The 11 sections (titles) in the Sarbanes-Oxley Act of 2002 _____.
A. require corporations to payout all the earnings as dividends
B. establish standards for accountability and responsibility in reporting financial information
C. allow management to take actions resulting in large gains to them and losses to stockholders
D. allow management to use confidential information for personal gains
E. require stockholders to make capital structure decisions
Answer: B
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A firm that believes that employees must be closely supervised and controlled would most likely employ _____
a. a promotion-from-within policy b. comprehensive training programs to enrich employees c. job rotation and a flat organization d. specialization and a tall organization
Metro Facilities, Inc, contracts to sell a parking lot to Nouveau Property Company. The contract provides that if Metro does not close the deal by September 15, it must pay Nouveau one-half of the contract price. This provision is not enforceable because it is A) a liquidated damages clause
B) an exculpatory clause. C) a limitation-of-liability clause. D) a penalty clause.
PCAOB Auditing Standard No.16 requires the auditor to communicate with the audit committee all but:
A. Significant accounting policies and practices B. Critical accounting practices and policies C. Significant unusual transactions D. The procedures followed by the auditor in evaluating evidence
Gloria Catering provided $1,000 of catering services and billed its client for the amount owed. Determine the general journal entry that Gloria Catering will make to record this transaction.
A.
| Accounts Receivable | 1,000 | |
| Unearned Catering Revenue | 1,000 |
B.
| Accounts Receivable | 1,000 | |
| Catering Revenue | 1,000 |
C.
| Unearned Catering Revenue | 1,000 | |
| Catering Revenue | 1,000 |
D.
| Accounts Payable | 1,000 | |
| Catering Revenue | 1,000 |
E.
| Catering Revenue | 1,000 | |
| Accounts Receivable | 1,000 |