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ACCT 444 DeVry Week 8 Final Exam

Page 1

Question 1.1. (TCO 1)

Because of the risk of material misstatement, an audit of financial statements in accordance with generally accepted auditing standards should be planned and performed with an attitude of (Points : 5)

objective judgment.

independent integrity.

professional skepticism.

impartial conservatism.

Question 2.2. (TCO 2)

When an auditor submits a document containing audited financial statements to a client, and those financial statements include supplementary information required by GAAP, the auditor may choose any of the following options, except (Points : 5)

express an opinion on the information, if he or she has been engaged to examine such information.

express negative assurance on the information, if review procedures have been appropriately performed.

report on whether the information is fairly stated in relation to the financial statements taken as a whole, if appropriate procedures have been applied.

disclaim an opinion on the information.

Question 3.3. (TCO 2)

In which of ACCT 444 Week 8 Final Exam the following situations would an auditor ordinarily choose between expressing a qualified opinion or an adverse opinion? (Points : 5)

The ACCT444 auditor did not observe the entity’s physical inventory and is unable to become satisfied about its balance by other auditing click here procedures.

Conditions that cause the auditor to have substantial doubt about the entity’s ability to continue as a concern are inadequately disclosed.

There has been a change in accounting principles that has a material effect on the comparability of the entity’s financial statements.

The auditor is unable to apply necessary procedures concerning an investor’s share of an investee’s earnings recognized on the equity method.

Question 4.4. (TCO 3)

The phrase U.S. generally accepted accounting principles is an accounting term that (Points : 5)

includes broad guidelines of general application but not detailed practices and procedures.

encompasses the conventions, rules, and procedures necessary to define U.S. accepted accounting practice at a particular time.

provides a measure of conventions, rules, and procedures governed by the AICPA.

is included in the audit report to indicate that the audit has been conducted in accordance with generally accepted auditing standards (GAAS).

Tags: ACCT 444, ACCT 444 DeVry, ACCT 444 DeVry Final Exam, ACCT 444 Week 8 Final Exam, ACCT444, ACCT444DeVry, ACCT444DeVryFinalExam, ACCT444Week8FinalExam.

ACCT 429 Week 8 Final Exam


ACCT 429 DeVry Week 8 Final Exam

1.(TCOs 2, 3, and 5) We learned this semester that not only do we have to determine the amount of income that a taxpayer must recognize for tax purposes, but we also need to determine the type or character of income that is recognized. As we know, this may depend on the type of transaction that generated the income at issue. Explain the general types or categories of income that exist under the Code (e.g., ordinary), and how the amount of each type of income is calculated and taxed under the Code, including what rates may apply.(Points : 25)

Question 2.2.(TCOs 2, 4, and 5) This semester, we learned that Congress designed the Code to include various deductions from income. (NOTE: We are not discussing the deductions that may arise from losses.) There are two deductions that are particularly important to corporations:

(1) the Section 162 deduction for business expenses and

(2) the dividend-received deduction. How does the IRS generally interpret deductions (i.e., broadly or narrowly)?

How do we determine whether a taxpayer is entitled to each of these two deductions?

What is the purpose of each of these deductions?

How is each calculated, and are there any limits on the deduction?

Finally, what generally governs when a taxpayer may take each of these two deductions? (Points : 25)

Question 3.3.(TCOs 2, 5, 6, and 7) As a tax practitioner, you often get people asking questions concerning the tax effect of property transactions. This year is no exception. You’ve had individual clients ask you the following questions: I had some business property that was destroyed by a fire. I received payment on the property by the insurance company equal to the full fair market value of the property, which was higher than its adjusted basis. I took the insurance proceeds and purchased a new piece of property, but click here the property purchased cost less than the amount of the payment from the insurance company.

My corporation sold some depreciable property (a machine) this year. The amount realized on the transaction was higher than the adjusted basis of the property after taking depreciation into account. How will the corporation account for here this gain? Would it have been any different if the ACCT429DeVryFinalExam property was sold by me as an individual instead of the corporation?

Answer each of these questions, explaining the rules that apply to each property transaction and the possible tax consequences of each. (Points : 50)

Question 4.4.(TCOs 2, 3, and 4) One of your corporate clients has approached you about whether or not its employees are required to include certain benefits provided by the corporation in their income. In particular, the corporation has inquired whether the following benefits provided by the corporation to employees would be included in an employee’s taxable income:

I. The employer would like to provide a holiday present to each employee at the end of December. It envisions providing gift cards, including a gift card for dinner at a local restaurant and a gift card for an electronics store. It also plans on providing each employee a $150.00 holiday bonus in a separate check.

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