BUS-A 302 Accounting Research (1 cr.)
BUS-A 302 - ACCOUNTING RESEARCH | EXAM QUESTIONS AND
CORRECT ANSWERS | VERIFIED ACCOUNTING RESEARCH LATEST
VERSION
BUS-A 302 Accounting Research (1 cr.)
1. Which of the following best describes the primary purpose of applied
accounting research in professional practice?
A. Designing the internal chart of accounts for a new business
B. Developing new theories of market efficiency for academic
publication
C. Estimating the future stock price of a client entity
D. Locating and applying authoritative guidance to resolve a specific
reporting issue
ANSWER : D. Locating and applying authoritative guidance to
resolve a specific reporting issue
Practitioner research is aimed at finding the authoritative ANSWER to a
concrete financial reporting question and applying it to the facts.
Page 1 of 61
, BUS-A 302 Accounting Research (1 cr.)
2. A staff accountant is asked how to account for a transaction that the
firm has never encountered before. What should be the first step in
the research process?
A. Identify and clearly define the accounting issue
B. Draft the conclusion for the engagement partner
C. Search the Codification using broad keywords
D. Contact the FASB technical inquiry service
ANSWER : A. Identify and clearly define the accounting issue
Research begins by pinning down the precise issue; without a well-
framed question, searches produce irrelevant results.
3. Which step of the research process involves gathering details such as
contract terms, dates, and the parties involved?
A. Evaluating alternative accounting treatments
B. Collecting and analyzing the relevant facts
C. Communicating the results
D. Searching nonauthoritative literature
ANSWER : B. Collecting and analyzing the relevant facts
The facts of the transaction must be gathered early because the correct
guidance depends on the specific circumstances.
4. When a researcher reformulates a broad question into narrower,
more specific questions, this is primarily done to
A. eliminate the need for professional judgment
B. avoid documenting the research
C. satisfy SEC filing requirements
D. make the search of authoritative literature more focused and
efficient
ANSWER : D. make the search of authoritative literature more
focused and efficient
Refining the issue narrows the search and helps target the exact topic and
subtopic of guidance.
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, BUS-A 302 Accounting Research (1 cr.)
5. Which of the following is typically the final step in a structured
accounting research process?
A. Gathering the facts of the case
B. Identifying the issue
C. Communicating the conclusion, usually in a research memorandum
D. Searching the authoritative literature
ANSWER : C. Communicating the conclusion, usually in a research
memorandum
Research ends with documenting and communicating the conclusion and
its supporting authority.
6. Which statement about professional judgment in accounting research
is most accurate?
A. It is required when guidance is principles-based or when facts do
not fit neatly into existing rules
B. It replaces the need to cite authoritative sources
C. It may be used only by the engagement partner
D. It is unnecessary once the Codification has been searched
ANSWER : A. It is required when guidance is principles-based or
when facts do not fit neatly into existing rules
Principles-based standards and unusual facts require the researcher to
apply reasoned judgment supported by authority.
7. A researcher finds two acceptable accounting alternatives for the
same transaction. The researcher should next
A. select the alternative that produces the highest net income
B. report both alternatives without reaching a conclusion
C. evaluate each alternative against the facts and authoritative criteria
before concluding
D. choose the alternative listed first in the Codification
ANSWER : C. evaluate each alternative against the facts and
authoritative criteria before concluding
Evaluating alternatives against authoritative criteria and the facts is the
core analytical step before a conclusion.
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, BUS-A 302 Accounting Research (1 cr.)
8. Which of the following is an example of a 'theoretical' rather than
'applied' accounting research question?
A. How should a lessee classify a five-year equipment lease?
B. What disclosures are required for a loss contingency?
C. Where in the Codification is inventory measurement addressed?
D. Do earnings surprises affect stock returns across industries?
ANSWER : D. Do earnings surprises affect stock returns across
industries?
Theoretical research examines broad relationships, typically using
empirical methods, rather than resolving a specific reporting problem.
9. Why is it important to document the research process, not just the
conclusion?
A. It is required only for tax engagements
B. It shows the basis for the conclusion and supports it if later
questioned by reviewers or regulators
C. It allows the firm to avoid using professional judgment
D. It replaces the need for a client representation letter
ANSWER : B. It shows the basis for the conclusion and supports it if
later questioned by reviewers or regulators
Documentation creates an evidence trail that supports the reasonableness
of the conclusion under later scrutiny.
10. Which of the following is the most appropriate way to handle a
research question that involves both financial reporting and tax
consequences?
A. Apply GAAP to the tax return
B. Apply the tax treatment to the financial statements
C. Rely solely on the client's prior-year treatment
D. Research each issue in its own body of authoritative literature
ANSWER : D. Research each issue in its own body of authoritative
literature
GAAP and tax law are separate bodies of authority, and each issue must
be researched in the correct source.
