Upwork Test Answer Accounting Principles Skill Test

Question: 01
What was the purpose of the Sarbanes Oxley act, in general?
a. To allow for caps on management salaries
b. To allow for price setting on the stock market
c. To regulate employee pension funds
d. To better regulate public and private companies in the wake of recent accounting scandals
Answer: d. To better regulate public and private companies in the wake of recent accounting scandals


Question: 02
How are third party adjustments to patient bills reflected in the financial statements?
a. As an addition to revenue
b. As a deduction from revenue
c. As a liability
d. As an asset
Answer: b. As a deduction from revenue


Question: 03
What is Form 10-K?
a. Monthly filing with the SEC reporting salaries to the directors
b. As needed filing to disclose any significant issues or changes
c. Quarterly financial reports filed with the SEC
d. Annual financial reports filed with the SEC
Answer: d. Annual financial reports filed with the SEC


Question: 04
What is the accounting objective which best relates to the FIFO method?
a. Tax Minimization
b. Income Smoothing
c. Profit Maximization
d. Accurate Reporting
Answer: b. Income Smoothing


Question: 05
What is the accounting objective which best relates to the percentage of completion method?
a. Conservatism
b. Accurate Presentation
c. Tax Minimization
d. Income Smoothing
Answer: b. Accurate Presentation


Question: 06
Companies of what size have been impacted the most by the SOX from a cost perspective?
a. Mid-sized companies feel the impact the most
b. There is no correlation between company size and the cost of implementing the provisions of the Act
c. The larger companies as the larger the company, the more it has to pay to implement the provisions of the Act
d. The smaller companies as the cost of implementing the provisions of the Act does not decrease proportionally with the size of the company
Answer: c. The larger companies as the larger the company, the more it has to pay to implement the provisions of the Act


Question: 07
What is the acronym for an organization that promotes the international harmonization of accounting standards?
a. SEC
b. IASC
c. FASB
d. None of the above
Answer: b. IASC


Question: 08
Which FASB sets the requirements for accounting for Non-Profit organizations?
a. FASB SFAS 999
b. FASB SFAS 100
c. FASB SFAS 99
d. FASB SFAS 117
Answer: d. FASB SFAS 117


Question: 09
What is form 10-Q?
a. Monthly filing with the SEC reporting director salaries
b. As needed filing to disclose any significant issues or changes
c. Quarterly financial reports filed with the SEC
d. Annual financial reports filed with the SEC
Answer: c. Quarterly financial reports filed with the SEC


Question: 10
Which of the following is not an example of the accounting practices followed by a firm having wide flexibility in the choice of alternative methods for financial reporting?
a. Accounting for depreciation
b. Accounting for investment in common stocks
c. Accounting for inventories
d. None of the above
Answer: d. None of the above


Question: 11
What is the accounting objective which best relates to the straight line method?
a. Profit Maximization
b. Conservatism
c. Tax Minimization
d. None of the above
Answer: b. Conservatism


Question: 12
Which of the following accounts may appear on a company's balance sheet when the incomes for financial and tax reporting are different?
a. Income tax expenses
b. Deferred income tax liability
c. Sales tax expenses
d. All of the above
Answer: b. Deferred income tax liability


Question: 13
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?
a. Least and latest rule
b. Profit maximization
c. Income smoothing
d. None of the above
Answer: b. Profit maximization


Question: 14
What is the accounting objective which best relates to the Lower of Cost or Market Price method?
a. Accurate Presentation
b. Tax Minimization
c. Profit Maximization
d. Conservatism
Answer: d. Conservatism


Question: 15
In which years were the Securities & Exchange Acts created?
a. 1980 and 1981
b. 1933 and1934
c. 1920 and 1930
d. 1802 and 1920
Answer: b. 1933 and1934


Question: 16
What is the accounting objective which best relates to the expensing of R&D costs?
a. Income Smoothing
b. Accurate Reporting
c. Conservatism
d. Profit Maximization
Answer: a. Income Smoothing


Question: 17
What is the accounting objective which best relates to the weighted average inventory method?
a. Tax Minimization
b. Income Smoothing
c. Profit Maximization
d. None of the above
Answer: b. Income Smoothing


Question: 18
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?
a. Conceptual Framework
b. Quality of Financial Position
c. Accurate Presentation
d. Least and Latest Rule
Answer: c. Accurate Presentation


Question: 19
How is an unconditional promise to give a donation to a charity accounted for by the charity?
a. Not recorded at all until 100% contribution is received
b. Never recorded even after receipt
c. As revenue only when the donation is made
d. As revenue when the promise is made
Answer: c. As revenue only when the donation is made


Question: 20
What is the accounting objective which best relates to the completed contract method?
a. Income Smoothing
b. Profit Maximization
c. Tax Minimization
d. None of the above
Answer: a. Income Smoothing


Question: 21
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?
a. They are now themselves subject to fraud charges for uncovering the crimes
b. They are put under witness protection
c. They are offered a transfer to a new department
d. They are now protected against retaliation by the company in order to encourage employees to bring the wrong doings of the companies to light
Answer: d. They are now protected against retaliation by the company in order to encourage employees to bring the wrong doings of the companies to light


Question: 22
What is the acronym for the agency authorized by the U.S. Congress to regulate the financial reporting practices of most public corporations?
a. SEC
b. IASC
c. FASB
d. None of the above
Answer: a. SEC


Question: 23
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?
a. Profit Maximization
b. Least and Latest Rule
c. Conservatism
d. Income Smoothing
Answer: b. Least and Latest Rule


Question: 24
Which of the following methods is normally considered to be acceptable for financial reporting?
a. MACRS
b. Lower of cost or market price for inventories
c. Direct write off of uncollectible accounts
d. Capitalization of R&D Costs
Answer: a. MACRS


