HUI 13.doc

CLICK HERE TO DOWNLOAD THIS ANSWER INSTANTLY

1. An example of fraud would be:
Issuing a purchase order without first securing bids.
Buying raw materials from an affiliated company.
Knowingly classifying a noncurrent receivable as a current receivable.
Forgetting to accrue salaries and wages payable.
2. If an independent auditing firm expresses dissatisfaction with a company’s financial statement, it issues:
A qualified opinion.
An unqualified opinion.
A disqualified opinion.
A rejection of opinion.
3. The adjusting entry required to record accrued expenses includes:
A credit to cash.
A debit to an asset.
A credit to an asset.
A credit to liability.
4. Independent auditors express an opinion on the:
Fairness of financial statements.
Accuracy of financial statements.
Soundness of a company’s future.
Quality of a company’s management.
5. Which of the following accounts are closed at the end of the accounting period?
Allowance for uncollectibles
Unearned revenue
Retained earnings
Provision for income taxes
6. In its 2004 annual report, Apple Computer reported the following in one of its disclosure notes: “Warranty Expense: The Company provides currently for the estimated cost for product warranties at the time the related revenue is recognized.” This note exemplifies Apple’s use of:
Conservatism
The matching principle
Realization principle
Full disclosure principle
7. The principal concern with accounting for related party transactions is:
The size of the transactions.
Differences between economic substance and legal form.
The absence of legally binding contracts.
The lack of accurate data to record transactions.
8. Making insurance payments in advance is an example of:
An accrued revenue transaction.
An accrued expense transaction.
A deferred revenue transaction.
A deferred expense transaction.
9. Recognizing expected losses immediately, but deferring expected gains, is an example of:
Materiality.
Conservatism.
Cost effectiveness.
Timeliness
10. The best argument in support of historical cost information is:
Relevance.
Predictive quality for future cash flows.
Materiality.
Verifiability.