Page 4 of 61
BUS-A 302 - ACCOUNTING RESEARCH | EXAM QUESTIONS AND
CORRECT ANSWERS | VERIFIED ACCOUNTING RESEARCH LATEST
VERSION
BUS-A 302 Accounting Research (1 cr.)
1. Which of the following best describes the primary purpose of applied
accounting research in professional practice?
A. Designing the internal chart of accounts for a new business
B. Developing new theories of market efficiency for academic
publication
C. Estimating the future stock price of a client entity
D. Locating and applying authoritative guidance to resolve a specific
reporting issue
ANSWER : D. Locating and applying authoritative guidance to
resolve a specific reporting issue
Practitioner research is aimed at finding the authoritative ANSWER to a
concrete financial reporting question and applying it to the facts.
Page 1 of 61
, BUS-A 302 Accounting Research (1 cr.)
2. A staff accountant is asked how to account for a transaction that the
firm has never encountered before. What should be the first step in
the research process?
A. Identify and clearly define the accounting issue
B. Draft the conclusion for the engagement partner
C. Search the Codification using broad keywords
D. Contact the FASB technical inquiry service
ANSWER : A. Identify and clearly define the accounting issue
Research begins by pinning down the precise issue; without a well-
framed question, searches produce irrelevant results.
3. Which step of the research process involves gathering details such as
contract terms, dates, and the parties involved?
A. Evaluating alternative accounting treatments
B. Collecting and analyzing the relevant facts
C. Communicating the results
D. Searching nonauthoritative literature
ANSWER : B. Collecting and analyzing the relevant facts
The facts of the transaction must be gathered early because the correct
guidance depends on the specific circumstances.
4. When a researcher reformulates a broad question into narrower,
more specific questions, this is primarily done to
A. eliminate the need for professional judgment
B. avoid documenting the research
C. satisfy SEC filing requirements
D. make the search of authoritative literature more focused and
efficient
ANSWER : D. make the search of authoritative literature more
focused and efficient
Refining the issue narrows the search and helps target the exact topic and
subtopic of guidance.
Page 2 of 61
, BUS-A 302 Accounting Research (1 cr.)
5. Which of the following is typically the final step in a structured
accounting research process?
A. Gathering the facts of the case
B. Identifying the issue
C. Communicating the conclusion, usually in a research memorandum
D. Searching the authoritative literature
ANSWER : C. Communicating the conclusion, usually in a research
memorandum
Research ends with documenting and communicating the conclusion and
its supporting authority.
6. Which statement about professional judgment in accounting research
is most accurate?
A. It is required when guidance is principles-based or when facts do
not fit neatly into existing rules
B. It replaces the need to cite authoritative sources
C. It may be used only by the engagement partner
D. It is unnecessary once the Codification has been searched
ANSWER : A. It is required when guidance is principles-based or
when facts do not fit neatly into existing rules
Principles-based standards and unusual facts require the researcher to
apply reasoned judgment supported by authority.
7. A researcher finds two acceptable accounting alternatives for the
same transaction. The researcher should next
A. select the alternative that produces the highest net income
B. report both alternatives without reaching a conclusion
C. evaluate each alternative against the facts and authoritative criteria
before concluding
D. choose the alternative listed first in the Codification
ANSWER : C. evaluate each alternative against the facts and
authoritative criteria before concluding
Evaluating alternatives against authoritative criteria and the facts is the
core analytical step before a conclusion.
Page 3 of 61
, BUS-A 302 Accounting Research (1 cr.)
8. Which of the following is an example of a 'theoretical' rather than
'applied' accounting research question?
A. How should a lessee classify a five-year equipment lease?
B. What disclosures are required for a loss contingency?
C. Where in the Codification is inventory measurement addressed?
D. Do earnings surprises affect stock returns across industries?
ANSWER : D. Do earnings surprises affect stock returns across
industries?
Theoretical research examines broad relationships, typically using
empirical methods, rather than resolving a specific reporting problem.
9. Why is it important to document the research process, not just the
conclusion?
A. It is required only for tax engagements
B. It shows the basis for the conclusion and supports it if later
questioned by reviewers or regulators
C. It allows the firm to avoid using professional judgment
D. It replaces the need for a client representation letter
ANSWER : B. It shows the basis for the conclusion and supports it if
later questioned by reviewers or regulators
Documentation creates an evidence trail that supports the reasonableness
of the conclusion under later scrutiny.
10. Which of the following is the most appropriate way to handle a
research question that involves both financial reporting and tax
consequences?
A. Apply GAAP to the tax return
B. Apply the tax treatment to the financial statements
C. Rely solely on the client's prior-year treatment
D. Research each issue in its own body of authoritative literature
ANSWER : D. Research each issue in its own body of authoritative
literature
GAAP and tax law are separate bodies of authority, and each issue must
be researched in the correct source.
Page 4 of 61
