diff --git "a/(MMLU) interim_20241212-013440/interim_professional_accounting.json" "b/(MMLU) interim_20241212-013440/interim_professional_accounting.json" new file mode 100644--- /dev/null +++ "b/(MMLU) interim_20241212-013440/interim_professional_accounting.json" @@ -0,0 +1,1987 @@ +{ + "metadata": { + "model_name": "llama-3.3-70b-instruct", + "ntrain": 0, + "ntest": -1, + "timestamp": "20241212-115722" + }, + "subject": "professional_accounting", + "category": "other (business, health, misc.)", + "correct_rate": 56.02836879432624, + "evaluation_results": [ + { + "question": "You bought a limousine for $98,000 and are planning to rent it for weddings, ceremonies and parties at $245 per hour. If you estimate the car will be hired for 2 hours a day on average, with daily costs at about $50, what is the estimated yearly yield on your investment if you work all year round, i.e. every day of the year, including any festivities and weekends?", + "model_answer": "A", + "correct_answer": 0, + "is_correct": true, + "response_time": 37.13598680496216 + }, + { + "question": "Arno Co. did not record a credit purchase of merchandise made prior to year end. However the merchandise was correctly included in the year-end physical inventory. What effect did the omission of reporting the purchase of merchandise have on Arno's balance sheet at year end? Assets Liabilities", + "model_answer": "C", + "correct_answer": 1, + "is_correct": false, + "response_time": 37.137627840042114 + }, + { + "question": "Which of the following statements about audit sampling risks is correct for a nonissuer?", + "model_answer": "A.", + "correct_answer": 1, + "is_correct": false, + "response_time": 37.139041900634766 + }, + { + "question": "Which of the following procedures would an auditor generally perform regarding subsequent events?", + "model_answer": "C", + "correct_answer": 3, + "is_correct": false, + "response_time": 37.139179944992065 + }, + { + "question": "The FASB makes changes to the Accounting Standards Codification by issuing", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 37.13930797576904 + }, + { + "question": "An investment project costing $500 today will generate profits of $500 in year five and year ten. If the discount rate is 10%, what is the project’s NPV?", + "model_answer": "B", + "correct_answer": 2, + "is_correct": false, + "response_time": 37.139426708221436 + }, + { + "question": "On July 1 year 7 Dean Co. issued at a premium bonds with a due date of July 1 year 12. Dean incorrectly used the straight-line method instead of the effective interest method to amortize the premium. How were the following amounts affected by the error at June 30 year 12? Bond carrying Retained amount earnings", + "model_answer": "A.", + "correct_answer": 3, + "is_correct": false, + "response_time": 37.13954567909241 + }, + { + "question": "What is the price of a three-year bond (face value $100), paying 5% coupons, with a yield of 6%?", + "model_answer": "C", + "correct_answer": 3, + "is_correct": false, + "response_time": 37.13965892791748 + }, + { + "question": "A company recently moved to a new building. The old building is being actively marketed for sale, and the company expects to complete the sale in four months. Each of the following statements is correct regarding the old building, except:", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 37.13977074623108 + }, + { + "question": "Carson owned 40% of the outstanding stock of a C corporation. During a tax year, the corporation reported $400,000 in taxable income and distributed a total of $70,000 in cash dividends to its shareholders. Carson accurately reported $28,000 in gross income on Carson’s individual tax return. If the corporation had been an S corporation and the distributions to the owners had been proportionate, how much income would Carson have reported on Carson’s individual return?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 37.13996171951294 + }, + { + "question": "An investment will pay out $10 p.a. forever. What is that investment worth if the market discount rate is 5%?", + "model_answer": "D.", + "correct_answer": 3, + "is_correct": true, + "response_time": 46.37010192871094 + }, + { + "question": "Smith has an adjusted gross income (AGI) of $120,000 without taking into consideration $40,000 of losses from rental real estate activities. Smith actively participates in the rental real estate activities. What amount of the rental losses may Smith deduct in determining taxable income?", + "model_answer": "D.", + "correct_answer": 1, + "is_correct": false, + "response_time": 46.37023901939392 + }, + { + "question": "Which of the following is an element of a CPA firm's quality control policies and procedures applicable to the firm's accounting and auditing practice?", + "model_answer": "B.", + "correct_answer": 0, + "is_correct": false, + "response_time": 46.370354890823364 + }, + { + "question": "A company predicted that it would manufacture 10,000 units of finished goods during March. The direct labor standards indicated that each unit of finished goods requires 2.4 direct labor hours at a standard wage of $20 per hour, totaling $48.00 per finished good unit. During March, the company actually made 9,000 units of finished goods. Production used 2.5 labor hours per finished unit, and the company actually paid $21 per hour, totaling $52.50 per unit of finished product. What amount is the company's direct labor rate variance for March?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 46.37046813964844 + }, + { + "question": "The full-employment gross domestic product is $1.3 trillion, and the actual gross domestic product is $1.2 trillion. The marginal propensity to consume is 0.8. When inflation is ignored, what increase in government expenditures is necessary to produce full employment?", + "model_answer": "B", + "correct_answer": 2, + "is_correct": false, + "response_time": 46.370579957962036 + }, + { + "question": "Which of the following types of audit evidence provides the least assurance of reliability?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 46.370692014694214 + }, + { + "question": "During year 2 Pipp Co. incurred the following costs to develop and produce a routine low-risk computer software product: Completion of detailed program design $10000 Costs incurred for coding and testing to establish technological feasibility $15000 Other coding and testing costs incurred after establishment of technological feasibility $44000 In Pipp's December 31 year 2 balance sheet what amount should be capitalized as software cost?", + "model_answer": "D.", + "correct_answer": 2, + "is_correct": false, + "response_time": 46.370802879333496 + }, + { + "question": "During an engagement to compile the financial statements of a nonissuer an accountant becomes aware that management had stated land at appraised value and that if GAAP had been followed both the land account and stockholders' equity would have been decreased by $1 million a material amount. The accountant decides to modify the standard compilation report because management will not revise the financial statements. Under these circumstances the accountant should", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 46.37091612815857 + }, + { + "question": "Under the Sales Article of the UCC, which of the following circumstances best describes how the implied warranty of fitness for a particular purpose arises in a sale of goods transaction?", + "model_answer": "A.", + "correct_answer": 2, + "is_correct": false, + "response_time": 46.37103009223938 + }, + { + "question": "Before accepting an audit engagement a CPA should evaluate whether conditions exist that raise questions as to the integrity of management. Which of the following conditions most likely would raise such questions?", + "model_answer": "C.", + "correct_answer": 1, + "is_correct": false, + "response_time": 46.37114191055298 + }, + { + "question": "In an e-commerce environment that requires that the information technology (IT) system be available on a continuous basis, more emphasis will be placed on which of the following aspects of the planning than in a traditional organization?", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 46.69060492515564 + }, + { + "question": "Spark Co. buys cordless phones for $125 each and sells them for $200 each. Spark pays a sales commission of $25 per phone sold and monthly fixed costs are $3000. Assuming Spark desired a profit of 10% of sales how many units must Spark sell?", + "model_answer": "B.", + "correct_answer": 3, + "is_correct": false, + "response_time": 46.69128203392029 + }, + { + "question": "Inherent risk and control risk differ from detection risk in which of the following ways?