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Upwork Accounting Principles Test Answers - Part 2

1. Which of the following is a method of timing business transactions or choosing accounting principles so that the firm reports smaller variations in income from year to year than it would otherwise?
 Answers: • Income Smoothing

 2. What is the accounting objective which best relates to the percentage of completion method?
 Answers: • Accurate Presentation

 3. What entry would a donor make when giving a cash donation to a charity, where the donor retains the right to revoke the contribution?
 Answers: • Dr: Cash, Cr: Refundable Advance to Charity

 4. Companies of what size have been impacted the most by the SOX from a cost perspective?
 Answers: • The smaller companies as the cost of implementing the provisions of the Act does not decrease proportionally with the size of the company

 5. What is the acronym for the agency authorized by the U.S. Congress to regulate, among other things, the financial reporting practices of most public corporations?
 Answers: • SEC

 6. What is the accounting objective which best relates to the MACRS method?
 Answers: • Tax Minimization

 7. What is the phrase with no agreement on meaning which implies to most analysts that earnings quality increase with the likelihood of recurrence?
 Answers: • Quality of earnings

 8. What entry would a donor make when giving a cash donation to a charity?
 Answers: • Dr: Revenue, Cr: Cash

 9. What is the accounting objective which best relates to the double declining balance method?
 Answers: • Conservatism

 10. What is the effect of the SOX on public companies?
 Answers: • It has made regulations more strict


 11. Which of the following accounts may appear on a company's balance sheet when the incomes for financial and tax reporting are different?
 Answers: • Deferred income tax liability

 12. What is the accounting objective which best relates to the Lower of Cost or Market Price method?
 Answers: • Conservatism

 13. Which of the following is a method of accounting for the exploration costs of a mineral resource that would best attain the objective of income tax accounting?
 Answers: • Expense in total when incurred

 14. What is the accounting objective which best relates to the straight line method?
 Answers: • Conservatism

 15. How is an unconditional promise to give a donation to a charity accounted for by the charity?
 Answers: • As revenue only when the donation is made

 16. What is the acronym for the independent board responsible, since 1973, for establishing generally accepted accounting principles?
 Answers: • FASB

 17. What is form 8-K?
 Answers: • As needed filing to disclose any significant issues or changes

 18. What is the acronym for an independent board responsible, since 1973, for establishing generally accepted accounting principles?
 Answers: • FASB

 19. Who can review the filings made by public companies with the SEC?
 Answers: • Anyone using the EDGAR system

 20. What change was made in regarding the penalization of the whistleblowers (people who alert the authorities about the illegal activities in a corporation) by the companies?
 Answers: • They are now protected against retaliation by the company in order to encourage employees to bring the wrong doings of the companies to light

 21. Which of the following courses of action should a firm take in order to minimize the present value of income tax payments?
 Answers: • Use the LIFO inventory method instead of FIFO durating periods of rising prices

 22. What kind of organization issuing securities would NOT have to register them with the SEC?
 Answers: • The government

 23. What factors affect the balance sheet, given the articulation of the income statement with the balance sheet and the factors that imply high or low quality of earnings?
 Answers: • Quality of Financial Position

 24. What is the phrase which, though there is no agreement on its meaning, implies to most analysts that the quality of earnings improves with the likelihood of recurrence?
 Answers: • Quality of Earnings

 25. What is the accounting objective which best relates to the disclosing of the cost of employee stock options (not expensing)?
 Answers: • Conservatism

 26. What is the purpose of a Registration Statement?
 Answers: • To provide information to the public about a company before it is traded publicly

 27. Which of the following is true of the Sarbanes Oxley Act?
 Answers: • It has bolstered investor confidence

 28. For which of the following accounts would the use of 'the lower of cost or market price' principle be acceptable?
 Answers: • Inventory

 29. Which of the following is a valid criticism of the SOX?
 Answers: • It has made regulations more strict

 30. Which of the following must generally be used for financial reporting if it is used for income tax reporting?
 Answers: • FIFO

 31. What is the reporting objective that calls for the anticipation of all losses incurred but defers the recognition of gains or profits until they are realized in arm's length transactions?
 Answers: • Conservatism

 32. Which of the following is used by the FASB in the selection of acceptable accounting principles?
 Answers: • Conceptual Framework

