kensho/FFDomainKnowledge · Datasets at Hugging Face

subject stringclasses 16 values	question stringlengths 14 1.04k	A stringlengths 3 116	B stringlengths 8 125	C stringlengths 8 145	D stringlengths 8 144 ⌀	answer stringclasses 4 values	task stringclasses 1 value
business_ethics	Prior to commencing the compilation of financial statements of a nonissuer, an accountant is required to	Verify that the financial information supplied by the entity agrees with the books of original entry.	Perform preliminary analytical procedures to identify accounts that may represent specific risks relevant to the engagement.	Make inquiries of management concerning the entity's procedures used in adjusting and closing the books of account.	Obtain an understanding of any specialized financial reporting frameworks and practices used in the entity's industry.	D	finknow
business_ethics	Which of these is true of equity but not of bonds?	They can be issued by firms.	Their payouts (i.e. dividend or coupons) are made after corporation tax has already been deducted.	Their payouts (i.e. dividends or coupons) are made before corporation tax has been deducted.	They can be traded on the secondary market.	B	finknow
business_ethics	Subsequent to issuing a report on audited financial statements, a CPA discovers that the accounts receivable confirmation process omitted a number of accounts that are material, in the aggregate. Which of the following actions should the CPA take immediately?	Bring the matter to the attention of the board of directors or audit committee.	Withdraw the auditor’s report from those persons currently relying on it.	Perform alternative procedures to verify account balances.	Discuss the potential financial statement adjustments with client management.	C	finknow
business_ethics	An auditor is evaluating a client’s internal controls. Which of the following situations would be the most difficult internal control issue for an auditor to detect?	The accounting staff neglects the control, due to increased transactions to be processed.	The technology department writes a program that does not properly implement the control, due to a lack of understanding.	Two employees, who work in different departments, are circumventing an internal control.	Someone erroneously disables edit checks in a software program designed to identify control exceptions.	C	finknow
business_ethics	When comparing investment projects:	The ranking of projects by NPV is invariant to changes in the market rate	The IRR will always agree with NPV metric	The IRR never changes the ranking of the projects	We should use a single metric, like the NPV or the IRR, to have a coherent comparison	C	finknow
business_ethics	According to rules issued under the Sarbanes-Oxley Act which of the following nonaudit services is an accounting firm permitted to provide for an issuer audit client without impairing the accounting firm's independence?	Providing an expert opinion in order to advocate the client's interest in litigation.	Providing an expert opinion in order to advocate the client's position in a regulatory investigation.	Providing factual accounts in testimony explaining positions taken during the performance of any services provided to the client.	Providing legal services to the client in a foreign jurisdiction.	C	finknow
business_ethics	Which of the following procedures should a user auditor include in the audit plan to create that most efficient audit when an audit client uses a service organization for several processes?	Review that service auditor’s report on controls placed in operations.	Review the service auditor’s report and outline the accounting system in a memo to the working papers	Audit the service organization’s controls, assess risk, and prepare the audit plan.	Audit the service organization’s controls to test the work of the service auditor.	A	finknow
business_ethics	An auditor is using statistical sampling in testing whether cash disbursements were properly authorized. The sample results indicate that the sample rate of deviation plus the allowance for sampling risk exceeds the tolerable rate. Under these circumstances the auditor most likely would reduce the	Planned reliance on the prescribed control.	Assessed level of control risk.	Planned reliance on substantive tests.	Tolerable rate of deviations.	A	finknow
business_ethics	Which of the following statements is the most significant characteristic in determining the classification of an enterprise fund?	The predominant customer is the primary government.	The pricing policies of the activity establish fees and charges designed to recover its cost.	The activity is financed by debt that is secured partially by a pledge of the net revenues from fees and charges of the activity.	Laws or regulations require that the activity’s costs of providing services including capital costs be recovered with taxes or similar revenues.	B	finknow
business_ethics	Which of the following procedures would an auditor most likely perform to obtain evidence about the occurrence of subsequent events?	Verify inventory pledged under loan agreements by confirming the details with financial institutions.	Inquire about the current status of transactions that were recorded on the basis of preliminary data.	Compare the financial statements being reported on with those of the prior year.	Trace information from shipping documents to sales invoices and sales journal transactions.	B	finknow
business_ethics	In planning an audit, the auditor's knowledge about the design of relevant internal control activities should be used to	Identify the types of potential misstatements that could occur.	Assess the operational efficiency of internal control.	Determine whether controls have been circumvented by collusion.	Document the assessed level of control risk.	A	finknow
business_ethics	Which of the following characteristics most likely would heighten an auditor's concern about the risk of material misstatements arising from fraudulent financial reporting?	Management displays a significant disregard for regulatory authorities.	There is a lack of turnover of employees in the accounting department.	Monthly bank reconciliations usually include several deposits in transit.	Equipment is usually sold at a loss before being fully depreciated.	A	finknow