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 46.69168996810913 + }, + { + "question": "Ultra Co. uses a periodic inventory system. The following are inventory transactions for the month of January: 1/1 Beginning inventory 20000 units at $13 1/20 Purchase 30000 units at $15 1/23 Purchase 40000 units at $17 1/31 Sales at $20 per unit 50000 units Ultra uses the LIFO method to determine the value of its inventory. What amount should Ultra report as cost of goods sold on its income statement for the month of January?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 46.69225096702576 + }, + { + "question": "On day 1, Jackson, a merchant, mailed Sands a signed letter that contained an offer to sell Sands 500 electric fans at $10 per fan. The letter was received by Sands on day 3. The letter contained a promise not to revoke the offer but no expiration date. On day 4, Jackson mailed Sands a revocation of the offer to sell the fans. Sands received the revocation on day 6. On day 7, Sands mailed Jackson an acceptance of the offer. Jackson received the acceptance on day 9. Under the Sales Article of the UCC, was a contract formed?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 46.692399978637695 + }, + { + "question": "Elan Co. has two employees. Each employee receives two weeks of paid vacation each year. Vacation rights accumulate. One employee whose weekly salary is $600 took a two-week vacation during the year but the other employee who earns $800 per week took no vacation during the year. In its year-end financial statements what amount should Elan report as vacation liability and expense? Liability Expense", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 46.692522048950195 + }, + { + "question": "Which of the following statements is correct regarding the Federal Unemployment Tax Act?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 46.692636013031006 + }, + { + "question": "When the AQR partnership was formed, partner Acre contributed land with a fair market value of $100,000 and a tax basis of $60,000 in exchange for a one-third interest in the partnership. The AQR partnership agreement specifies that each partner will share equally in the partnership’s profits and losses. During its first year of operation, AQR sold the land to an unrelated third party for $160,000. What is the proper tax treatment of the sale?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 46.69275093078613 + }, + { + "question": "The purpose of establishing quality control policies and procedures for deciding whether to accept or continue a client relationship is to", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 46.69287300109863 + }, + { + "question": "What is the price of a five-year bond (face value $100) that pays no coupons, if its yield is 4%?", + "model_answer": "B", + "correct_answer": 2, + "is_correct": false, + "response_time": 46.69311499595642 + }, + { + "question": "Vital Corp. is an accrual-basis calendar-year C corporation. Its year 2 reported book income before federal income taxes was $500000. Included in that amount were the following items: Year 1 state franchise tax refund $50000 Municipal bond interest income 7500 What should be the amount of Vital's year 2 taxable income as reconciled on Vital's Schedule M-1 of Form 1120 U.S. Corporation Income Tax Return?", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 38.33107018470764 + }, + { + "question": "A practitioner is engaged to express an opinion on management’s assertion that the square footage of a warehouse offered for sale is 150,000 square feet. The practitioner should refer to which of the following sources for professional guidance?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 38.33118009567261 + }, + { + "question": "Swift Co. has identified three operating segments that may require separate disclosure in Swift's general purpose financial statements for the year ended December 31 year 2. Information for year 2 follows: Segment (in thousands) A B C Total Reported revenue $ 42 $ 121 $ 14 $ 177 Reported profit(loss) $ 12 $ 65 $ (3) $ 74 Assets $ 470 $ 800 $ 80 $ 1350 Which of Swift's segments are required to be separately disclosed in its December 31 year 2 financial statements?", + "model_answer": "D", + "correct_answer": 0, + "is_correct": false, + "response_time": 38.3312771320343 + }, + { + "question": "When there has been a change in accounting principles, but the effect of the change on the comparability of the financial statements is not material, the auditor should", + "model_answer": "B", + "correct_answer": 0, + "is_correct": false, + "response_time": 38.33137011528015 + }, + { + "question": "Long was a purchasing agent for Frost, a sole proprietor. Long had express authority to place purchase orders with Frost's suppliers. Long conducted business on the Internet and had little contact with Frost. After Frost was declared incompetent in a judicial proceeding, Long placed an order with Grant Corp. on Frost's behalf. Both Long and Grant were unaware of Frost's incompetence. Will Frost or Frost's legal representative be liable to Grant?", + "model_answer": "B.", + "correct_answer": 3, + "is_correct": false, + "response_time": 38.33148431777954 + }, + { + "question": "Which of the following factors should an external auditor obtain updated information about when assessing an internal auditor’s competence?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 38.33162331581116 + }, + { + "question": "Which of the following procedures would an auditor most likely perform before the balance sheet? date?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 38.33172607421875 + }, + { + "question": "Securities A, B and C have an expected return of respectively 7%, 12% and 5%. What is the expected return of an equal weighted portfolio composed of Securities A and C?", + "model_answer": "B", + "correct_answer": 2, + "is_correct": false, + "response_time": 38.33182120323181 + }, + { + "question": "Lei-Feng, Inc.'s $100 par value preferred stock just paid its $10 per share annual dividend. The preferred stock has a current market price of $96 a share. The firm's marginal tax rate (combined federal and state) is 40 percent, and the firm plans to maintain its current capital structure relationship into the future. The component cost of preferred stock to Lei-Feng, Inc. would be closest to .", + "model_answer": "C", + "correct_answer": 3, + "is_correct": false, + "response_time": 38.33191514015198 + }, + { + "question": "In the current year Poplar City paid $5000 interest and $20000 principal on its outstanding general obligation bonds. The payment was made from a debt service fund using cash transferred earlier the same year from the general fund. How should the city report the expenditures? General fund Debt service fund Permanent fund", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 38.33200716972351 + }, + { + "question": "A company exchanged land with an appraised value of $50,000 and an original cost of $20,000 for machinery with a fair value of $55,000. Assuming that the transaction has commercial substance, what is the gain on the exchange?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 35.15422534942627 + }, + { + "question": "An investment project cost $1 million to undertake and will deliver $2 million in five years’ time. The discount rate is 10%. What is the project’s NPV?