Auditors will need to perform more substantive tests than normal to obtain sufficient appropriate evidence that a financial instrument is fairly stated if which of the following conditions exist?

Auditors will need to perform more substantive tests than normal to obtain sufficient appropriate evidence that a financial instrument is fairly stated...

Which of the following procedures would be most important in the audit of an investment valued at fair value?

Which of the following procedures would be most important in the audit of an investment valued at fair value?  A. Compare the balance in the...

Which of the following would provide the best form of evidential matter pertaining to the annual valuation of a long-term investment in which the entity owns a 45 percent voting interest?

Which of the following would provide the best form of evidential matter pertaining to the annual valuation of a long-term investment in which the entity...

When an auditor is unable to inspect and count an entity's investment securities until after the balance sheet date, the bank where the securities are held in a safe-deposit box should be notified on or before the balance sheet date that it will be asked to

When an auditor is unable to inspect and count an entity's investment securities until after the balance sheet date, the bank where the securities are...

When there is a large number of negotiable securities in multiple locations, careful planning of the physical inspection and count of the securities by the auditor is necessary to guard against

When there is a large number of negotiable securities in multiple locations, careful planning of the physical inspection and count of the securities...

Which of the following controls would a company most likely use to safeguard marketable securities when an independent trust agent is not employed?

Which of the following controls would a company most likely use to safeguard marketable securities when an independent trust agent is not employed?  A....

Which of the following control activities would an entity most likely use to assist in satisfying the completeness assertion related to long-term investments?

Which of the following control activities would an entity most likely use to assist in satisfying the completeness assertion related to long-term investments?  A....

The primary purpose of sending a standard confirmation request to financial institutions with which the entity has done business during the year is to

The primary purpose of sending a standard confirmation request to financial institutions with which the entity has done business during the year is...

As one of the year-end audit procedures, the auditor instructed the entity's personnel to prepare a standard bank confirmation request for a bank account that had been closed during the year. After the entity's treasurer had signed the request, it was mailed to the bank by the assistant treasurer. What is the major flaw in this audit procedure?

As one of the year-end audit procedures, the auditor instructed the entity's personnel to prepare a standard bank confirmation request for a bank account...

Under which of the following circumstances would an auditor be most likely to intensify an examination of a $1,000 petty cash fund maintained on an imprest basis?

Under which of the following circumstances would an auditor be most likely to intensify an examination of a $1,000 petty cash fund maintained on an...

Examining brokers' advices for a sample of securities purchased during the year is a test for the assertion of

Examining brokers' advices for a sample of securities purchased during the year is a test for the assertion of  A. Completeness. B. Disclosure. C....

In establishing the existence and ownership of a long-term investment in stock of a publicly traded company, an auditor should inspect the securities or

In establishing the existence and ownership of a long-term investment in stock of a publicly traded company, an auditor should inspect the securities...

An entity has a large and active investment portfolio that is kept in a bank safe-deposit box. If the auditor is unable to examine and count the securities at the balance sheet date but will examine and count the securities shortly thereafter, the auditor most likely will

An entity has a large and active investment portfolio that is kept in a bank safe-deposit box. If the auditor is unable to examine and count the securities...

Jones was engaged to examine the financial statements of Virginia Corporation for the year ended June 30. Having completed an examination of the investment securities, which of the following is the best method of verifying the accuracy of recorded dividend income?

Jones was engaged to examine the financial statements of Virginia Corporation for the year ended June 30. Having completed an examination of the investment...

Which of the following is not one of the auditor's primary objectives in an examination of marketable securities?

Which of the following is not one of the auditor's primary objectives in an examination of marketable securities?  A. To determine whether securities...

The auditor should insist that a representative of the entity be present during the physical examination of securities in order to

The auditor should insist that a representative of the entity be present during the physical examination of securities in order to  A. Lend authority...

In a manufacturing company, which one of the following audit procedures would give the least assurance for the existence of the general ledger balance of investment in stocks and bonds at the audit date?

