MA 600 Quiz 2

Which type of working trial balance is divided into two components: the working comprehensive income and the working financial position?

• One-section trial balance

• Two-section trial balance

• Consolidated trial balance

• Comparative trial balance

In the one-section trial balance, which of the following is not one of the pairs of columns maintained?

• Trial balance

• Adjustments and reclassifications

• Adjusted profit or loss accounts

• Adjusted cash flow accounts

A lead schedule is primarily used to:

• Record adjusting entries for prior period errors

• Combine several amounts which total to a line item in the financial statements

• Correct misstatements in revenue and expense accounts

• Reconcile differences between general ledger and subsidiary ledgers

Which term refers to a difference between the amount, classification, presentation, or disclosure of a reported financial statement item and that required for compliance?

• Error

• Misstatement

• Reclassification

• Discrepancy

Fraud, as defined in the material, involves:

• An unintentional omission of financial data

• Intentional misrepresentation of a material fact to obtain an unjust or illegal advantage

• A mathematical mistake in calculation

• Failure to apply generally accepted accounting principles due to negligence

Which of the following is not listed as an example of fraudulent financial reporting?

• Manipulation of records

• Intentional misapplication of accounting policies

• Embezzling cash

• Alteration of documents

Professional skepticism includes which of the following attributes?

• Maintaining absolute certainty in the absence of evidence

• A questioning mind and a critical assessment of evidence

• Accepting management assertions without verification

• Avoiding detection of minor errors to maintain efficiency

Prior period errors may arise from:

• Changes in accounting estimates

• Oversights or misinterpretations of facts

• Variations in market conditions

• Natural disasters affecting records

Which error type is automatically corrected in the subsequent year if undetected?

• Non-counterbalancing error

• Counterbalancing error

• Material error

• Restatement error

An error affecting depreciation would typically be classified as:

• Counterbalancing

• Non-counterbalancing

• Reclassifiable

• Automatic adjustment error