IAAO 501 Exam Questions And Answers
100% Pass
Audit - answerSystematic and methodical examination of records with the intent to berify
their accuracy
Financial Accounting Standards Board (FASB) - answerEstablishes the guidelines that are
referred to as the Generally Accepted Accounting Princip...
Audit - answer✔Systematic and methodical examination of records with the intent to berify
their accuracy
Financial Accounting Standards Board (FASB) - answer✔Establishes the guidelines that are
referred to as the Generally Accepted Accounting Principles (GAAP)
Four major categories of personal property are - answer✔Inventories
Fixed Assets
Leasehold improvements
Intangibles
Inventories - answer✔Example is goods in process
Three characteristics of fixed assets - answer✔Tangible: they possess physical substance and
presence
Acquired for use in the business and not for resale
Items are of a relatively permanent nature
Intangible Personal Property - answer✔Property that represents evidence of value or the right
to value under custom and law
Three characteristics of the cost approach - answer✔Based on principle of substitution
Greatest strength include broad applicability and readily available data
Greatest weakness is the estimate of depreciation
Replacement cost new - answer✔The cost required to replace the property unit with a new one
of like utility in today's market
Historical cost - answer✔The cost of the item at the time it was initially acquired by the original
iser
Three approaches to value - answer✔Income approach
Sales comparison approach
Cost approach
Property tax listing form - answer✔The most important document an assessor can use in
obtaining a complete report of a taxpayers personal property
Accounting profession can be divided into two major areas - answer✔Public
Private
Assets are normally divided into the following accounts - answer✔Cash
Notes receivable
Accounts receivable
Prepaid expenses
Land
Building
Equipment, furniture and fixtures
Other assets - inventory, intangibles
double entry system - answer✔a system that records the two sided effect of each transaction in
appropriate accounts - debuts and credits
Depreciation - answer✔Reduction in cost or loss in value
Two forms of depreciation - answer✔Accounting depreciation - cost recovery
Appraising depreciation - loss of market value
A=L+C - answer✔Assets = liabilities + capital
The most reliable source of information to personal property auditoe - answer✔Taxpayers
accounting records
Three types of audits - answer✔Review
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