In a manufacturing company, which one of the following audit procedures would give the least assurance for the existence of the general ledger balance...

When an entity uses a trust company as custodian of its marketable securities, the possibility of concealing fraud most likely would be reduced if the

When an entity uses a trust company as custodian of its marketable securities, the possibility of concealing fraud most likely would be reduced if the  A....

Which one of the following would the auditor consider to be an incompatible operation if the cashier receives remittances from the mailroom?

Which one of the following would the auditor consider to be an incompatible operation if the cashier receives remittances from the mailroom?  A....

Which of the following procedures most likely would give the greatest assurance that securities held as investments are safeguarded?

Which of the following procedures most likely would give the greatest assurance that securities held as investments are safeguarded?  A. There...

Which of the following controls would an entity most likely use in safeguarding against the loss of marketable securities?

Which of the following controls would an entity most likely use in safeguarding against the loss of marketable securities?  A. An independent...

A company holds bearer bonds as a short-term investment. Responsibility for custody of these bonds and submission of coupons for collections of periodic interest probably should be delegated to the

A company holds bearer bonds as a short-term investment. Responsibility for custody of these bonds and submission of coupons for collections of periodic...

A company has additional temporary funds to invest. The Board of Directors decided to purchase marketable securities and assigned the future purchase and sale decisions to a responsible financial executive. The best person(s) to make periodic reviews of the investment activity authorized by that executive should be

A company has additional temporary funds to invest. The Board of Directors decided to purchase marketable securities and assigned the future purchase...

A primary purpose of the proof of cash is to

A primary purpose of the proof of cash is to  A. Prevent fraud. B. Reconcile actual cash receipts and disbursements to budgeted receipts and...

To gather evidence regarding the balance per bank in a bank reconciliation, an auditor would examine all of the following except the:

To gather evidence regarding the balance per bank in a bank reconciliation, an auditor would examine all of the following except the:  A. Cutoff...

An auditor should trace interbank transfers for the last part of the audit period and first part of the subsequent period to detect whether

An auditor should trace interbank transfers for the last part of the audit period and first part of the subsequent period to detect whether  A....

An auditor who is engaged to examine the financial statements of a business enterprise will request a cutoff bank statement primarily to

An auditor who is engaged to examine the financial statements of a business enterprise will request a cutoff bank statement primarily to  A....

The auditor should ordinarily mail confirmation requests to all banks with which the entity has conducted any business during the year, regardless of the year-end balance, since

The auditor should ordinarily mail confirmation requests to all banks with which the entity has conducted any business during the year, regardless of...

The cashier of Brooke Company covered a shortage in the cash working fund with cash obtained on December 31 from a local bank by cashing, but not recording, a check drawn on the company's out-of-town bank. How would the auditor discover this manipulation?

The cashier of Brooke Company covered a shortage in the cash working fund with cash obtained on December 31 from a local bank by cashing, but not recording,...

Examining a sample of cancelled checks for an authorized signature tests which of the following assertions for cash?

Examining a sample of cancelled checks for an authorized signature tests which of the following assertions for cash?  A. Authorization. B. Completeness. C....

Tracing a sample of remittance advices to entries in the cash receipts journal tests which of the following assertions for cash?

Tracing a sample of remittance advices to entries in the cash receipts journal tests which of the following assertions for cash?  A. Occurrence. B....

An auditor ordinarily should send a standard confirmation request to all banks with which the entity has done business during the year under audit, regardless of the year-end balance, because this procedure

An auditor ordinarily should send a standard confirmation request to all banks with which the entity has done business during the year under audit,...

An imprest cash account is

An imprest cash account is  A. Used for investing in marketable securities. B. The principal cash account for an entity. C. One that contains...

All of the following can assist the auditor in testing the existence assertion for investment securities except:

All of the following can assist the auditor in testing the existence assertion for investment securities except:  A. Physical examination. B....

