Question : 71.Generally accepted accounting principles: A.Are based official decrees only. B.Are based tradition : 1237424

 

 

71.Generally accepted accounting principles:   

A.Are based on official decrees only.

 

B.Are based on tradition only.

 

C.Are based on an accountant’s experience only.

 

D.May change over time.

 

 

 

 

72.The Sarbanes-Oxley Act of 2002 created:   

A.The Security and Exchange Commission.

 

B.The Financial Accounting Standards Board.

 

C.The Public Company Accounting Oversight Board.

 

D.The Income Tax Return Overview Board.

 

 

 

 

73.Overseeing a company’s affairs to ensure that the company is managed with the best interest of shareholders in mind is called:   

A.Internal control.

 

B.Financial integrity.

 

C.Corporate governance.

 

D.The audit function.

 

 

 

 

74.The basic purpose of an audit is to:   

A.Assure financial statements are in conformity with GAAP.

 

B.Provide as much useful information to decision makers as possible, regardless of cost.

 

C.Record changes in the financial position of an organization by applying the concepts of double entry accounting.

 

D.Meet an organization’s need for accounting information as efficiently as possible.

 

 

 

 

75.Audits of financial statements are performed by:   

A.The controller of the reporting company.

 

B.The Financial Accounting Standards Board (FASB).

 

C.The management of the reporting company.

 

D.Independent certified public accountants (CPAs).

 

 

 

 

76.The auditor’s report on the published financial statements of a large corporation should be viewed as:   

A.The opinion of independent experts as to the overall fairness of the statements.

 

B.The opinion of the corporation’s chief accountant as to the overall fairness of the statements.

 

C.A guarantee by a firm of certified public accountants that the statements are accurate.

 

D.A guarantee by the Financial Statements Insurance Board that the statements do not overstate assets or net income.

 

 

 

 

77.The set of standards, assumptions, and concepts that form the “ground rules” for financial reporting in the United States is termed:   

A.The conceptual framework.

 

B.Generally accepted accounting principles.

 

C.Statements of Financial Accounting Concepts.

 

D.American standards for certified public accountants.

 

 

 

 

78.The basic purpose of generally accepted accounting principles is to:   

A.Minimize the possibility of a business becoming insolvent.

 

B.Provide a framework for financial reporting that is understood by both the preparers and the users of financial statements.

 

C.Ensure that financial statements include the type of information that is best suited to every type of business decision.

 

D.Eliminate the need for professional judgment in preparing financial statements.

 

 

 

 

79.Establishing international accounting standards is the responsibility of:   

A.AICPA.

 

B.IASB.

 

C.SEC.

 

D.AAA.

 

 

 

 

80.Generally accepted accounting principles are intended to assist accountants in preparing financial statements that:   

A.Are relevant, verifiable, comparable, and understandable.

 

B.Show the business to be both solvent and profitable.

 

C.Comply with all income tax rules and regulations.

 

D.Are ideally suited to the specific needs of each user of the financial statements.

 

 

 

 

 

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