ACCT 460 Exam 1 Binghamton University
EXAM COVERAGE
ACCT 460 - Exam 1 (Binghamton University)
Financial Reporting & Conceptual Framework -
GAAP/IFRS standards, qualitative characteristics of useful
financial information
Revenue Recognition - Basic principles, performance
obligations, contract identification
Balance Sheet & Income Statement Accounts - Asset,
liability, equity, revenue, and expense classification
,Adjusting & Closing Entries - Accruals, deferrals,
prepayments, estimates, temporary vs permanent
accounts
Cash & Receivables - Bank reconciliations, AR aging,
allowance method for bad debts
Inventory Accounting - FIFO, LIFO, weighted average,
lower of cost or net realizable value
Property, Plant & Equipment - Acquisition, depreciation
methods, disposal, impairment
Internal Controls & Ethics - Segregation of duties, fraud
prevention, ethical reporting considerations
Financial Statement Presentation - Proper format,
classification, disclosure requirements
,1. Audit risk
A. is the risk that a company may hire an incompetent
auditor.
B. Can be completely eliminated through appropriate
sampling of transactions.
C. is the risk that an inappropriate opinion will be issued
on financial statements that are materially misstated.
D. is what creates the demand for an audit.
C. is the risk that an inappropriate opinion will be issued
on financial statements that are materially misstated.
, 2. The fact that errors and/or omissions in certain relatively
insignificant account balances would not affect an
auditor's decision when reporting on the financial
statements as a whole relates most closely to which major
audit concept?
A. Audit risk.
B. Materiality.
C. Reasonable assurance.
D. Management assertions.
B. Materiality.
EXAM COVERAGE
ACCT 460 - Exam 1 (Binghamton University)
Financial Reporting & Conceptual Framework -
GAAP/IFRS standards, qualitative characteristics of useful
financial information
Revenue Recognition - Basic principles, performance
obligations, contract identification
Balance Sheet & Income Statement Accounts - Asset,
liability, equity, revenue, and expense classification
,Adjusting & Closing Entries - Accruals, deferrals,
prepayments, estimates, temporary vs permanent
accounts
Cash & Receivables - Bank reconciliations, AR aging,
allowance method for bad debts
Inventory Accounting - FIFO, LIFO, weighted average,
lower of cost or net realizable value
Property, Plant & Equipment - Acquisition, depreciation
methods, disposal, impairment
Internal Controls & Ethics - Segregation of duties, fraud
prevention, ethical reporting considerations
Financial Statement Presentation - Proper format,
classification, disclosure requirements
,1. Audit risk
A. is the risk that a company may hire an incompetent
auditor.
B. Can be completely eliminated through appropriate
sampling of transactions.
C. is the risk that an inappropriate opinion will be issued
on financial statements that are materially misstated.
D. is what creates the demand for an audit.
C. is the risk that an inappropriate opinion will be issued
on financial statements that are materially misstated.
, 2. The fact that errors and/or omissions in certain relatively
insignificant account balances would not affect an
auditor's decision when reporting on the financial
statements as a whole relates most closely to which major
audit concept?
A. Audit risk.
B. Materiality.
C. Reasonable assurance.
D. Management assertions.
B. Materiality.
