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| 1 | |
The notes to the financial statements contained in the annual report include descriptions of all of the following, except: |
| | A) | Accounting changes. |
| | B) | Employee productivity statistics. |
| | C) | Events subsequent to the balance sheet date. |
| | D) | Contingencies and commitments. |
| | E) | Segment information. |
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| 2 | |
Required segment information disclosures do not include data concerning: |
| | A) | major customers that account for more than 10% of the company's total sales. |
| | B) | sales made to subsidiaries by each segment. |
| | C) | identifiable assets of each segment. |
| | D) | operating profits of each segment. |
| | E) | capital expenditures of each segment. |
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| 3 | |
"Significant Accounting Policy" disclosures normally provide detailed information in relation to all of the following, except: |
| | A) | income taxes. |
| | B) | employee benefits. |
| | C) | stock option plans. |
| | D) | depreciation methods. |
| | E) | sales returns and allowances. |
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| 4 | |
Which of these disclosures is unaudited? |
| | A) | Segment information. |
| | B) | Significant accounting policies. |
| | C) | Contingencies and commitments. |
| | D) | Five-year summary of financial data. |
| | E) | Events subsequent to the balance sheet date. |
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| 5 | |
The nature and content of the disclosures in the notes to the financial statements relate to all of the following, except: |
| | A) | accounting changes. |
| | B) | segment information. |
| | C) | management's plans for the future. |
| | D) | contingencies and commitments. |
| | E) | events subsequent to the balance sheet date. |
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| 6 | |
Which of the following is not a topic that is likely to be discussed as a significant accounting policy in the notes to the financial statements? |
| | A) | Depreciation method. |
| | B) | Earnings per share of common stock calculation details. |
| | C) | Inventory valuation method. |
| | D) | Method of estimating uncollectible accounts receivable. |
| | E) | Method of consolidation of subsidiaries. |
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| 7 | |
The impact of changing price levels on amounts reported in financial statements is: |
| | A) | reported as a separate item on the balance sheet. |
| | B) | reported as a separate item on the income statement. |
| | C) | accomplished by reporting assets at their replacement cost. |
| | D) | required to be described in the notes to the financial statements. |
| | E) | encouraged, but not required to be described in the notes to the financial statements. |
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| 8 | |
Management's statement of responsibility: |
| | A) | explains that the company's financial statements are the responsibility of the company's auditors. |
| | B) | states that the financial statements present fairly, in all material respects, the company's financial position, results of operations, and cash flows for the period. |
| | C) | affirms that management is responsible for assuring adherence to internal control policies and procedures. |
| | D) | guarantees that the company has operated in a highly ethical manner. |
| | E) | is a required non-quantitative financial statement for companies that have issued publicly-traded securities. |
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| 9 | |
Which of the following is the proper paragraph sequence for the independent auditors' report? |
| | A) | Scope, introduction, opinion. |
| | B) | Introduction, scope, opinion. |
| | C) | Opinion, scope, summary. |
| | D) | Introduction, opinion, scope. |
| | E) | Introduction, summary, opinion. |
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| 10 | |
Which of the following are examples of situations that may cause financial reporting misstatements? |
| | A) | Recording revenues when future services remain to be provided. |
| | B) | Recording cash received in a lending transaction as revenue. |
| | C) | Creating income by reclassification of balance sheet accounts. |
| | D) | Reducing liabilities by changing accounting assumptions. |
| | E) | All of the above are examples of situations that may cause financial reporting misstatements. |
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