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| Section | Objectives |
|---|---|
| Topic 1: Financial Accounting Fundamentals | - Accounting Principles
|
| Topic 2: Managerial Accounting for Decision Making | - Cost Behavior
|
| Topic 3: Business Decision Support | - Performance Measurement
|
1. Which body regulates a certified public accounting firm's audit practices when the firm is auditing a large, publicly traded company?
A) The Internal Revenue Service (IRS)
B) The Financial Accounting Standards Advisory Council (FASAC)
C) The Public Company Accounting Oversight Board (PCAOB)
D) The Financial Accounting Standards Board (FASB)
2. Which current asset on a balance sheet appears first in the traditional category order for U.S.-based companies?
A) Inventory
B) Prepaid expenses
C) Cash
D) Accounts receivable
3. What can be determined when a firm performs an external audit of a company's financial statements?
A) Whether a company's financial statements indicate it made a profit
B) Whether a company's financial statements fairly reflect its financial position
C) Whether a company's financial statements were prepared by a trained bookkeeper
D) Whether a company's financial statements indicate that the company has to pay income taxes
4. Which two items on an income statement result in decreased net income if they are increased?
Choose 2 answers.
A) Interest expense
B) Revenues
C) Cost of goods sold
D) Gains
5. Which formula yields a cash times interest earned ratio of 11?
A) Cash before interest and taxes of $11,000 / cash paid for acquisitions of $1,000
B) Cash before interest and taxes of $11,000 / cash paid for interest of $1,000
C) Cash before interest and taxes of $11,000 / cash from operations of $1,000
D) Cash before interest and taxes of $11,000 / cash paid for income taxes of $1,000
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: C | Question # 3 Answer: B | Question # 4 Answer: A,C | Question # 5 Answer: B |
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