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 35.15496230125427 + }, + { + "question": "Brown cosigned Royal's $50000 note to State Bank. If Royal is later adjudicated mentally incompetent what would be Brown's liability on the note?", + "model_answer": "B.", + "correct_answer": 0, + "is_correct": false, + "response_time": 35.15892815589905 + }, + { + "question": "On January 1, a company enters into an operating lease for office space and receives control of the property to make leasehold improvements. The company begins alterations to the property on March 1 and the company’s staff moves into the property on May 1. The monthly rental payments begin on July 1. The recognition of rental expense for the new offices should begin in which of the following months?", + "model_answer": "D", + "correct_answer": 0, + "is_correct": false, + "response_time": 35.1592812538147 + }, + { + "question": "Which of the following circumstances most likely would cause an auditor to suspect that there are material misstatements in an entity's financial statements?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 35.159653186798096 + }, + { + "question": "A taxpayer purchases and is the owner of an insurance contract on his own life and designates his two children as equal beneficiaries. The taxpayer makes all premium payments. How many gifts of property, if any, have been made for gift tax purposes?", + "model_answer": "C.", + "correct_answer": 0, + "is_correct": false, + "response_time": 35.160295248031616 + }, + { + "question": "The City of Windemere decided to construct several large windmills to generate electrical power. The construction was financed through a general residential property tax levy for the next ten years. Utility revenues are intended to offset all expenses associated with the windmills. The land for the windmills was donated to the city by a local farmer. The land from the farmer should be reported in which fund type?", + "model_answer": "D.", + "correct_answer": 2, + "is_correct": false, + "response_time": 35.160985231399536 + }, + { + "question": "Decker a 62-year-old single individual sold his principal residence for the net amount of $500000 after all selling expenses. Decker bought the house 15 years ago and occupied it until it was sold. On the date of sale the house had a cost basis of $200000. Within six months Decker purchased a new house for $600000. What amount of gain should Decker recognize from the sale of the residence?", + "model_answer": "A.", + "correct_answer": 1, + "is_correct": false, + "response_time": 35.16112422943115 + }, + { + "question": "To which of the following rights is a holder of a public corporation's cumulative preferred stock always entitled?", + "model_answer": "B", + "correct_answer": 2, + "is_correct": false, + "response_time": 35.161216020584106 + }, + { + "question": "According to the SEC, members of an issuer’s audit committee may not", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 35.16130614280701 + }, + { + "question": "Order the following (risk, return) pairs from least to most favourable, assuming the perspective of a rational and risk-averse investor: (2,2),(2,3) and (4,2). Risk is measured in standard deviations and return in percentage. HINT: Imagine a scatter diagram with standard deviation on the x-axis and return on the y-axis.", + "model_answer": "C", + "correct_answer": 0, + "is_correct": false, + "response_time": 40.84861516952515 + }, + { + "question": "Sussman Co. prepared cash-basis financial statements for the month ended January 31. A summary of Sussman's January activities follows: Credit sales of $5600. Collections of $1900 relating to January credit sales. Accrued salaries of $1200. By what amount will Sussman's cash-basis income for the month ended January 31 increase as a result of restating these activities to the accrual basis of accounting?", + "model_answer": "B", + "correct_answer": 0, + "is_correct": false, + "response_time": 40.849292039871216 + }, + { + "question": "According to COSO, an effective approach to monitoring internal control involves each of the following steps, except", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 40.84970712661743 + }, + { + "question": "A bond issued on June 1, year 1, has interest payment dates of April 1 and October 1. Bond interest expense for the year ended December 31, year 1, is for a period of", + "model_answer": "C.", + "correct_answer": 3, + "is_correct": false, + "response_time": 40.849852323532104 + }, + { + "question": "Which of the following is an important consideration when deciding the nature of tests to use in a financial statement audit?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 40.84996819496155 + }, + { + "question": "On January 1 the partners' interest in capital profits and losses of Studio Partnership were: Partners Percentages Ross 15% Stone 35% Taylor 50% On April 9 Stone sold his entire interest to Taylor. For tax purposes which of the following statements is correct regarding Studio's status as a partnership?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 40.85008215904236 + }, + { + "question": "Which of the following is a major difference between the just-in-time (JIT) and traditional approaches to manufacturing?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 40.85019636154175 + }, + { + "question": "On January 1, year 1, a company purchased equipment for $100 million. The equipment consists of four major components, of which two components comprise 80% of the total cost and each has a 20-year useful life. The remaining two components have costs of $10 million each; one of them has a useful life of four years, and the other has a useful life of five years. The company applies the cost model to the equipment and uses the straight-line method of depreciation. Under IFRS, what is the depreciation expense for the year ended December 31, year 1?", + "model_answer": "C.", + "correct_answer": 3, + "is_correct": false, + "response_time": 40.850306034088135 + }, + { + "question": "The fixed assets and related depreciation of a company are currently tracked on a password-protected spreadsheet. The information technology governance committee is designing a new enterprise-wide system and needs to determine whether the current fixed asset process should be included because the current system seems to be working properly. What long-term solution should the committee recommend?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 40.85041928291321 + }, + { + "question": "In selecting an appropriate sample for a substantive test the auditor most likely would stratify the population if the", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 40.85053324699402 + }, + { + "question": "Which of the following statements is correct regarding a shareholder‚Äôs right to inspect corporate books and records? The right", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 40.5155029296875 + }, + { + "question": "Which of the following procedures does a CPA usually perform when reviewing the financial statements of a nonissuer?", + "model_answer": "A", + "correct_answer": 0, + "is_correct": true, + "response_time": 40.5162570476532 + }, + { + "question": "Star Co. is a retail store specializing in contemporary furniture. The following information is taken from Star's June budget: Sales $540000 Cost of goods sold 300000 Merchandise inventory‚ÄìJune 1 150000 Merchandise inventory‚ÄìJune 30 180000 Accounts payable for purchases‚ÄìJune 1 85000 Accounts payable for purchases‚ÄìJune 30 75000 What amount should Star budget for cash disbursements for June purchases?", + "model_answer": "B.", + "correct_answer": 3, + "is_correct": false, + "response_time": 40.51721906661987 + }, + { + "question": "West is single has no dependents and does not itemize. West provides the following information regarding his current-year‚Äôs return: Long-term capital gain $15000 Percentage depletion in excess of property's adjusted basis 9000 Dividends from publicly-held companies 10000 What is the amount of West's AMT tax preference items?", + "model_answer": "C", + "correct_answer": 0, + "is_correct": false, + "response_time": 40.51738381385803 + }, + { + "question": "A company’s first IFRS reporting period is for the year ended December 31, year 2. While preparing the year 2 statement of financial position, management identified an error in which a $90,000 loss accrual was not recorded. $40,000 of the loss accrual related to a year 1 event and $50,000 related to a year 2 event. What amount of loss accrual should the company report in its December 31, year 1, IFRS statement of financial position?