business_ethics	Which of the following should a practitioner perform as part of an engagement for agreed-upon procedures in accordance with Statements on Standards for Attestation Engagements?	Issue a report on findings based on specified procedures performed.	Assess whether the procedures meet the needs of the parties.	Express negative assurance on findings of work performed.	Report the differences between agreed-upon and audit procedures.	A	finknow
business_ethics	Which of the following types of information would be included in total net assets in the statement of financial position for a nongovernmental not-for-profit organization?	Total current net assets and total other assets.	Total current assets and restricted assets.	Unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.	Unrestricted net assets, restricted net assets, and total current assets.	C	finknow
business_ethics	In the financial statements of employee benefit pension plans and trusts, the plan investments are reported at	Fair value.	Historical cost.	Net realizable value.	Lower of historical cost or market.	A	finknow
business_ethics	Which of the following items is not subject to the application of intraperiod income tax allocation?	Discontinued operations	Income from continuing operations.	Extraordinary gains and losses	Operating income.	D	finknow
business_ethics	In which of the following situations would there be inelastic demand?	A 5% price increase results in a 3% decrease in the quantity demanded.	A 4% price increase results in a 6% decrease in the quantity demanded.	A 4% price increase results in a 4% decrease in the quantity demanded.	A 3% price decrease results in a 5% increase in the quantity demanded.	A	finknow
business_ethics	An externality	causes the equilibrium price to be artificially high	causes the equilibrium price to be artificially low	exists when markets cannot reach equilibrium	results in an equilibrium that does not maximize the total benefit to society	D	finknow
business_ethics	What is one reason why the government discourages collusion between large firms in the same industry?	Collusive output levels tend to increase, driving the price above competitive levels.	Consumer surplus falls as the price is driven downward.	Collusive output levels tend to decrease, driving the price down to competitive levels.	Joint profit maximization costs society consumer surplus as the price rises above competitive levels.	D	finknow
business_ethics	The apple market is in equilibrium. Suppose we observe that apple growers are using more pesticides to increase apple production. At the same time, we hear that the price of pears, a substitute for apples, is rising. Which of the following is a reasonable prediction for the new price and quantity of apples?	Price rises, but quantity is ambiguous.	Price falls, but quantity is ambiguous.	Price is ambiguous, but quantity rises.	Price is ambiguous, but quantity falls.	C	finknow
business_ethics	Which of the following is most likely to result in a shift to the right in the demand curve for orange juice?	A bumper crop of oranges in Florida	A decrease in the price of Tang	Expectations of lower future prices for orange juice	Expectations of higher future income among juice drinkers	D	finknow
business_ethics	Which of the following is characteristic of oligopoly? I. Formidable barriers to entry. II. Price (P) = Marginal Revenue (MR). III. Relatively few sellers.	I only.	II only.	III only.	I and III only.	D	finknow
business_ethics	If the price of a product decreases with the price of a substitute product remaining constant such that the consumer buys more of this product, this is called the	income effect.	substitution effect.	marginal effect.	supply effect.	B	finknow
business_ethics	A small business estimates price elasticity of demand for the product to be 3. To raise total revenue, owners should	decrease price as demand is elastic.	decrease price as demand is inelastic.	increase price as demand is elastic.	increase price as demand is inelastic.	A	finknow
business_ethics	The Law of Diminishing Marginal Returns is responsible for	AVC that first rises, but eventually falls, as output increases.	AFC that first rises, but eventually falls, as output increases.	MP that first falls, but eventually rises, as output increases.	MC that first falls, but eventually rises, as output increases.	D	finknow
business_ethics	Diminishing marginal returns to short-run production begin when	the average product of labor begins to fall.	the total product of labor begins to fall.	marginal product of labor becomes negative.	marginal product of labor begins to fall.	D	finknow
business_ethics	Firms maximize their profits by producing a level of output at which	MC = AFC.	MC = MR.	P = ATC.	MR= AVC.	B	finknow
business_ethics	In the short run, a firm employs labor and capital to produce gadgets. If the annual price of capital increases, what will happen to the short-run cost curves?	The marginal cost and average variable cost curves will shift upward.	The average fixed cost and average total cost curves will shift upward.	The marginal cost and average fixed cost curves will shift upward.	The marginal cost, average fixed cost, average variable cost, and average total cost curves will all shift upward.	B	finknow
business_ethics	Which of the following was not a landmark antitrust act?	The Wagner Act	The Sherman Act	The Clayton Act	The Robinson-Patman Act	A	finknow
business_ethics	Which of the following is an example of a long-run adjustment for the owners of a small café?	The owners switch from whole wheat to sourdough bread.	The owners hire several part-time workers to cover the dinner shifts.	The owners work overtime on a busy weekend.	The owners buy the office next door, and this doubles the customer seating.	D	finknow
business_ethics	A competitive firm's demand for labor is determined directly by	profits	the opportunity cost of workers’ time	the wage and the average (physical) product of labor	the marginal (physical) product of labor and the output price	D	finknow

