Sophia Accounting Fundamentals UNIT 1 — CHALLENGE 1: Overview of Accounting
Accounting Origins and Ethics
Identify ethical principles related to
... [Show More] accounting.
1. Which of the following statements is true regarding the regulation of ethics in accounting?
a. The Sarbanes-Oxley Act determines the standards of financial reporting for state and local government.
b. Unethical behavior by major companies prompted the government to create the Sarbanes-Oxley Act.
c. The private sector proposed the Sarbanes-Oxley Act as a way to regulate competition within industries.
d. The IRS created the Sarbanes-Oxley Act in order to prosecute companies who did not pay taxes.
2. Which of the following was created by the government in response to unethical behavior by companies such as Enron and WorldCom?
a. The Sarbanes-Oxley Act
b. Generally Accepted Accounting Principles
c. The Financial Accounting Standards Board
d. International Financial Reporting Standards
3. Which of the following statements is true regarding the purpose of the Sarbanes Oxley-Act?
a. The Sarbanes-Oxley Act standardizes accounting practices across all nations.
b. The Sarbanes-Oxley Act regulates financial reporting to prevent fraud or misconduct.
c. The Sarbanes-Oxley Act requires financial statements to be relevant, reliable and comparable.
d. The Sarbanes-Oxley Act develops and enforces securities laws.
Accounting Governance
Differentiate between governing principles, bodies, and agencies involved in regulating accounting practices.
4. Financial reporting standards for state and local government are determined by the governing body known as __________, while international standards are compiled in the governing principles known as __________.
a. SEC; GAAP
b. AICPA; IRS
c. GASB; IFRS
d. FASB; GAO
5. The __________ is the governing body which investigates and reports on the use of public funds while the __________ is the governing body responsible for collecting taxes.
a. IFRS; FASB
b. AICPA; GAAP
c. GAO; IRS
d. SEC; GASB
6. The governing body __________ is responsible for developing the US governing principles known as __________.
a. FASB; GAAP
b. GASB; AICPA
c. SEC; GAO
d. IRS; IFRS
Accounting in Practice
Identify the major roles and responsibilities in the field of accounting.
7. Janice works part-time and her sole responsibility is to document all of the accounting events that take place. Janice's role is that of a(n) __________.
a. auditor
b. controller
c. bookkeeper
d. accountant
8. Frank and Laura dedicated $250,000 to one of their clients, hoping to receive returns in addition to that $250,000. Frank and Laura's role is that of a(n) __________.
a. investor
b. auditor
c. controller
d. shareholder
9. Fred is responsible for completing an objective analysis of the accounting processes and financial information for a company. Fred's role is that of a(n) __________.
a. accountant
b. auditor
c. controller
d. bookkeeper
Accounting Businesses and Organizations
Determine the basic structure and tax forms of legal entities.
10. Which of the following scenarios correctly describes a non-profit organization?
a. Sally [Show Less]