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 40.51750683784485 + }, + { + "question": "A project should be accepted if the present value of cash flows from the project is", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 40.51762104034424 + }, + { + "question": "Gulde’s tax basis in Chyme Partnership was $26,000 at the time Gulde received a liquidating distribution of $12,000 cash and land with an adjusted basis to Chyme of $10,000 and a fair market value of $30,000. Chyme did not have unrealized receivables, appreciated inventory, or properties that had been contributed by its partners. What was the amount of Gulde’s basis in the land?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 40.51773381233215 + }, + { + "question": "During the year Verity Co. purchased $200000 of Otra Co. bonds at par and $50000 of U.S. Treasury bills. Verity classified the Otra bonds as available-for-sale securities and the Treasury bills as cash equivalents. In Verity's statement of cash flows what amount should it report as net cash used in investing activities?", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 40.517844915390015 + }, + { + "question": "Which of the following would a successor auditor ask the predecessor auditor to provide after accepting an audit engagement?", + "model_answer": "C", + "correct_answer": 3, + "is_correct": false, + "response_time": 40.51795673370361 + }, + { + "question": "As of December 1, year 2, a company obtained a $1,000,000 line of credit maturing in one year on which it has drawn $250,000, a $750,000 secured note due in five annual installments, and a $300,000 three-year balloon note. The company has no other liabilities. How should the company’s debt be presented in its classified balance sheet on December 31, year 2 if no debt repayments were made in December?", + "model_answer": "B", + "correct_answer": 2, + "is_correct": false, + "response_time": 40.518070936203 + }, + { + "question": "Grant Co.'s sales budget shows the following projections for the year ending December 31: Quarter Units First 30000 Second 40000 Third 22500 Fourth 27500 Total 120000 Inventory at the beginning of the year was budgeted at 9000 units. The quantity of finished goods inventory at the end of each quarter is to equal 30% of the next quarter's budgeted sales of units. What amount should the production budget show for units to be produced during the first quarter?", + "model_answer": "A", + "correct_answer": 1, + "is_correct": false, + "response_time": 38.650980949401855 + }, + { + "question": "Johnson worked for ABC Co. and earned a salary of $100,000. Johnson also received, as a fringe benefit, group termlife insurance at twice Johnson’s salary. The annual IRS established uniform cost of insurance is $2.76 per $1,000. What amount must Johnson include in gross income?", + "model_answer": "B", + "correct_answer": 2, + "is_correct": false, + "response_time": 38.65135979652405 + }, + { + "question": "Vale is a 50% partner in Ball Partnership. Vale's tax basis in Ball on January 2 year 1 was $60000. Ball did not have unrealized receivables appreciated inventory or properties that had been contributed by its partners. On December 31 year 1 Ball made a $10000 nonliquidating cash distribution to each partner. The Ball Partnership income tax return reported the following items for year 1: Tax-exempt interest income $80000 Dividend income 12000 What total amount of gross income from Ball should be included in Vale's year 1 adjusted gross income?", + "model_answer": "B", + "correct_answer": 0, + "is_correct": false, + "response_time": 38.65183091163635 + }, + { + "question": "While performing an audit of the financial statements of a company for the year ended December 31, year 1, the auditor notes that the company’s sales increased substantially in December, year 1, with a corresponding decrease in January, year 2. In assessing the risk of fraudulent financial reporting or misappropriation of assets, what should be the auditor’s initial indication about the potential for fraud in sales revenue?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 38.652174949645996 + }, + { + "question": "If a warrant carries a right to buy one share of common stock and is exercisable at $20 per common share while the market price of a share is $30, the theoretical value of the warrant is:", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 38.65251088142395 + }, + { + "question": "Which of the following sampling methods would an auditor use to estimate a numerical measurement of a population such as the dollar value of inventory?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 38.65284490585327 + }, + { + "question": "After reviewing the end-user computing (EUC) policy of an organization, an internal auditor audits the actuarial function and notices that some minimum control requirements are missing. Which of the following is a risk of using potentially incorrect enduser developed files?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 38.65323090553284 + }, + { + "question": "Which of the following events most likely would indicate the existence of related party transactions?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 38.65337800979614 + }, + { + "question": "Which of the following explanations most likely would satisfy an auditor who questions management about significant debits to accumulated depreciation accounts in the current year?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 38.65356087684631 + }, + { + "question": "Zokro a nongovernmental not-for-profit organization uses the indirect method to prepare its statement of cash flows. In determining its net cash provided (used) by operating activities Sokro must add back which of the following to the change in net assets?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 38.65369486808777 + }, + { + "question": "A company’s new time clock process requires hourly employees to select an identification number and then choose the clock-in or clock-out button. A video camera captures an image of the employee using the system. Which of the following exposures can the new system be expected to change the least?", + "model_answer": "D", + "correct_answer": 1, + "is_correct": false, + "response_time": 38.96234703063965 + }, + { + "question": "A CPA prepared a tax return that involved a tax shelter transaction that was disclosed on the return. In which of the following situations would a tax return preparer penalty not be applicable?", + "model_answer": "A", + "correct_answer": 1, + "is_correct": false, + "response_time": 38.96251893043518 + }, + { + "question": "Ace Co. issued 1000 shares of its $10 par value common stock for $15 per share in cash. How should this transaction be reported in Ace's statement of cash flows for the year of issuance?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 38.962634801864624 + }, + { + "question": "Toft Co. had 120000 shares of common stock outstanding at January 1. On April 1 it issued 40000 additional shares of common stock. Outstanding all year were 10000 shares of nonconvertible preferred stock on which a dividend of $5 per share was declared during the year. Net income for the year was $480000. What should Toft report as earnings per share for the year?