Question

7.             Which of the following is a difference between stress and rapport?

            A) Stress negatively impacts the ability to listen, whereas rapport negatively impacts the ability to think clearly.

            B) Stress inhibits effective communication, whereas rapport allows the interview to evolve without hostility.

            C) Stress increases the quality of witness remembrance, whereas rapport inhibits effective communication.

            D) Stress is a positive factor in the communication process, whereas rapport is a negative factor.

8.             ________ is the use of deception by one party to obtain information from another party who would not otherwise disclose such information is often considered inappropriate and may even be illegal.

            A) Pretext      

            B) Guise

            C) Blind

            D) Ruse

9.             Which of the following is a difference between audits and compilations?

            A) The auditor's objective is to obtain reasonable assurance that the financial statements are free of material misstatements, whereas the objective of a compilation is to assist management in presenting financial information without obtaining any level of assurance.

            B) Audits do not require an understanding of the entity's internal controls and an assessment of fraud risk, whereas compilations require an understanding of the entity's internal controls and an assessment of fraud risk.

            C) Audits have a narrower scope as compared to reviews, whereas compilations have a broader scope as compared to reviews.

            D) Audits provide a reasonable level of assurance to the users of the financial statements, whereas compilations provide a limited level of assurance to the users of the financial statements.

10.          Which of the following accountants use a conservative reporting strategy?

            A) Imogene reported a higher inventory than actual.

            B) Malik understated the expense incurred during the year.

            C) Lia capitalized the general maintenance expenses.

            D) Yuriko used a higher depreciation rate for the assets.

11.          Judith Corp. has current assets worth $50,000 and current liabilities worth $75,000.             Current assets include inventory of $10,000. Calculate acid test ratio.

            A) 1.500

            B) 0.533

            C) 0.625

            D) 0.667

12.          Which of the following is a difference between personal financial statements and business financial statements?

            A) Personal financial statements follow the cost principle, whereas business financial statements do not follow the cost principle.

            B) Personal financial statements should present assets at estimated current values, whereas business financial statements should present assets at historical cost.

            C) Personal financial statements are not governed by GAAP, whereas business financial statements are governed by GAAP.

            D) Personal financial statements are prepared for a specific period of time, whereas business financial statements are prepared for a general period.

Answer 1

SOLUTION IS -

7. A - Stress negatively impacts the ability to listen, whereas rapport negatively impacts the ability to think clearly.

8. D - Ruse

9. D - Audits provide a reasonable level of assurance to the users of the financial statements, whereas compilations provide a limited level of assurance to the users of the financial statements.

10. A - Imogene reported a higher inventory than actual.

11. B - 0.533

12. C - Personal financial statements are not governed by GAAP, whereas business financial statements are governed by GAAP.