ACC-240 Fundamentals of Accounting

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All states have enacted legislation that requires a minimum of ___ semester hours to be granted licensure as a CPA.

150

Partnership

A group of proprietors who have banded together

Proprietorship

An activity conducted by an individual

An internal auditor is responsible for

Analyzing the operating efficiency of one of the company's divisions. Performing functions much like those performed by an independent (external) auditor, but perhaps on a smaller scale.

___ procedures have been thoroughly systematized using manual, mechanical, and computer techniques.

Bookkeeping

The subset of managerial accounting related to the determination and accumulation of product, process, or service costs is know as ___ accounting.

Cost

___ relates to the determination and accumulation of product, process, or service costs.

Cost accounting

Financial Accounting

The process that results in the preparation and reporting of financial statements for an entity.

The result of an audit is the

Independent auditor's report

Accounting graduates are frequently employed in which of the following areas of practice?

Industrial accounting, working as management accountants for manufacturing, merchandising, or service firms. Non-for-profit accounting, working as accountants for colleges or universities, hospitals, or voluntary health and welfare organizations.

Primary users of a firm's accounting information.

Management, regulatory agencies, employees, investors.

___ is concerned with the use of economic and financial information to plan and control the activities of an entity.

Managerial accounting

Accounting information is required by governmental units at which of the following levels?

Municipal, federal, state

The cash flow activities for an entity are reported for a ___ of time.

Period or point

Three principal forms of business organization

Proprietorship, partnership and corporation

Big 4 CPA firms

Deloitte Touche Tohmatsu (Deloitte), EY (formerly Ernst & Young), KPMG International (KPMG), PricewaterhouseCoopers (known as PwC).

The "controller" is usually responsible for both the ___ and ___ accounting functions of the organization.

Financial; managerial

Balance Sheet

statement of financial position

Tax practitioners typically develop specialization in the taxation of which if the following? A) Partnerships whose annual profit exceeds $5 million B) Trust and estates C) Partnerships whose financial statements include amounts in excess of $1 million D) International tax law issues

B & D

Managerial accounting and cost accounting, when compared to financial accounting, have primarily an ___ orientation, and the data are more likely to be used in a ___way.

Internal; future-oriented

Accounting graduates are frequently employed in which of the following areas of practice?

Public accounting, such as auditing, tax return preparation, and financial planning. Governmental accounting, working as accountants at the state or local level of government.

An audit is required by ___ laws if the stock or bonds of a company are owned and ___ traded by investors.

Securities; publicly

Income Statement

Statement of earnings, or profit and loss statement or statement of operations

A qualified audit opinion may be issued in which of the following cases?

When the independent auditor determines that one or more items as shown in the financial statements are not presented fairly. When an explanatory paragraph is added regarding the firms inability to continue as a going concern.

Audits are required for companies...

Whose securities (stocks or bonds) are publicly traded by investors.

Accounting

the process of identifying, measuring, and communicating economic information about an organization for the purpose of making decisions and informed judgements.

Which entities are responsible for performing an audit?

Public accounting firms Individual CPAs

An unqualified, or, clean, independent auditor's opinion does which of the following?

States that the named financial statements "present fairly, in all material respects" the entity's cash flows for the period. States that the named financial statements "present fairly, in all material respects" the entity's results of operations for the period. States that the named financial statements "present fairly, in all material respects" the financial position of the entity. Describe briefly the work that is involved in performing an audit. States that it is the independent auditor's responsibility to express an opinion about the financial statements. Explains that the audit was conducted in accordance with the standards of the GAAP (United States).

Bookkeeping Procedures

are used to accumulate the financial results of many of an entity's activities.

Managerial Accounting

Concerned with the use of economic and financial information to plan, control, and support the management decision-making process.

Financial statements are primarily oriented toward the ___ user and are primarily concerned with ___ information.

External; past

A qualified audit opinion may be issued in cases where which of the following are true?

The independent auditor determines that one or more items presented in the financial statements, represent a significant departure from GAAP. The independent auditor is unable to perform certain auditing procedures.

True or false: A CPA exam is given nationally but is administered by individual states; thus each state has its own education and experience requirements to sit for the exam and be granted licensure as a CPA.

True

True or false: The title "controller" is used to designate the chief accounting officer of a corporation.

True

True or false: an unqualified, or "clean" independent auditor's opinion states that the auditor's work requires the application of generally accepted auditing standards (GAAS).

True

True or false: the qualifications of an internal auditor are similar to those of any other professional accountant.

True


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