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 38.96274709701538 + }, + { + "question": "Smile Inc. purchased a computer on May 1 for $12000 with an estimated salvage value of $1500 and a 3-year life. What is the depreciation expense for the year ended December 31 using the double-declining method of depreciation?", + "model_answer": "D", + "correct_answer": 2, + "is_correct": false, + "response_time": 38.96286106109619 + }, + { + "question": "During an engagement to review the financial statements of a nonissuer, an accountant becomes aware of several leases that should be capitalized, but are not capitalized. The accountant considers these leases to be material to the financial statements. The accountant decides to modify the standard review report because management will not capitalize the leases. Under these circumstances, the accountant should", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 38.96297597885132 + }, + { + "question": "Cobb Inc.'s inventory at May 1 consisted of 200 units at a total cost of $1250. Cobb uses the periodic inventory method. Purchases for the month were as follows: Date No. of Units Unit cost Total Cost May 4 20 $5.80 $116.00 May 17 80 $5.50 $440.00 Cobb sold 10 units on May 14 for $120. What is Cobb's weighted average cost of goods sold for May?", + "model_answer": "C", + "correct_answer": 0, + "is_correct": false, + "response_time": 38.96308898925781 + }, + { + "question": "The following information pertains to Dash Co.'s utility bills: Period covered Amount Date paid April 16 ‚Äì May 15 $5000 June 1 May 16 ‚Äì June 15 $6000 July 1 June 16 ‚Äì July 15 $8000 August 1 What is the amount that Dash should report as a liability in its June 30 balance sheet?", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 38.96320104598999 + }, + { + "question": "A spouse died on December 31, year 1. The couple had no dependents. What should be the filing status of the surviving spouse in year 2?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 38.96331477165222 + }, + { + "question": "A company that produces a single product using a continuous process had no work in process on April 1. During the month of April 10000 units were started and 9000 completed units were transferred. The ending work-in-process inventory was complete as to materials and 50% complete as to conversion. The cost of direct materials was $114000 and the cost of direct labor amounted to $38000. Manufacturing overhead is assigned at the rate of 50% of direct materials. For the purpose of determining the cost of goods manufactured in April what is the cost per equivalent whole unit?", + "model_answer": "C", + "correct_answer": 1, + "is_correct": false, + "response_time": 38.96342706680298 + }, + { + "question": "What is the due date of a federal estate tax return (Form 706), for a taxpayer who died on May 15, year 2, assuming that a request for an extension of time is not filed?", + "model_answer": "A.", + "correct_answer": 3, + "is_correct": false, + "response_time": 29.10076904296875 + }, + { + "question": "On July 1 Alto Co. split its common stock 5 for 1 when the fair value was $100 per share. Prior to the split Alto had 10000 shares of $10 par value common stock issued and outstanding. After the split the par value of the stock", + "model_answer": "C", + "correct_answer": 3, + "is_correct": false, + "response_time": 29.101088047027588 + }, + { + "question": "In performing substantive tests regarding the granting of stock options to senior management of an issuer an auditor most likely would", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 29.10121488571167 + }, + { + "question": "If the objective of an auditor's test of details is to detect the overstatement of sales the auditor should trace transactions from the", + "model_answer": "B.", + "correct_answer": 0, + "is_correct": false, + "response_time": 29.101332902908325 + }, + { + "question": "Which of the following methods should be used to account for research and development costs with no alternative future use?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 29.10153293609619 + }, + { + "question": "Each of the following would be considered a Level 2 observable input that could be used to determine an asset or liability’s fair value, except", + "model_answer": "A", + "correct_answer": 2, + "is_correct": false, + "response_time": 29.10165500640869 + }, + { + "question": "Which of the following pricing policies results in establishment of a price to external customers higher than the competitive price for a given industry?", + "model_answer": "B", + "correct_answer": 0, + "is_correct": false, + "response_time": 29.10178303718567 + }, + { + "question": "What term is used to represent unavoidable past costs that cannot be changed no matter what action is taken?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 29.10190200805664 + }, + { + "question": "Which of the following is considered part of the required supplementary information for general purpose external financial reporting of a local government?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 29.10201597213745 + }, + { + "question": "The simple linear regression between stock and market returns", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 29.10212993621826 + }, + { + "question": "Which of the following financial instruments may be considered a derivative financial instrument?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 33.768072843551636 + }, + { + "question": "When an accountant compiles projected financial statements, the accountant’s report should include a separate paragraph that", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 33.768221855163574 + }, + { + "question": "Adam Smith is considering automating his pin factory with the purchase of a $475,000 machine. Shipping and installation would cost $5,000. Smith has calculated that automation would result in savings of $45,000 a year due to reduced scrap and $65,000 a year due to reduced labor costs. The machine has a useful life of 4 years and falls in the 3-year property class for MACRS depreciation purposes. The estimated final salvage value of the machine is $120,000. The firm's marginal tax rate is 34 percent. The incremental cash outflow at time period 0 is closest to", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 33.768420934677124 + }, + { + "question": "If requested to perform a compilation engagement for a nonissuer in which an accountant has an immaterial direct financial interest, the accountant is", + "model_answer": "A", + "correct_answer": 3, + "is_correct": false, + "response_time": 33.76857900619507 + }, + { + "question": "Aston and Becker are equal partners in AB Partnership. In the tax year the ordinary income of the partnership is $20000 and the partnership has a long-term capital gain of $12000. Aston's basis in AB was $40000 and he received distributions of $5000 during the year. What is Aston's share of AB's ordinary income?", + "model_answer": "A", + "correct_answer": 0, + "is_correct": true, + "response_time": 33.768697023391724 + }, + { + "question": "Which of the following procedures would an accountant least likely perform during an engagement to review the financial statements of a nonissuer?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 33.76881194114685 + }, + { + "question": "A compilation of financial statements in accordance with Statements on Standards for Accounting and Review Services is limited to presenting", + "model_answer": "B", + "correct_answer": 2, + "is_correct": false, + "response_time": 33.768924713134766 + }, + { + "question": "Stock A has a beta of 0.8, while Stock B has a beta of 1.4. The expected return on the market is 10% and the risk-free rate is 7%. Using CAPM and this stock information, what is the required rate of return for Stocks A and B, respectively?", + "model_answer": "A", + "correct_answer": 0, + "is_correct": true, + "response_time": 33.76903796195984 + }, + { + "question": "Darv Co. had a current ratio of 3-to-1 and a quick ratio of 1-to-1. Current liabilities were $322000. What was the total amount for inventory and prepaid expenses?