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Exam (elaborations)

Bookkeeping Certification Exam Questions and Answers

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  • Course
  • Bookkeeping Certification
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  • Bookkeeping Certification

Bookkeeping Certification The review of financial statements to assess their fairness and adherence to GAAP is - Answer- auditing An independent accountant who performs financial audits is a - Answer- Certified Public Accountant (CPA) To become a CPA, an individual - Answer- must have a ce...

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  • August 4, 2024
  • 10
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • Bookkeeping Certification
  • Bookkeeping Certification

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Bookkeeping Certification
The review of financial statements to assess their fairness and adherence to GAAP
is - Answer- auditing

An independent accountant who performs financial audits is a - Answer- Certified
Public Accountant (CPA)

To become a CPA, an individual - Answer- must have a certain number of college
credits in accounting courses.
pass the Uniform CPA Examination.
fulfill the experience requirements of the state of practice.

Which of the following is not a service typically provided by a public accounting
firms? - Answer- Investing services

The entity that has final authority over the financial reporting of publicly owned
corporations is the - Answer- Securities and Exchange Commission (SEC).

Which of the following is not a provision of the Sarbanes-Oxley Act? - Answer- The
Sarbanes-Oxley Act allows accountants from offering a broad range of consulting
services to publicly traded companies that they audit.

The following are all government agencies except - Answer- American Institute of
Certified Public Accountants (AICPA).

The following are all characteristics of a sole proprietorship except: - Answer- A sole
proprietorship is legally separate from its owner.

The financial statements submitted by a corporation to the SEC include the auditor's
report. The auditor's report: - Answer- confirms that the financial information is
prepared in conformity with generally accepted accounting principles.

The group of accounting educators who perform research to determine the possible
effects on financial reporting and the economy and then offer their opinions about
proposed FASB statements is the - Answer- American Accounting Association
(AAA).

When J. Simmons, the owner, invests in her business, the transaction would be
entered on the - Answer- right side of the J. Simmons, Capital T account.

Modern products paid cash to a creditor. To record this transaction, the accountant
would - Answer- debit Accounts Payable and credit Cash.

The normal balance of an account is the - Answer- increase side of the account.

Which of the following types of accounts normally have debit balances? - Answer-
Expenses and assets

, Which of the following groups contain only accounts that normally have credit
balances? - Answer- Fees Income and John Smith, Capital

Which of the following decreases owner's equity? - Answer- Expenses

If the trial balance totals are not equal, the error may have been caused by a
transposition if the difference is divisible by - Answer- 9

The three financial statements are linked together because the - Answer- net income
from the income statement is used on the statement of owner's equity and the
ending balance of the capital account, computed on the statement of owner's equity,
is used on the balance sheet.

Which of the following accounts is not a permanent account? - Answer- Salaries
Expense

The Net Income amount from the Income Statement is used as a line item on which
statement? - Answer- the statement of owner's equity

Amounts that a business must pay in the future are known as - Answer- accounts
payable

The balance sheet is also called - Answer- the statement of financial position

When the owner invests cash in a business, - Answer- assets and owner's equity
increase.

When equipment is purchased on credit, - Answer- assets and liabilities increase.

When a business sells services on credit - Answer- assets increase and revenues
increase.

When a business collects an account receivable - Answer- total assets do not
change.

When the firm pays its utility bill upon receipt of that bill - Answer- assets decrease
and expenses increase.

When the owner withdraws cash for personal use - Answer- assets decrease and
owner's equity decreases.

Assume that, after analyzing its business transaction, a firm has the following ending
balances: accounts payable $3,400, accounts receivable $2,000, cash $1,000,
capital $3,600, equipment $3,000, prepaid rent $600, and supplies $400. What is the
total amount of assets that will be reported on the firm's balance sheet? - Answer-
$7,000

Assume that a firm has the following information in its analysis of its business
transactions during its first year of business: fees income of $7,000, an investment

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