business_ethics

Prior to commencing the compilation of financial statements of a nonissuer, an accountant is required to

Verify that the financial information supplied by the entity agrees with the books of original entry.

Perform preliminary analytical procedures to identify accounts that may represent specific risks relevant to the engagement.

Make inquiries of management concerning the entity's procedures used in adjusting and closing the books of account.

Obtain an understanding of any specialized financial reporting frameworks and practices used in the entity's industry.

D

finknow

business_ethics

Which of these is true of equity but not of bonds?

They can be issued by firms.

Their payouts (i.e. dividend or coupons) are made after corporation tax has already been deducted.

Their payouts (i.e. dividends or coupons) are made before corporation tax has been deducted.

They can be traded on the secondary market.

B

finknow

business_ethics

Subsequent to issuing a report on audited financial statements, a CPA discovers that the accounts receivable confirmation process omitted a number of accounts that are material, in the aggregate. Which of the following actions should the CPA take immediately?

Bring the matter to the attention of the board of directors or audit committee.

Withdraw the auditor’s report from those persons currently relying on it.

Perform alternative procedures to verify account balances.

Discuss the potential financial statement adjustments with client management.

C

finknow

business_ethics

An auditor is evaluating a client’s internal controls. Which of the following situations would be the most difficult internal control issue for an auditor to detect?

The accounting staff neglects the control, due to increased transactions to be processed.

The technology department writes a program that does not properly implement the control, due to a lack of understanding.

Two employees, who work in different departments, are circumventing an internal control.

Someone erroneously disables edit checks in a software program designed to identify control exceptions.