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 33.769152879714966 + }, + { + "question": "Which characteristic of information in the statistical tables included in a comprehensive annual financial report differentiates it from information contained in the financial statements? Data covering financial trends Fiscal years", + "model_answer": "B", + "correct_answer": 0, + "is_correct": false, + "response_time": 33.769264698028564 + }, + { + "question": "Which of the following documents is typically issued as part of the due-process activities of the Financial Accounting Standards Board (FASB) for amending the FASB Accounting Standards Codification?", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 33.55747199058533 + }, + { + "question": "In preparing consolidated financial statements of a U.S. parent company with a foreign subsidiary, the foreign subsidiary’s functional currency is the currency", + "model_answer": "A", + "correct_answer": 3, + "is_correct": false, + "response_time": 33.55803394317627 + }, + { + "question": "Within the COSO Internal Control—Integrated Framework, which of the following components is designed to ensure that internal controls continue to operate effectively?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 33.55838179588318 + }, + { + "question": "Smythe Co. invested $200 in a call option for 100 shares of Gin Co. $.50 par common stock, when the market price was $10 per share. The option expired in three months and had an exercise price of $9 per share. What was the intrinsic value of the call option at the time of initial investment?", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 33.55896496772766 + }, + { + "question": "The Internal Revenue Code and the Regulations do not impose penalties on tax return preparers for which of the following?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 33.55968689918518 + }, + { + "question": "If an auditor includes an emphasis-of-matter paragraph to draw users' attention to a matter relevant to the users' understanding of the financial statements of a nonissuer, then the auditor should", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 33.559847831726074 + }, + { + "question": "To which of the following parties will a CPA be liable if the CPA fraudulently issues an unqualified opinion on a corporation's materially misstated financial statements? Corporate shareholders, Corporate bondholders", + "model_answer": "B", + "correct_answer": 0, + "is_correct": false, + "response_time": 33.55997061729431 + }, + { + "question": "Which of the following statements regarding an individual’s suspended passive activity losses is correct?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 33.5600860118866 + }, + { + "question": "Brill Co. made the following expenditures relating to Product X: Labor and material costs incurred in producing a prototype $100000 Cost of testing the prototype $40000 Legal costs to file a patent $5000 Production of Product X commenced when the patent was granted. What amount of the above costs should be expensed as research and development costs?", + "model_answer": "D", + "correct_answer": 2, + "is_correct": false, + "response_time": 33.56020402908325 + }, + { + "question": "While performing interim audit procedures of accounts receivable, numerous unexpected errors are found resulting in a change of risk assessment. Which of the following audit responses would be most appropriate?", + "model_answer": "A.", + "correct_answer": 3, + "is_correct": false, + "response_time": 33.56031894683838 + }, + { + "question": "An auditor has substantial doubt about the entity’s ability to continue as a going concern for a reasonable period of time because of negative cash flows and working capital deficiencies. Under these circumstances, the auditor would be most concerned about the", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 30.138511896133423 + }, + { + "question": "The statement of activities in the government-wide financial statements includes which of the following?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 30.139254808425903 + }, + { + "question": "Which of the following statements should be included in a practitioner’s report on the application of agreed-upon procedures?", + "model_answer": "B", + "correct_answer": 2, + "is_correct": false, + "response_time": 30.14009690284729 + }, + { + "question": "A $500 par-value convertible debenture is selling at $520. If the conversion ratio is 20, what is the conversion price?", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 30.14022994041443 + }, + { + "question": "Which of the following is an essential element of the audit trail in an electronic data interchange (EDI) system?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 30.140321731567383 + }, + { + "question": "A company has income after tax of $5.4 million, interest expense of $1 million for the year, depreciation expense of $1 million, and a 40% tax rate. What is the company’s times-interest-earned ratio?", + "model_answer": "C", + "correct_answer": 3, + "is_correct": false, + "response_time": 30.140408754348755 + }, + { + "question": "The essence of responsibility accounting is", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 30.140496969223022 + }, + { + "question": "Mast Co. converted from the FIFO method for inventory valuation to the LIFO method for financial statement and tax purposes. During a period of inflation would Mast's ending inventory and income tax payable using LIFO be higher or lower than FIFO? Ending inventory Income tax payable", + "model_answer": "C", + "correct_answer": 0, + "is_correct": false, + "response_time": 30.14058494567871 + }, + { + "question": "A company should recognize goodwill in its balance sheet at which of the following points?", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 30.140671968460083 + }, + { + "question": "An individual paid taxes 27 months ago, but did not file a tax return for that year. Now the individual wants to file a claim for refund of federal income taxes that were paid at that time. The individual must file the claim for refund within which of the following time periods after those taxes were paid?", + "model_answer": "C.", + "correct_answer": 1, + "is_correct": false, + "response_time": 30.1408748626709 + }, + { + "question": "Which of the following is an element of a CPA firm's quality control policies and procedures applicable to the firm's auditing practice?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 36.699954986572266 + }, + { + "question": "In year 6, an IRS agent completed an examination of a corporation’s year 5 tax return and proposed an adjustment that will result in an increase in taxable income for each of years 1 through year 5. All returns were filed on the original due date. The proposed adjustment relates to the disallowance of corporate jet usage for personal reasons. The agent does not find the error to be fraudulent or substantial in nature. Which of the following statements regarding this adjustment is correct?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 36.70009803771973 + }, + { + "question": "Hall Co. purchased a machine on January 1 at a cost of $140000. The machine had an estimated useful life of eight years and a salvage value of $60000. Hall chose to depreciate the machine using the double- declining balance method. What was the carrying amount of the machine in Hall's balance sheet at the end of its second year of operations?", + "model_answer": "D.", + "correct_answer": 2, + "is_correct": false, + "response_time": 36.700220346450806 + }, + { + "question": "Large City does not use the modified approach to account for roads. At the beginning of the current year the city spent $800000 on new roads. The roads have a 20-year useful life. What amount should Large City report as an expense related to the new roads in the statement of activities for the current year?