In confirming with an outside agent, such as a financial institution, that the agent is holding investment securities in the entity's name, an auditor most likely gathers evidence in support of management's financial statement assertions regarding

In confirming with an outside agent, such as a financial institution, that the agent is holding investment securities in the entity's name, an auditor...

Which of the following pairs of accounts would an auditor most likely analyze on the same working paper?

Which of the following pairs of accounts would an auditor most likely analyze on the same working paper?  A. Notes receivable and interest income. B....

An auditor usually tests the reasonableness of dividend income from investments in stock of public companies by computing the amounts that should have been received by referring to

An auditor usually tests the reasonableness of dividend income from investments in stock of public companies by computing the amounts that should have...

To satisfy the valuation assertion when auditing an investment accounted for by the equity method, an auditor most likely would

To satisfy the valuation assertion when auditing an investment accounted for by the equity method, an auditor most likely would  A. Inspect the...

An auditor testing long-term investments would ordinarily use substantive analytical procedures as the primary audit evidence to support the reasonableness of the

An auditor testing long-term investments would ordinarily use substantive analytical procedures as the primary audit evidence to support the reasonableness...

Of the following, which is the most efficient audit procedure for verification of interest earned on bond investments?

Of the following, which is the most efficient audit procedure for verification of interest earned on bond investments?  A. Tracing interest declarations...

If fraud is suspected, auditors may complete all of the following procedures except:

If fraud is suspected, auditors may complete all of the following procedures except:  A. Testing for kiting. B. Footing the bank reconciliation...

An interbank transfer schedule

An interbank transfer schedule  A. Is another name for the proof of cash. B. Helps the auditor test for kiting. C. Is on a standard bank confirmation. D....

Which of the following is one of the better auditing techniques that might be used by an auditor to detect kiting between intercompany banks?

Which of the following is one of the better auditing techniques that might be used by an auditor to detect kiting between intercompany banks?  A....

An unrecorded check issued during the last week of the year would most likely be discovered by the auditor when the

An unrecorded check issued during the last week of the year would most likely be discovered by the auditor when the  A. Check register for the...

Which of the following audit procedures is the most appropriate when internal control over cash is weak or when an entity requests an investigation of cash transactions?

Which of the following audit procedures is the most appropriate when internal control over cash is weak or when an entity requests an investigation...

The least crucial element of internal control over cash is

The least crucial element of internal control over cash is  A. Separation of cash record-keeping from custody of cash. B. Preparation of the...

Which of the following internal controls most likely would reduce the risk of diversion of customer receipts by an entity's employees?

Which of the following internal controls most likely would reduce the risk of diversion of customer receipts by an entity's employees?  A. A...

In order to efficiently establish the correctness of the accounts payable cutoff, an auditor will be most likely to

In order to efficiently establish the correctness of the accounts payable cutoff, an auditor will be most likely to  A. Coordinate cutoff tests...

Which of the following is a question that the auditor would expect to find on the production process section of an internal control questionnaire?

Which of the following is a question that the auditor would expect to find on the production process section of an internal control questionnaire?  A....

Which assertion for ending inventory is most likely violated if the gross profit percentage is much greater than last year?

Which assertion for ending inventory is most likely violated if the gross profit percentage is much greater than last year?  A. Existence. B....

An auditor concluded that no excessive costs for an idle plant were charged to inventory. This conclusion most likely related to the auditor's objective to obtain evidence about the financial statement assertions regarding inventory, including presentation and disclosure, and

An auditor concluded that no excessive costs for an idle plant were charged to inventory. This conclusion most likely related to the auditor's objective...

Which of the following is not one of the independent auditor's objectives regarding the examination of inventories?

Which of the following is not one of the independent auditor's objectives regarding the examination of inventories?  A. Verifying that inventory...

When an auditor tests an entity's cost accounting system, the auditor's tests are primarily designed to determine that

When an auditor tests an entity's cost accounting system, the auditor's tests are primarily designed to determine that  A. Quantities on hand...

Observing an entity's inventory held on consignment by others tests the assertion of

Observing an entity's inventory held on consignment by others tests the assertion of  A. Existence. B. Completeness. C. Valuation. D. Rights...

