United States, foreign companies filing annual reports with the SEC that are not prepared in
accordance with U.S. GAAP must:
A. present financial statements that comply with international GAAP.
B. conform with U.S. GAAP or presen
Chapter 02 - Professional Standards
1. To express an opinion on financial statements, the auditor obtains reasonable assurance
about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error.