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 36.70033526420593 + }, + { + "question": "Corbet Co. purchased a copyright near the beginning of the current year from an author for $20000. The legal life of the copyright is equivalent to the life of the author plus 50 years. Corbet expects to sell the book for five years. What amount should Corbet report as amortization expense related to the copyright at the end of the current year?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 36.70044708251953 + }, + { + "question": "The sole shareholder of an S corporation contributed equipment with a fair market value of $20,000 and a basis of $6,000 subject to $12,000 liability. What amount is the gain, if any, that the shareholder must recognize", + "model_answer": "C", + "correct_answer": 1, + "is_correct": false, + "response_time": 36.700557231903076 + }, + { + "question": "Carter Co. had the following items on its balance sheet at the end of the current year: Cash and cash equivalents $ 200000 Short-term investments 100000 Accounts receivable 400000 Inventories 600000 Patent‚Äì10 years 300000 Equipment 1000000 Accumulated depreciation 200000 The amount of current liabilities at the end of the current year was $640000. What is Carter's working capital at the end of the current year?", + "model_answer": "B.", + "correct_answer": 2, + "is_correct": false, + "response_time": 36.70066833496094 + }, + { + "question": "If a CPA recklessly departs from the standards of due care when conducting an audit the CPA will be liable to third parties who are unknown to the CPA under the law of", + "model_answer": "C.", + "correct_answer": 3, + "is_correct": false, + "response_time": 36.700780153274536 + }, + { + "question": "Given a 10% discount rate with cash inflows of $3,000 at the end of each year for five years and an initial investment of $11,000, what is the net present value?", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 36.70089292526245 + }, + { + "question": "Which of the following factors most likely would heighten an auditor's concern about the risk of fraudulent financial reporting?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 36.70100522041321 + }, + { + "question": "Which of the following techniques effectively measures improvements in product quality as a result of internal failure costs?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 33.70315599441528 + }, + { + "question": "A CPA prepares a client’s tax return containing business travel expenses without inquiring about the existence of documentation for the expenses. Which statement best describes the consequence of the CPA’s lack of inquiry?", + "model_answer": "A", + "correct_answer": 0, + "is_correct": true, + "response_time": 33.7036018371582 + }, + { + "question": "Which of the following is the proper treatment of the cost of equipment used in research and development activities that will have alternative future uses?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 33.70378804206848 + }, + { + "question": "King, Inc. owns 70% of Simmon Co’s outstanding common stock. King’s liabilities total $450,000, and Simmon’s liabilities total $200,000. Included in Simmon’s financial statements is a $100,000 note payable to King. What amount of total liabilities should be reported in the consolidated financial statements?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 33.70391082763672 + }, + { + "question": "Confirmation of accounts receivable that have been categorized initially by an auditor as ‚Äúexceptions‚Äù most likely could be due to", + "model_answer": "A.", + "correct_answer": 3, + "is_correct": false, + "response_time": 33.704030990600586 + }, + { + "question": "Accrual accounting involves accruals and deferrals. Which of the following best describes accruals and deferrals?", + "model_answer": "B.", + "correct_answer": 0, + "is_correct": false, + "response_time": 33.704219818115234 + }, + { + "question": "An accountant has been engaged to compile a nonissuer's financial statements that contain several misapplications of accounting principles and unreasonable accounting estimates. Management is unwilling to revise the financial statements and the accountant believes that modification of the standard compilation report is not adequate to communicate the deficiencies. Under these circumstances the accountant should", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 33.70435309410095 + }, + { + "question": "Which of the following cannot be amortized for tax purposes?", + "model_answer": "B.", + "correct_answer": 2, + "is_correct": false, + "response_time": 33.70447111129761 + }, + { + "question": "What is the process by which products and services of a business entity are measured and evaluated relative to the best possible levels of performance?", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 33.704586029052734 + }, + { + "question": "The expected selling price for a new product is $19.00. Management's goal is to obtain a 20% contribution margin on all sales. If the new product has variable selling and distribution costs of $3.00 per unit what is the product's target variable manufacturing cost?", + "model_answer": "B", + "correct_answer": 0, + "is_correct": false, + "response_time": 33.70470094680786 + }, + { + "question": "Mill Co. reported pretax income of $152500 for the year ended December 31. During the year-end audit the external auditors discovered the following errors: Ending inventory $30000 overstated Depreciation expense $64000 understated What amount should Mill report as the correct pretax income for the year ended December 31?", + "model_answer": "C.", + "correct_answer": 0, + "is_correct": false, + "response_time": 36.43860197067261 + }, + { + "question": "Which of the following defenses is likely to be successful in a suit alleging negligence by a CPA?", + "model_answer": "C.", + "correct_answer": 0, + "is_correct": false, + "response_time": 36.4389808177948 + }, + { + "question": "On May 1 of the prior year, Baker purchased equipment with a five-year useful life for a cost of $10,000. Baker adopted the MACRS depreciation system and did not utilize any special depreciation deductions. On March 1 of the current year, Baker sold the equipment. The MACRS depreciation schedule for five-year property is listed below:\nFirst year - 20.00%\nSecond year - 32.00%\nThird year - 19.20%\nWhat amount of depreciation can Baker deduct in the current year?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 36.439443826675415 + }, + { + "question": "An entity engaged an accountant to review its financial statements in accordance with Statements on Standards for Accounting and Review Services. The accountant determined that the entity maintained its accounts on a comprehensive basis of accounting other than generally accepted accounting principles (GAAP). In this situation, the accountant most likely would have taken which of the following actions?", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 36.440035820007324 + }, + { + "question": "The city of Cobb has two trust funds for the benefit of the city's library trust fund A and trust fund B. Only the earnings from trust fund A can be expended and both the principal and interest from trust fund B can be expended. How should the city of Cobb report each trust fund? Trust fund A Trust fund B", + "model_answer": "C", + "correct_answer": 1, + "is_correct": false, + "response_time": 36.44079875946045 + }, + { + "question": "A firm's inventory turnover (IT) is 5 times on a cost of goods sold (COGS) of $800,000. If the IT is improved to 8 times while the COGS remains the same, a substantial amount of funds is released from or additionally invested in inventory. In fact,", + "model_answer": "A", + "correct_answer": 3, + "is_correct": false, + "response_time": 36.44093990325928 + }, + { + "question": "Which of the following statements would most likely appear in an auditor's engagement letter?