 33. What value should a contribution be accounted for at?
 Answers: • Historical value

 34. What is the qualitative accounting objective suggesting that information reported in a financial statement should correspond as precisely as possible to the economic effects underlying transactions and events?
 Answers: • Accurate Presentation

 35. What is the accounting objective which best relates to the expensing of R&D costs?
 Answers: • Income Smoothing

 36. What is Form 10-K?
 Answers: • Annual financial reports filed with the SEC

 37. Which FASB sets the requirements for accounting for Non-Profit organizations?
 Answers: • FASB SFAS 117

 38. What two filings are required when a company wishes to list its stock?
 Answers: • Forms 10K and 10Q

 39. In which year was the Sarbanes Oxley Act passed?
 Answers: • 2002

 40. What is the accounting objective which best relates to the capitalization of prepaid advertising costs?
 Answers: • Profit Maximization

 41. Which doctrine lays down that a firm should account for a given set of operations so as to make reported net income as large as possible?
 Answers: • Profit maximization

 42. For which of the following would the use of the straight-line method of amortization be acceptable?
 Answers: • Building

 43. What are the 3 types of Health Care Organizations for accounting purposes?
 Answers: • Investor-owned, Non-Profit, Governmental

 44. What is the accounting objective which best relates to the weighted average inventory method?
 Answers: • Income Smoothing

 45. Which of the following methods is normally considered to be acceptable for financial reporting?
 Answers: • MACRS

 46. What change was made to the internal controls of the companies by the SOX?
 Answers: • All company processes and related internal controls now need to be documented and then tested by an outside auditing firm

 47. What is the acronym for an organization that promotes the international harmonization of accounting standards?
 Answers: • IASC

 48. How are third party adjustments to patient bills reflected in the financial statements?
 Answers: • As a deduction from revenue

 49. What is the database created by the SEC for companies to file electronically?
 Answers: • EDGAR

 50. What was the purpose of the Sarbanes Oxley act, in general?
 Answers: • To better regulate public and private companies in the wake of recent accounting scandals

 51. What are forms 10K and 10Q referred to as?
 Answers: • Periodic Filings

 52. What is the acronym for the agency authorized by the U.S. Congress to regulate the financial reporting practices of most public corporations?
 Answers: • SEC

 53. Which of the following methods would be employed to help accomplish the following objective: smoothing a firm's income as a means of minimizing large fluctuations in the price of its stock.
 Answers: • Weighted average inventory

 54. What is the doctrine that the firm should account for a given set of operations so as to make reported net income as large as possible known as?
 Answers: • Profit Maximization

 55. Which of the financial accounting objectives listed below would seem to be closest to the objective of tax reporting?
 Answers: • Accuracy

 56. What is 'paying the least amount of taxes as late as possible within the law to minimize the present value of tax payments for a given set of operations' a description of?
 Answers: • Least and Latest Rule

 57. What is the accounting objective which best relates to the completed contract method?
 Answers: • Income Smoothing

 58. What is the accounting objective which best relates to the LIFO method?
 Answers: • Income Smoothing

 59. How should a firm compensating its employees by granting them the option to purchase its shares report it?
 Answers: • Neither a nor b

 60. What is the accounting objective which best relates to the percentage of sales method for uncollectible accounts?
 Answers: • Conservatism

 61. What is the acronym for the organization that promotes international harmonization of accounting standards?
 Answers: • IASB

 62. What is the accounting objective which best relates to the FIFO method?
 Answers: • Income Smoothing

 63. What change was made by the Act regarding the authority competent to sign the company tax returns?
 Answers: • Only the CEO now has the authority to sign the company tax returns

 64. What new board was created as part of the Sarbanes Oxley Act?
 Answers: • PCAOB – Public Company Accounting Oversight Board

 65. In which years were the Securities & Exchange Acts created?
 Answers: • 1933 and1934

 66. What is form 10-Q?
 Answers: • Quarterly financial reports filed with the SEC

 67. How is a donated asset accounted by a non-profit organization based on its fair market value?
 Answers: • Dr: Asstes, Cr: Revenue

 68. What statements are required of a Non-Profit organization?
 Answers: • statement of financial position, statement of cash flows, and statement of activity and changes in net assets

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