To gain assurance that all inventory items in an entity's inventory listing schedule are valid, an auditor most likely would trace

To gain assurance that all inventory items in an entity's inventory listing schedule are valid, an auditor most likely would trace  A. Inventory...

The element of the audit planning process most likely to be agreed upon with the entity before implementation of the audit strategy is the determination of the

The element of the audit planning process most likely to be agreed upon with the entity before implementation of the audit strategy is the determination...

In an audit of inventories, an auditor would least likely verify that

In an audit of inventories, an auditor would least likely verify that  A. All inventory owned by the entity is on hand at the time of the count. B....

The physical count of inventory of a retailer was higher than shown in its perpetual records. Which of the following could explain the difference?

The physical count of inventory of a retailer was higher than shown in its perpetual records. Which of the following could explain the difference?  A....

Which of the following is the best audit procedure for the discovery of damaged merchandise in an entity's ending inventory?

Which of the following is the best audit procedure for the discovery of damaged merchandise in an entity's ending inventory?  A. Compare the...

When outside firms of non-accountants specializing in physical inventory counts are used to count, list, price, and subsequently compute the total dollar amount of inventory on hand at the date of the physical count, the auditor will ordinarily

When outside firms of non-accountants specializing in physical inventory counts are used to count, list, price, and subsequently compute the total dollar...

Which one of the following procedures would not be appropriate for an auditor in discharging his or her responsibilities concerning the entity's physical inventories?

Which one of the following procedures would not be appropriate for an auditor in discharging his or her responsibilities concerning the entity's physical...

Purchase cutoff activities should be designed to test that merchandise is included in the inventory of the entity company if the company

Purchase cutoff activities should be designed to test that merchandise is included in the inventory of the entity company if the company  A....

The auditor tests the quantity of materials charged to work in process by tracing these quantities to

The auditor tests the quantity of materials charged to work in process by tracing these quantities to  A. Cost ledgers. B. Perpetual inventory...

Tracing costs used to price inventory to vendors' invoices test which of the following assertions?

Tracing costs used to price inventory to vendors' invoices test which of the following assertions?  A. Occurrence. B. Cutoff. C. Accuracy. D....

An inventory turnover analysis is useful to the auditor because it may detect

An inventory turnover analysis is useful to the auditor because it may detect  A. Inadequacies in inventory pricing. B. Methods of avoiding...

Which of the following control activities would most likely be used to maintain accurate perpetual inventory records?

Which of the following control activities would most likely be used to maintain accurate perpetual inventory records?  A. Independent storeroom...

For several years, an entity's physical inventory count has been lower than what was shown on the books at the time of the count so that downward adjustments to the inventory account were required. Contributing to the inventory problem could be weaknesses in internal controls that led to the failure to record some

For several years, an entity's physical inventory count has been lower than what was shown on the books at the time of the count so that downward adjustments...

In obtaining an understanding of a manufacturing entity's internal control concerning inventory balances, an auditor most likely would

In obtaining an understanding of a manufacturing entity's internal control concerning inventory balances, an auditor most likely would  A. Review...

An entity maintains perpetual inventory records in both quantities and dollars. If the assessed level of control risk is high, an auditor would probably

An entity maintains perpetual inventory records in both quantities and dollars. If the assessed level of control risk is high, an auditor would probably  A....

When perpetual inventory records are maintained in quantities and in dollars and internal control over inventory is weak, the auditor would probably

When perpetual inventory records are maintained in quantities and in dollars and internal control over inventory is weak, the auditor would probably  A....

An auditor generally tests physical security controls over inventory by

An auditor generally tests physical security controls over inventory by  A. Test counts and cutoff procedures. B. Examination and reconciliation. C....

Key segregations of duties in the inventory management process include all of the following except separating:

Key segregations of duties in the inventory management process include all of the following except separating:  A. Cost accounting from review...

Which of the following is a plausible explanation for a large increase in the number of days outstanding in inventory?