C

finknow

business_ethics

When comparing investment projects:

The ranking of projects by NPV is invariant to changes in the market rate

The IRR will always agree with NPV metric

The IRR never changes the ranking of the projects

We should use a single metric, like the NPV or the IRR, to have a coherent comparison

C

finknow

business_ethics

According to rules issued under the Sarbanes-Oxley Act which of the following nonaudit services is an accounting firm permitted to provide for an issuer audit client without impairing the accounting firm's independence?

Providing an expert opinion in order to advocate the client's interest in litigation.

Providing an expert opinion in order to advocate the client's position in a regulatory investigation.

Providing factual accounts in testimony explaining positions taken during the performance of any services provided to the client.

Providing legal services to the client in a foreign jurisdiction.

C

finknow

business_ethics

Which of the following procedures should a user auditor include in the audit plan to create that most efficient audit when an audit client uses a service organization for several processes?

Review that service auditor’s report on controls placed in operations.

Review the service auditor’s report and outline the accounting system in a memo to the working papers

Audit the service organization’s controls, assess risk, and prepare the audit plan.

Audit the service organization’s controls to test the work of the service auditor.

A

finknow

business_ethics

An auditor is using statistical sampling in testing whether cash disbursements were properly authorized. The sample results indicate that the sample rate of deviation plus the allowance for sampling risk exceeds the tolerable rate. Under these circumstances the auditor most likely would reduce the

Planned reliance on the prescribed control.

Assessed level of control risk.

Planned reliance on substantive tests.

Tolerable rate of deviations.

A

finknow

business_ethics

Which of the following statements is the most significant characteristic in determining the classification of an enterprise fund?

The predominant customer is the primary government.

The pricing policies of the activity establish fees and charges designed to recover its cost.

The activity is financed by debt that is secured partially by a pledge of the net revenues from fees and charges of the activity.

Laws or regulations require that the activity’s costs of providing services including capital costs be recovered with taxes or similar revenues.

B

finknow

business_ethics

Which of the following procedures would an auditor most likely perform to obtain evidence about the occurrence of subsequent events?

Verify inventory pledged under loan agreements by confirming the details with financial institutions.

Inquire about the current status of transactions that were recorded on the basis of preliminary data.

Compare the financial statements being reported on with those of the prior year.

Trace information from shipping documents to sales invoices and sales journal transactions.

B

finknow

business_ethics

In planning an audit, the auditor's knowledge about the design of relevant internal control activities should be used to

Identify the types of potential misstatements that could occur.

Assess the operational efficiency of internal control.

Determine whether controls have been circumvented by collusion.

Document the assessed level of control risk.

A

finknow

business_ethics

Which of the following characteristics most likely would heighten an auditor's concern about the risk of material misstatements arising from fraudulent financial reporting?

Management displays a significant disregard for regulatory authorities.

There is a lack of turnover of employees in the accounting department.

Monthly bank reconciliations usually include several deposits in transit.

Equipment is usually sold at a loss before being fully depreciated.

A

finknow

business_ethics

Which of the following should a practitioner perform as part of an engagement for agreed-upon procedures in accordance with Statements on Standards for Attestation Engagements?

Issue a report on findings based on specified procedures performed.

Assess whether the procedures meet the needs of the parties.

Express negative assurance on findings of work performed.

Report the differences between agreed-upon and audit procedures.

A

finknow

business_ethics

Which of the following types of information would be included in total net assets in the statement of financial position for a nongovernmental not-for-profit organization?

Total current net assets and total other assets.

Total current assets and restricted assets.

Unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.

Unrestricted net assets, restricted net assets, and total current assets.

C

finknow

business_ethics

In the financial statements of employee benefit pension plans and trusts, the plan investments are reported at

Fair value.

Historical cost.

Net realizable value.

Lower of historical cost or market.

A

finknow

business_ethics

Which of the following items is not subject to the application of intraperiod income tax allocation?

Discontinued operations

Income from continuing operations.

Extraordinary gains and losses

Operating income.

D

finknow

business_ethics

In which of the following situations would there be inelastic demand?

A 5% price increase results in a 3% decrease in the quantity demanded.