Question: 25
Which of the following is a valid criticism of the SOX?
a. It has made regulations more strict
b. It has made foreign companies reluctant to register on US stock exchanges due to the burden of SOX reporting
c. It allows for looser corporate standards
d. It makes a few people accountable for the misdeeds of a corporation
Answer: b. It has made foreign companies reluctant to register on US stock exchanges due to the burden of SOX reporting


Question: 26
What is the effect of the SOX on public companies?
a. It has made regulations more strict
b. It has added accountability to the upper management
c. It has forced companies to look at their internal controls
d. All of the above
Answer: a. It has made regulations more strict


Question: 27
Which of the following is true of the Sarbanes Oxley Act?
a. It has bolstered investor confidence
b. It has increased all stock prices
c. It has increased the number of foreign corporations registering in the US
d. It has created more work for corporate accounting departments
Answer: a. It has bolstered investor confidence


Question: 28
What change was made to the internal controls of the companies by the SOX?
a. All company processes and related internal controls now need to be documented and then tested by an outside auditing firm
b. Companies no longer have to document their internal controls since the auditors do the job
c. Internal controls can be more lax than before
d. Companies have to provide for internal controls only to satisfy the auditors
Answer: c. Internal controls can be more lax than before


Question: 29
What are the 3 types of Health Care Organizations for accounting purposes?
a. Incorporated, Limited Liability, Sole Proprietor
b. Asset based, Liability based, Expense based
c. Investor-owned, Non-Profit, Governmental
d. Private, Public, LLC
Answer: c. Investor-owned, Non-Profit, Governmental


Question: 30
What is the acronym for an independent board responsible, since 1973, for establishing generally accepted accounting principles?
a. SEC
b. IASC
c. FASB
d. None of the above
Answer: c. FASB


Question: 31
Who can review the filings made by public companies with the SEC?
a. Only company executives
b. Anyone using the EDGAR system
c. Only law enforcement officials
d. Only the staff of the SEC and the company executives
Answer: b. Anyone using the EDGAR system


Question: 32
What are forms 10K and 10Q referred to as?
a. Periodic Filings
b. Financial Statements
c. Information Returns
d. Tax Returns
Answer: a. Periodic Filings


Question: 33
What is the purpose of a Registration Statement?
a. To offer securities to the public
b. To disclose the operations during the first year
c. To provide information to the public about a company before it is traded publicly
d. Financial records for the company from inception to date
Answer: c. To provide information to the public about a company before it is traded publicly


Question: 34
What value should a contribution be accounted for at?
a. Historical value
b. Fair value
c. Market value
d. Value determined by auditors
Answer: d. Value determined by auditors


Question: 35
When is revenue normally recognized for financial reporting?
a. At the point of sale
b. While cash is being collected
c. After all cash has been collected
d. At the end of each year
Answer: c. After all cash has been collected


Question: 36
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.
    a. Weighted average inventory
    b. Percentage of completion method for long term construction contracts
    c. Straight line amortization of patents
    d. All of the above
Answer: a. Weighted average inventory


Question: 37
For which of the following would the use of the straight-line method of amortization be acceptable?
a. Building
b. Patent
c. Goodwill
d. All of the above
Answer: d. All of the above


Question: 38
What is the accounting objective which best relates to the disclosing of the cost of employee stock options (not expensing)?
a. Conservatism
b. Profit Maximization
c. Income Smoothing
d. Tax Minimization
Answer: a. Conservatism


Question: 39
What change was made by the Act regarding the authority competent to sign the company tax returns?
a. Only the CEO now has the authority to sign the company tax returns
b. Any employee can now sign a tax return
c. Only the firm's CPA can sign the tax returns
d. Only the person who has prepared the return can sign it
Answer: ----


Question: 40
What is form 8-K?
a. Monthly filing with the SEC reporting director salaries
b. As needed filing to disclose any significant issues or changes
c. Quarterly financial reports filed with the SEC
d. Annual financial reports filed with the SEC
Answer: b. As needed filing to disclose any significant issues or changes


Question: 41
For which of the following accounts would the use of 'the lower of cost or market price' principle be acceptable?
a. Inventory
b. Land
c. Prepaid rent
d. All of the above
Answer: a. Inventory


Question: 42
What is the acronym for the independent board responsible, since 1973, for establishing generally accepted accounting principles?
a. GAAP
b. IASC
c. SEC
d. FASB
Answer: ....


Question: 43
What entry would a donor make when giving a cash donation to a charity?
a. Dr: Revenue, Cr: Cash
b. Dr: Expense – Cash, Cr: Cash
c. Dr: Liability, Cr: Cash
d. Dr: Expense – Contributions, Cr: Cash
Answer: a. Dr: Revenue, Cr: Cash


Question: 44
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?
a. Expense in total when incurred
b. Capitalize only the costs related to mineral deposits
c. Capitalize all costs associated with productive as well as non-productive mineral deposits
d. None of the above
Answer: a. Expense in total when incurred


Question: 45
What is the accounting objective which best relates to the double declining balance method?
a. Conservatism
b. Income Smoothing
c. Profit Maximization
d. Tax Minimization
Answer: a. Conservatism


Question: 46
Which of the following must generally be used for financial reporting if it is used for income tax reporting?
a. FIFO
b. LIFO
c. NIFO
d. Installment sales method
Answer: a. FIFO


Question: 47
How are services donated by a CPA accounted for by a non-profit organization?
a. Dr: Expenses, Cr: Revenue
b. Dr: Revenue, Cr: Liability
c. Dr: Expenses, Cr: Assets
d. Dr: Revenue, Cr: Expenses
Answer: b. Dr: Revenue, Cr: Liability

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