Which of the following is a plausible explanation for a large increase in the number of days outstanding in inventory?  A. Obsolete inventory. B....

An auditor most likely would make inquiries of production and sales personnel concerning possible obsolete or slow-moving inventory to support management's financial statement assertion of

An auditor most likely would make inquiries of production and sales personnel concerning possible obsolete or slow-moving inventory to support management's...

Which of the following is least likely to be a possible cause of book-to-physical differences in inventory quantities?

Which of the following is least likely to be a possible cause of book-to-physical differences in inventory quantities?  A. Inventory cutoff errors. B....

In a manufacturing company, which one of the following audit procedures would give the least assurance about the valuation of inventory at the audit date?

In a manufacturing company, which one of the following audit procedures would give the least assurance about the valuation of inventory at the audit...

An auditor selected items for test counts while observing an entity's physical inventory. The auditor then traced the test counts to the entity's inventory listing. This procedure most likely provided evidence concerning management's assertion of

An auditor selected items for test counts while observing an entity's physical inventory. The auditor then traced the test counts to the entity's inventory...

If the perpetual inventory records show lower quantities of inventory than the physical count, an explanation of the difference might be unrecorded

If the perpetual inventory records show lower quantities of inventory than the physical count, an explanation of the difference might be unrecorded  A....

An entity's physical count of inventories was higher than the inventory quantities per the perpetual records. This situation could be the result of the failure to record

An entity's physical count of inventories was higher than the inventory quantities per the perpetual records. This situation could be the result of...

An auditor has accounted for a sequence of inventory tags and is now going to trace information on a representative number of tags to the physical inventory sheets. The purpose of this procedure is to obtain assurance that

An auditor has accounted for a sequence of inventory tags and is now going to trace information on a representative number of tags to the physical inventory...

An entity's physical count of inventories was lower than the inventory quantities shown in its perpetual records. This situation could be the result of the failure to record

An entity's physical count of inventories was lower than the inventory quantities shown in its perpetual records. This situation could be the result...

An auditor will usually trace the details of the test counts made during the observation of the physical inventory count to a final inventory schedule. This audit procedure is undertaken to provide evidence that items physically present and observed by the auditor at the time of the physical inventory count are

An auditor will usually trace the details of the test counts made during the observation of the physical inventory count to a final inventory schedule....

Which of the following auditing procedures most likely would provide assurance about a manufacturing entity's inventory valuation?

Which of the following auditing procedures most likely would provide assurance about a manufacturing entity's inventory valuation?  A. Vouching...

For the purpose of determining proper cutoff for inventory, the auditor will select a sample from which of the following for a few days before and after year-end?

For the purpose of determining proper cutoff for inventory, the auditor will select a sample from which of the following for a few days before and after...

The audit of year-end physical inventories should include steps to verify that the entity's purchases and sales cutoffs were adequate. The audit steps should be designed to detect whether merchandise included in the physical count at year-end was not recorded as a

The audit of year-end physical inventories should include steps to verify that the entity's purchases and sales cutoffs were adequate. The audit steps...

Which of the following audit procedures would provide the least reliable evidence that the entity has legal title to inventories?

Which of the following audit procedures would provide the least reliable evidence that the entity has legal title to inventories?  A. Confirmation...

Failure to record inventory in the proper period can affect all of the following accounts except:

Failure to record inventory in the proper period can affect all of the following accounts except:  A. Sales. B. Receivables. C. Cost of Goods...

Which of the following is not a misstatement related to the occurrence assertion for inventory?

Which of the following is not a misstatement related to the occurrence assertion for inventory?  A. Consigned goods are included as part of inventory. B....

The safeguarding of inventory most likely includes

The safeguarding of inventory most likely includes  A. Comparison of the information contained on the purchase requisitions, purchase orders,...

Auditors are most likely to ensure that no production activity is scheduled prior to

Auditors are most likely to ensure that no production activity is scheduled prior to  A. Determining standard costs. B. Observing physical inventory. C....

