The main objective for preparing a trial balance is:

a) to prove the equality of debit and credit
b) to check the income and expenditure
c) to check the asset and liabilities
d) to find out the net profits

Your CPA firm is auditing a client with a December 31, 2020 year-end. Your firm expects to complete the audit fieldwork on March 15, 2021. In practice, the letters of audit inquiry should be sent to the client's external legal counsel on approximately:

a. September 1, 2020
b. January 1, 2021
c. March 1, 2021
d. March 15, 2021

Which is the fourth amount section in a ten-column worksheet?

a.) income statement
b.) balance sheet
c.) adjusted trial balance
d.) adjustments

By matching revenue earned during the accounting period to related incurred expenses,

a. net income or loss will always be overestimated
b. net income or loss will always be underestimated
c. net income or loss will not be determined
d. net income or loss will be properly reported on the income statement

Which one of the following accounts will not appear in a balance sheet?

a.) temporary account
b.) permanent account
c.) asset account
d.) owners equity account

Which of the following is a benefit of a diverse work environment?

a. Being better ability to create the products desired by consumers
b. Experiencing fewer discrimination lawsuits, fewer union clashes, and less government regulatory action
c. Improving employee relationships and increasing productivity
d. All are benefits of a diverse work environment.

Which of the following should be included in the physical inventory of a company

a. Goods held on consignment from another company.
b. Goods in transit to another company shipped FOB shipping point.
c. Goods in transit from another company shipped FOB shipping point.
d. Both b and c above.

Which one of the following entries are recorded at the end of a fiscal period to update the general ledger accounts?

a) closing
b) adjusting
c) reversing
d) posting

Which is true of budgets?

A) They are used in the planning, but not in the control, process.
B) They are voted on and approved by stockholders.
C) They are used in performance evaluation.
D) There is a standard form and structure for budgets.

Which statement below is not a reason for a corporation to buy back its own stock.

a. for supporting the market price of the stock
b. bonus to employees
c. to increase the shares outstanding
d. resale to employees

Because of automation, which component of product cost is declining?

a. Manufacturing overhead
b. Direct materials
c. Advertising
d. Direct labor

One of the weaknesses of the direct write-off method is that it:

a. understates accounts receivable on the balance sheet
b. violates the matching principle
c. is too difficult to use for many companies
d. is based on estimates

If an income summary amount in a worksheet is adjusted, the debit column represents a/an:

a) increase in the merchandise inventory
b) decrease in the merchandise inventory
c) opening balance of the merchandise inventory
d.) closing balance of the merchandise inventory

What was the labor rate variance for the month?

The following direct labor standards have been established for product S57S:

• Standard direct labor hours........... 1.5 hours per unit of S57S
• Standard direct labor wage rate....... $14.70 per hour

The following data pertain to last month's operations:

• Actual output of product S57S.............. 720 units
• Actual direct labor hours worked ........ 1,000 hours
• Actual direct labor wages paid............$14, 800