King, CPA, was engaged to audit the financial statements of Newton Company after its fiscal year had ended. King neither observed the inventory count nor confirmed the receivables by direct communication with debtors, but was satisfied concerning both after applying alternative procedures.King’s auditor’s report most likely contained a(n)
(B)Disclaimer of opinion.
(D)Unmodified opinion with an other-matter paragraph.
According to COSO, which of the following components addresses the need to respond in an organized manner to significant changes resulting from international exposure, acquisitions, or executive transitions?
(A)Control activities (B)Risk assessment (C)Monitoring activities (D)Information and communication
Correct Answer: B
If Jenny's Bakery purchased an insurance policy, assuming the accrual accounting method is still being used, when would the company report the cost of the policy as an expense?
(A)When Jenny signs the policy (B)When payment is made (C)When the bakery receives the benefits of the policy (D)When the bakery receives payments from the insurance company (E)When the invoice is received
Correct Answer: C
Which of the following is subtracted from net sales to determine gross profit?
(A)Mark one answer: (B)Cost of goods sold (C)Expenses (D)Both cost of goods sold and expenses (E)Cost of goods sold, expenses, and taxes (F)Taxes
Correct Answer: A
More CPA Exam Questions
- 1In the current year, Fitz, a single taxpayer, sustained a $48,000 loss on Code Sec. 1244 stock in JJJ Corp., a qualifying small business corporation, and a $20,000 loss on Code Sec. 1244 stock in MMM Corp., another qualifying small business corporation. What is the maximum amount of loss that Fitz can deduct for the current year?
- 2What is the difference between a balance sheet and a trial balance? Mark one answer:
- 3King, CPA, was engaged to audit the financial statements of Newton Company after its fiscal year had ended. King neither observed the inventory count nor confirmed the receivables by direct communication with debtors, but was satisfied concerning both after applying alternative procedures.King’s auditor’s report most likely contained a(n)
- 4On July 1, Year 5, Eagle Corp. issued 600 of its 10%, $1,000 bonds at 99 plus accrued interest. The bonds are dated April 1, Year 5 and mature on April 1, Year 15. Interest is payable semiannually on April 1 and October 1. What amount did Eagle receive from the bond issuance?
- 5A government internal audit function is presumed to be free from organizational independence impairments for reporting internally when the head of the organization