Which of the following best describes the occurrence assertion for inventory?

Which of the following best describes the occurrence assertion for inventory?  A. Purchase requisitions initiated by authorized personnel. B....

Which of the following departments typically approves purchase requisitions?

Which of the following departments typically approves purchase requisitions?  A. Raw materials stores. B. Cost accounting. C. Inventory management. D....

Shipping orders are forwarded from the revenue process to

Shipping orders are forwarded from the revenue process to  A. The materials requisitions department. B. Finished goods stores. C. Raw materials...

A deferred tax liability is classified on the balance sheet as either a current or a noncurrent liability. The current amount of a deferred tax liability should generally be:

A deferred tax liability is classified on the balance sheet as either a current or a noncurrent liability. The current amount of a deferred tax liability...

When a change in the tax rate is enacted into law, its effect on existing deferred income tax accounts should be:

When a change in the tax rate is enacted into law, its effect on existing deferred income tax accounts should be: A. handled retroactively in accordance...

Which of the following differences would result in future taxable amounts?

Which of the following differences would result in future taxable amounts? A. Expenses or losses that are tax deductible after they are recognized...

Which of the following is a temporary difference classified as a revenue or gain that is taxable after it is recognized in financial income?

Which of the following is a temporary difference classified as a revenue or gain that is taxable after it is recognized in financial income? A. Subscriptions...

Which of the following is a permanent difference that is recognized for tax purposes but not for financial reporting purposes?

Which of the following is a permanent difference that is recognized for tax purposes but not for financial reporting purposes? A. The deduction for...

The use of accelerated depreciation for tax purposes and straight-line depreciation for accounting purposes results in:

The use of accelerated depreciation for tax purposes and straight-line depreciation for accounting purposes results in: A. a larger amount of depreciation...

A major distinction between temporary and permanent differences is:

A major distinction between temporary and permanent differences is: A. permanent differences are not representative of acceptable accounting practice. B....

All of the following are procedures for the computation of deferred income taxes except to

All of the following are procedures for the computation of deferred income taxes except to a. identify the types and amounts of existing temporary...

A deferred tax liability is classified on the balance sheet as either a current or a noncurrent liability. The current amount of a deferred tax liability should generally be

A deferred tax liability is classified on the balance sheet as either a current or a noncurrent liability. The current amount of a deferred tax liability...

Tanner, Inc. incurred a financial and taxable loss for 2015. Tanner therefore decided to use the carryback provisions as it had been profitable up to this year. How should the amounts related to the carryback be reported in the 2015 financial statements?

Tanner, Inc. incurred a financial and taxable loss for 2015. Tanner therefore decided to use the carryback provisions as it had been profitable up to...

Deferred tax amounts that are related to specific assets or liabilities should be classified as current or noncurrent based on

Deferred tax amounts that are related to specific assets or liabilities should be classified as current or noncurrent based on a. their expected reversal...

Deferred taxes should be presented on the balance sheet

Deferred taxes should be presented on the balance sheet a. as one net debit or credit amount. b. in two amounts: one for the net current amount and...

Accounting for income taxes can result in the reporting of deferred taxes as any of the following except

Accounting for income taxes can result in the reporting of deferred taxes as any of the following except a. a current or long-term asset. b. a current...

Major reasons for disclosure of deferred income tax information is (are)

Major reasons for disclosure of deferred income tax information is (are) a. better assessment of quality of earnings. b. better predictions of future...

With regard to uncertain tax positions, the FASB requires that companies recognize a tax benefit when

With regard to uncertain tax positions, the FASB requires that companies recognize a tax benefit when a. it is probable and can be reasonably estimated. b....

Uncertain tax positions I. Are positions for which the tax authorities may disallow a deduction in whole or in part. II. Include instances in which the tax law is clear and in which the company believes an audit is likely. III. Give rise to tax expense by increasing payables or increasing a deferred tax liability.

Uncertain tax positionsI. Are positions for which the tax authorities may disallow a deduction in whole orin part.II. Include instances in which the...

