A100 Accounting Practice Final Exam Questions
and Correct Answers
Internal controls are procedures or systems which are designed to do all of the
following except: - CORRECT ANSWER -Ensure profitability
Which of the following correctly describes "internal controls" ? - CORRECT
ANSWER -Systems and procedures which improve efficiency within the company
help protect the company's assets
Sarbanes-Oxley requires which of the following of auditors: - CORRECT ANSWER -
A review of audit workpapers by a second partner
Under Sarbanes-Oxley, the audit committee: - CORRECT ANSWER -determines
who will be the external auditors and receives their finished report
The Sarbanes-Oxley Act was passed: - CORRECT ANSWER -Right after the Enron
Scandal
What is an example of an assurance service provided by public accounting firms? -
CORRECT ANSWER -An audit of internal controls
Which of the following types of business is always owned by one person and has
not been incorporated? - CORRECT ANSWER -Proprietorship
Which of the following statements is true?
, A. As production increases, variable cost per unit stays the same
B. Contribution margin per unit increases as total production increases
C. Total fixed costs decreases as total production decreases
D. Fixed costs per unit decreases as total production decreases
E. Total variable costs and total fixed costs both increase exactly with increases in
production - CORRECT ANSWER -A. As production increases, variable cost per unit
stays the same
What is true regarding product (inventoriable) costs and period costs? - CORRECT
ANSWER -Property taxes on the factory is a product cost
Which of the following is true of unearned revenue? - CORRECT ANSWER -When it
is earned, both assets and liabilities are increased
What is correct on the statement of cash flows? - CORRECT ANSWER -Payment of
interest is an operating cash outflow
Payment of principal is a financing cash outflow
Purchase of inventory on account does not go on this statement at the time of
purchase
Receipt of unearned revenue is an operating cash inflow
Which of the following is classified as a period cost? - CORRECT ANSWER -Sales
Commission
and Correct Answers
Internal controls are procedures or systems which are designed to do all of the
following except: - CORRECT ANSWER -Ensure profitability
Which of the following correctly describes "internal controls" ? - CORRECT
ANSWER -Systems and procedures which improve efficiency within the company
help protect the company's assets
Sarbanes-Oxley requires which of the following of auditors: - CORRECT ANSWER -
A review of audit workpapers by a second partner
Under Sarbanes-Oxley, the audit committee: - CORRECT ANSWER -determines
who will be the external auditors and receives their finished report
The Sarbanes-Oxley Act was passed: - CORRECT ANSWER -Right after the Enron
Scandal
What is an example of an assurance service provided by public accounting firms? -
CORRECT ANSWER -An audit of internal controls
Which of the following types of business is always owned by one person and has
not been incorporated? - CORRECT ANSWER -Proprietorship
Which of the following statements is true?
, A. As production increases, variable cost per unit stays the same
B. Contribution margin per unit increases as total production increases
C. Total fixed costs decreases as total production decreases
D. Fixed costs per unit decreases as total production decreases
E. Total variable costs and total fixed costs both increase exactly with increases in
production - CORRECT ANSWER -A. As production increases, variable cost per unit
stays the same
What is true regarding product (inventoriable) costs and period costs? - CORRECT
ANSWER -Property taxes on the factory is a product cost
Which of the following is true of unearned revenue? - CORRECT ANSWER -When it
is earned, both assets and liabilities are increased
What is correct on the statement of cash flows? - CORRECT ANSWER -Payment of
interest is an operating cash outflow
Payment of principal is a financing cash outflow
Purchase of inventory on account does not go on this statement at the time of
purchase
Receipt of unearned revenue is an operating cash inflow
Which of the following is classified as a period cost? - CORRECT ANSWER -Sales
Commission