A 4% price increase results in a 6% decrease in the quantity demanded.

A 4% price increase results in a 4% decrease in the quantity demanded.

A 3% price decrease results in a 5% increase in the quantity demanded.

A

finknow

business_ethics

An externality

causes the equilibrium price to be artificially high

causes the equilibrium price to be artificially low

exists when markets cannot reach equilibrium

results in an equilibrium that does not maximize the total benefit to society

D

finknow

business_ethics

What is one reason why the government discourages collusion between large firms in the same industry?

Collusive output levels tend to increase, driving the price above competitive levels.

Consumer surplus falls as the price is driven downward.

Collusive output levels tend to decrease, driving the price down to competitive levels.

Joint profit maximization costs society consumer surplus as the price rises above competitive levels.

D

finknow

business_ethics

The apple market is in equilibrium. Suppose we observe that apple growers are using more pesticides to increase apple production. At the same time, we hear that the price of pears, a substitute for apples, is rising. Which of the following is a reasonable prediction for the new price and quantity of apples?

Price rises, but quantity is ambiguous.

Price falls, but quantity is ambiguous.

Price is ambiguous, but quantity rises.

Price is ambiguous, but quantity falls.

C

finknow

business_ethics

Which of the following is most likely to result in a shift to the right in the demand curve for orange juice?

A bumper crop of oranges in Florida

A decrease in the price of Tang

Expectations of lower future prices for orange juice

Expectations of higher future income among juice drinkers

D

finknow

business_ethics

Which of the following is characteristic of oligopoly? I. Formidable barriers to entry. II. Price (P) = Marginal Revenue (MR). III. Relatively few sellers.

I only.

II only.

III only.

I and III only.

D

finknow

business_ethics

If the price of a product decreases with the price of a substitute product remaining constant such that the consumer buys more of this product, this is called the

income effect.

substitution effect.

marginal effect.

supply effect.

B

finknow

business_ethics

A small business estimates price elasticity of demand for the product to be 3. To raise total revenue, owners should

decrease price as demand is elastic.

decrease price as demand is inelastic.

increase price as demand is elastic.

increase price as demand is inelastic.

A

finknow

business_ethics

The Law of Diminishing Marginal Returns is responsible for

AVC that first rises, but eventually falls, as output increases.

AFC that first rises, but eventually falls, as output increases.

MP that first falls, but eventually rises, as output increases.

MC that first falls, but eventually rises, as output increases.

D

finknow

business_ethics

Diminishing marginal returns to short-run production begin when

the average product of labor begins to fall.

the total product of labor begins to fall.

marginal product of labor becomes negative.

marginal product of labor begins to fall.

D

finknow

business_ethics

Firms maximize their profits by producing a level of output at which

MC = AFC.

MC = MR.

P = ATC.

MR= AVC.

B

finknow

business_ethics

In the short run, a firm employs labor and capital to produce gadgets. If the annual price of capital increases, what will happen to the short-run cost curves?

The marginal cost and average variable cost curves will shift upward.

The average fixed cost and average total cost curves will shift upward.

The marginal cost and average fixed cost curves will shift upward.

The marginal cost, average fixed cost, average variable cost, and average total cost curves will all shift upward.

B

finknow

business_ethics

Which of the following was not a landmark antitrust act?

The Wagner Act

The Sherman Act

The Clayton Act

The Robinson-Patman Act

A

finknow

business_ethics

Which of the following is an example of a long-run adjustment for the owners of a small café?

The owners switch from whole wheat to sourdough bread.

The owners hire several part-time workers to cover the dinner shifts.

The owners work overtime on a busy weekend.

The owners buy the office next door, and this doubles the customer seating.

D

finknow

business_ethics

A competitive firm's demand for labor is determined directly by

profits

the opportunity cost of workers’ time

the wage and the average (physical) product of labor

the marginal (physical) product of labor and the output price

D

finknow