Recognizing a valuation allowance for a deferred tax asset requires that a company

Recognizing a valuation allowance for a deferred tax asset requires that a company a. consider all positive and negative information in determining...

Recognition of tax benefits in the loss year due to a loss carryforward requires

Recognition of tax benefits in the loss year due to a loss carryforward requires a. the establishment of a deferred tax liability. b. the establishment...

Tax rates other than the current tax rate may be used to calculate the deferred income tax amount on the balance sheet ifTax rates other than the current tax rate may be used to calculate the deferred income tax amount on the balance sheet if

Tax rates other than the current tax rate may be used to calculate the deferred income tax amount on the balance sheet if a. it is probable that a...

When a change in the tax rate is enacted into law, its effect on existing deferred income tax accounts should be

When a change in the tax rate is enacted into law, its effect on existing deferred income tax accounts should be a. handled retroactively in accordance...

Which of the following is not considered a permanent difference?

Which of the following is not considered a permanent difference? a. Interest received on municipal bonds. b. Fines resulting from violating the law. c....

Which of the following temporary differences results in a deferred tax asset in the year the temporary difference originates?

Which of the following temporary differences results in a deferred tax asset in the year the temporary difference originates? I. Accrual for product...

A company records an unrealized loss on short-term securities. This would result in what type of difference and in what type of deferred income tax?

A company records an unrealized loss on short-term securities. This would result in what type of difference and in what type of deferred income tax? Type...

A company uses the equity method to account for an investment for financial reporting purposes. This would result in what type of difference and in what type of deferred income tax?

A company uses the equity method to account for an investment for financial reporting purposes. This would result in what type of difference and in...

Which of the following will not result in a temporary difference?

Which of the following will not result in a temporary difference? a. Product warranty liabilities b. Advance rental receipts c. Installment sales d....

An example of a permanent difference is

An example of a permanent difference is a. proceeds from life insurance on officers. b. interest expense on money borrowed to invest in municipal...

Stuart Corporation's taxable income differed from its accounting income computed for this past year. An item that would create a permanent difference in accounting and taxable incomes for Stuart would be

Stuart Corporation's taxable income differed from its accounting income computed for this past year. An item that would create a permanent difference...

Which of the following differences would result in future taxable amounts?

Which of the following differences would result in future taxable amounts? a. Expenses or losses that are tax deductible after they are recognized...

Which of the following is a temporary difference classified as a revenue or gain that is taxable after it is recognized in financial income?

Which of the following is a temporary difference classified as a revenue or gain that is taxable after it is recognized in financial income? a. Subscriptions...

Which of the following are temporary differences that are normally classified as expenses or losses that are deductible after they are recognized in financial income?

Which of the following are temporary differences that are normally classified as expenses or losses that are deductible after they are recognized in...

A major distinction between temporary and permanent differences is

A major distinction between temporary and permanent differences is a. permanent differences are not representative of acceptable accounting practice. b....

Assuming a 40% statutory tax rate applies to all years involved, which of the following situations will give rise to reporting a deferred tax liability on the balance sheet?

Assuming a 40% statutory tax rate applies to all years involved, which of the following situations will give rise to reporting a deferred tax liability...

At the December 31, 2014 balance sheet date, Unruh Corporation reports an accrued receivable for financial reporting purposes but not for tax purposes. When this asset is recovered in 2015, a future taxable amount will occur and

At the December 31, 2014 balance sheet date, Unruh Corporation reports an accrued receivable for financial reporting purposes but not for tax purposes....

A temporary difference arises when a revenue item is reported for tax purposes in a period

A temporary difference arises when a revenue item is reported for tax purposes in a period After it is reported Before it is reported in financial...

Machinery was acquired at the beginning of the year. Depreciation recorded during the life of the machinery could result in

Machinery was acquired at the beginning of the year. Depreciation recorded during the life of the machinery could result in Future Future Taxable...

The deferred tax expense is the

The deferred tax expense is the a. increase in balance of deferred tax asset minus the increase in balance of deferred tax liability. b. increase...

