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Accounting Questions Pertaining to the CPA

A. Which of the following is not a purpose of the Sarbanes-Oxley Act?
1. Regulate the auditors of public companies
2. Ensure the adherence of relevant laws and regulations
3. Enhance corporate reporting and disclosure
4. Clarify sound corporate governance
I would said that the answer here is 3 - corporate reporting and disclosure

B. In most jurisdictions, a corporation's principal officers are
1. Appointed by the board of directors
2. Appointed by the chief executive officer
3. Appointed by the company stakeholders
4. Elected by the company shareholders
I would said that the answer is 2 - chief executive officers

C.A database has three record types: 1) for supplier, a type that contains a unique supplier number, a supplier name, and a supplier address; 2) for parts, a type that contains a unique part number, a part name, a description, and a location; and 3) for purchases, a type that contains a unique supplier number referencing the supplier number in the supplier record, a part number referencing the part number in the part record, and a quantity. This database has a
1. Relational structure.
2. Network structure.
3. Hierarchical structure.
4. Single flat file structure.
The answer is 4 - hierarchical structure

D. Hardware controls usually are those built into the equipment by the manufacturer. One such control, an echo check, is best described as
1. A component that signals the control unit that an operation has been performed.
2. Two units that provide read-after-write and dual-read capabilities.
3. Double wiring of the CPU and peripheral equipment to prevent malfunctioning.
4. A device that prevents more than one peripheral unit from communicating with the CPU at the same time.
I would said the answer is 1

E. One of the measures economists and economic policy makers use to gauge a nation ' s economic growth is to calculate the change in the
1. Real per capita output.
2. Total wages.
3. General price level.
4. Money supply.
The answer is 1

F. The costs of the use of a resource for the production of one good rather than another are
1. Economic costs
2. Fixed costs
3. Historical costs
4. Opportunity costs
I would said the answer is D

G. Carlton Bank has an increase in reserves of $1,000,000. If the reserve ratio is 10%, by what amount may Carlton increase its demand deposits?
1.. $ 100,000
2. $ 900,000
3. $ 1,000,000
4. $ 10,000,000
Answer 4

Solution Preview

A. Which of the following is not a purpose of the Sarbanes-Oxley Act?
1. Regulate the auditors of public companies
2. Ensure the adherence of relevant laws and regulations
3. Enhance corporate reporting and disclosure
4. Clarify sound corporate governance
I would said that the answer here is 3 - corporate reporting and disclosure -- This is not correct. SOX was not designed to verify that companies are adhering to laws and regulations. That would be a primary objective of GAAP and provisions set forth by the FASB. SOX is designed to monitor corporate governance, auditor activity, and internal controls. It was never designed as a watchdog for accounting regulations.

B. In most jurisdictions, a corporation's principal officers are
1. Appointed by the board of directors
2. Appointed by the chief executive officer
3. Appointed by the company stakeholders
4. Elected by the company shareholders
I would said that the answer is 2 ...

Solution Summary

This solution provides the correct answers with explanations to the CPA exam practice questions listed. Includes 3 references.

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