Question

10.An unethical act:

A.Is always illegal as well

B.Is not necessarily illegal

C.Must, at minimum, violate a government regulation

D.Is determined for the accounting profession by the FASB

11.You are an Accountant for a growing tech company and ready for IPO. During year end you are responsible for accruing revenues to prepare the financial statement. Accrual entries are subjective as it’s an estimate of what is anticipated to be received. CEO or company is counting on you to do the “right thing” so to meet analysts’ expectations. If you applied utilitarian method to make your decision which one of the following most closely applies ?

A.Accrue revenue. While it’s technically not proper GAAP accounting, it will benefit the shareholders and CEO.

B.None of the above

C.Accrue revenue because it’s the right thing to do.

D.Don’t accrue revenue because it won’t benefit anyone

12.The AICPA’s Code of Professional Conduct establishes:

A.The rules for resolving technical judgments in achieving a fair presentation of financial statements.

B.The normative rules of ethical behavior that guide professional accountants.

C.The rules of conduct for conducting audits, but no other forms of attestation.

D.The rules of conduct for structuring and conducting audits and other attestation engagements.

Answer 1

10)

The correct option is B.Is not necessarily illegal

The act which is morally wrong called Unethical act. This may be against morality but not against in law.

Unethical act not always illegal.

Why other options are not correct:

A. Is always illegal as well --- Not correct since unethical act may be wrong but not always against in law.

C.Must, at minimum, violate a government regulation - Not correct since unethical act may be wrong but may be not violate a goverment regulation

D.Is determined for the accounting profession by the FASB -- Not correct

11)

The correct option is B. None of the above

An accountant should be aware about the revenue recognition standard. Revenue is recognied when goods or services are transferred or rendered and the are expected to be realized and earned.

12)

The correct option is B.The normative rules of ethical behavior that guide professional accountants.

AICPA code establishes standards of professional conduct. They issues standard for independence, integrity and responsibilities for auditors and accounting professionals.