Taxable income of a corporation differs from pretax financial income because of

Taxable income of a corporation differs from pretax financial income because of Permanent Temporary Differences Differences a. No No b. No Yes c....

Taxable income of a corporation

Taxable income of a corporation a. differs from accounting income due to differences in intraperiod allocation between the two methods of income determination. b....

Which of the following describes a permanent difference?

Which of the following describes a permanent difference?  A. A difference that will be corrected in an amended tax return. B. A difference arising...

Which of the following describes a temporary difference?

Which of the following describes a temporary difference?  A. A difference that will be corrected in an amended tax return. B. A difference arising...

If payables turnover has increased significantly since the prior year, this is an indication that which of the following assertions for accounts payable might be violated?

If payables turnover has increased significantly since the prior year, this is an indication that which of the following assertions for accounts payable...

Which of the following questions would most likely be included in an internal control questionnaire concerning the completeness assertion for purchases?

Which of the following questions would most likely be included in an internal control questionnaire concerning the completeness assertion for purchases?  A....

Which of the following test(s) of details of transactions can be used as a dual-purpose test in conjunction with tests of controls?

Which of the following test(s) of details of transactions can be used as a dual-purpose test in conjunction with tests of controls?  A. Test...

Assertions about account balances at the period end include

Assertions about account balances at the period end include A. Existence, completeness, and accuracy. B. Existence, completeness, and classification. C....

Assertions about classes of transactions and events for the period under audit include

Assertions about classes of transactions and events for the period under audit include  A. Existence, completeness, and accuracy. B. Existence,...

The mailing of disbursement checks and remittance advices should be controlled by the employee who

The mailing of disbursement checks and remittance advices should be controlled by the employee who  A. Signed the checks last. B. Approved the...

Which of the following is an internal control that would prevent a paid disbursement voucher from being presented for payment a second time?

Which of the following is an internal control that would prevent a paid disbursement voucher from being presented for payment a second time?  A....

Which of the following control activities is not usually performed in the accounts payable department?

Which of the following control activities is not usually performed in the accounts payable department?  A. Determining the mathematical accuracy...

Budd, the purchasing agent for Lake Hardware Wholesalers, has a relative who owns a retail hardware store. Budd arranged for hardware to be delivered by manufacturers to the retail store on a C.O.D. basis, thereby enabling his relative to buy at Lake's wholesale prices. Budd was probably able to accomplish this because of Lake's poor internal control over

Budd, the purchasing agent for Lake Hardware Wholesalers, has a relative who owns a retail hardware store. Budd arranged for hardware to be delivered...

In auditing accounts payable, an auditor's procedures most likely would focus primarily on management's assertion of

In auditing accounts payable, an auditor's procedures most likely would focus primarily on management's assertion of  A. Existence. B. Rights...

If completeness is a concern for accounts payable, auditors will send accounts payable confirmations to

If completeness is a concern for accounts payable, auditors will send accounts payable confirmations to  A. Primarily vendors with large accounts...

Accounts payable confirmations are used to test

Accounts payable confirmations are used to test  A. Both the existence and completeness audit assertions. B. Only the existence audit assertion. C....

An examination of the balance in the accounts payable account is ordinarily not designed to

An examination of the balance in the accounts payable account is ordinarily not designed to  A. Determine that the amounts represent obligations...

Which of the following procedures would an auditor least likely perform before the balance sheet date?

Which of the following procedures would an auditor least likely perform before the balance sheet date?  A. Assessment of inherent risk. B. Observation...

Which of the following procedures would an auditor most likely perform in searching for unrecorded liabilities?

Which of the following procedures would an auditor most likely perform in searching for unrecorded liabilities?  A. Trace a sample of accounts...

Which of the following is a substantive procedure that an auditor most likely would perform to verify the existence of recorded accounts payable?

Which of the following is a substantive procedure that an auditor most likely would perform to verify the existence of recorded accounts payable?  A....