Chapter 1 Test Bank

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Chapter 1

Multiple-Choice Questions

|1. |Recording, classifying, and summarizing economic events in a logical manner for the purpose of providing financial | |easy |information for decision making is commonly called: | |c |a. finance. | | |b. auditing. | | |c. accounting. | | |d. economics. | | | | |2. |In the audit of historical financial statements, which of the following accounting bases is the most common? | |easy | | |c |a. Regulatory accounting principles. | | |b. Cash basis of accounting. | | |c. Generally accepted accounting principles. | | |d. Liquidation basis of accounting. | | | | |3. |Any service that requires a CPA firm to issue a report about the reliability of an assertion that is made by another | |easy |party is a(n): | |b |a. accounting and bookkeeping service. | | |b. attestation service. | | |c. assurance service. | | |d. tax service. | | | | |4. |Three common types of attestation services are: | |easy |a. audits, reviews, and “other” attestation services. | |a |b. audits, verifications, and “other” attestation services. | | |c. reviews, verifications, and “other” attestation services. | | |d. audits, reviews, and verifications. | | | | |5. (SOX) |The organization that is responsible for...
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