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 36.44105386734009 + }, + { + "question": "Which of the following factors most likely would cause a CPA not to accept a new audit engagement?", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 36.441168785095215 + }, + { + "question": "Which of the following pairs of elements must a client prove to hold an accountant liable for common law fraud?", + "model_answer": "D", + "correct_answer": 2, + "is_correct": false, + "response_time": 36.44128370285034 + }, + { + "question": "A corporate taxpayer plans to switch from the FIFO method to the LIFO method of valuing inventory. Which of the following statements is accurate regarding the use of the LIFO method?", + "model_answer": "C", + "correct_answer": 3, + "is_correct": false, + "response_time": 36.441396951675415 + }, + { + "question": "Lemon owned 2000 shares of Spectrol Corp. common stock that were purchased in year 1 at $10.50 per share. In year 4 Lemon received a 5% non-taxable dividend of Spectrol common stock. In year 5 the stock split 2-for-1. In the current year Lemon sold 800 shares. What is Lemon's basis in the 800 shares of stock sold?", + "model_answer": "B.", + "correct_answer": 0, + "is_correct": false, + "response_time": 34.10880732536316 + }, + { + "question": "Increasing the credit period from 30 to 60 days, in response to a similar action taken by all of our competitors, would likely result in:", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 34.10918402671814 + }, + { + "question": "Which of the following characteristics most likely would heighten an auditor's concern about the risk of material misstatements arising from fraudulent financial reporting?", + "model_answer": "B.", + "correct_answer": 0, + "is_correct": false, + "response_time": 34.10952115058899 + }, + { + "question": "An auditor is selecting prenumbered purchase orders for testing an entity's internal control activities related to their proper approval before office equipment is ordered. The auditor is matching random numbers with the purchase order numbers to determine which purchase orders to inspect. If a random number matches a voided purchase order the auditor ordinarily would replace the voided purchase order with another if the voided purchase order", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 34.109944105148315 + }, + { + "question": "An auditor of a nonissuer should design tests of details to ensure that sufficient audit evidence supports which of the following?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 34.110525131225586 + }, + { + "question": "Mill CPA was engaged by a group of royalty recipients to apply agreed-upon procedures to financial data supplied by Modern Co. regarding Modern's written assertion about its compliance with contractual requirements to pay royalties. Mill's report on these agreed-upon procedures should contain a(an)", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 34.110774993896484 + }, + { + "question": "Simmons gives her child a gift of publicly traded stock with a basis of $40,000 and a fair market value of $30,000. No gift tax is paid. The child subsequently sells the stock for $36,000. What is the child’s recognized gain or loss, if any?", + "model_answer": "C", + "correct_answer": 1, + "is_correct": false, + "response_time": 34.110894203186035 + }, + { + "question": "Goll Co. has a 25% interest in the common stock of Rose Co. and an 18% interest in the common stock of Jave Co. Neither investment gives Goll the ability to exercise significant influence over either company's operating and financial policies. Which of the two investments should Goll account for using the equity method?", + "model_answer": "A.", + "correct_answer": 3, + "is_correct": false, + "response_time": 34.11101531982422 + }, + { + "question": "What is the present value of $10 received in two years’ time if the discount rate is 9%?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 34.11112904548645 + }, + { + "question": "Which of the following circumstances generally will cause a discharge of contractual duties by operation of law?", + "model_answer": "D.", + "correct_answer": 3, + "is_correct": true, + "response_time": 34.111242055892944 + }, + { + "question": "In searching for unrecorded liabilities an auditor most likely would examine the", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 39.22560000419617 + }, + { + "question": "The capital structure of Merritt Co. is 20% common equity and debt equal to 80%. The cost of common equity is 10% and the pretax cost of debt is 5%. Merritt's tax rate is 21%. What is Merritt's weighted-average cost of capital?", + "model_answer": "C", + "correct_answer": 0, + "is_correct": false, + "response_time": 39.225714921951294 + }, + { + "question": "Greene is the sole shareholder of Seagull, a calendar-year S corporation. Greene's basis at the beginning of the year is $15,000. Seagull reported an ordinary loss of $5,000 and $2,000 of municipal bond interest for the year. Seagull distributed cash of $6,000 to Greene on November 1. What is Greene's basis in Seagull at the end of the year?", + "model_answer": "C.", + "correct_answer": 1, + "is_correct": false, + "response_time": 39.22580885887146 + }, + { + "question": "Holt Co. discovered that in the prior year it failed to report $40000 of depreciation related to a newly constructed building. The depreciation was computed correctly for tax purposes. The tax rate for the current year was 20%. How should Holt report the correction of error in the current year?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 39.22589898109436 + }, + { + "question": "Which of the following factors most likely would cause an accountant not to accept an engagement to compile the financial statements of a nonissuer?", + "model_answer": "C", + "correct_answer": 1, + "is_correct": false, + "response_time": 39.22599196434021 + }, + { + "question": "Which of the following transactions correctly illustrates the doctrine of substantial performance?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 39.2260799407959 + }, + { + "question": "In assessing the tolerable rate of deviations of a test of controls that was performed using statistical sampling an auditor should consider that", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 39.22616910934448 + }, + { + "question": "The covariance between Stock A and the market index is 88, while their standard deviations are respectively 19% and 14%. What is the beta of Stock A?", + "model_answer": "C", + "correct_answer": 3, + "is_correct": false, + "response_time": 39.226256132125854 + }, + { + "question": "Summer, a single individual, had a net operating loss of $20,000 three years ago. A Code Sec. 1244 stock loss made up three-fourths of that loss. Summer had no taxable income from that year until the current year. In the current year, Summer has gross income of $80,000 and sustains another loss of $50,000 on Code Sec. 1244 stock. Assuming that Summer can carry the entire $20,000 net operating loss to the current year, what is the amount and character of the Code Sec. 1244 loss that Summer can deduct for the current year?", + "model_answer": "B.", + "correct_answer": 2, + "is_correct": false, + "response_time": 39.22634291648865 + }, + { + "question": "Prior to the issuance of its December 31 financial statements Stark Co. was named as a defendant in a lawsuit arising from an event that occurred in October. Stark's legal counsel believes that it is reasonably possible that there will be an unfavorable outcome and that damages will range from $100000 to $150000. Which amount(s) should Stark accrue and/or disclose in its December 31 financial statements? Accrue contingent liability Disclose contingent liability", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 39.22643208503723 + }, + { + "question": "Best County's capital projects fund had the following receipts during the year: Transfer from the general fund $100000 Federal capital grant $75000 Special assessment for capital improvements $300000 What amount of revenues should Best County report in its capital projects fund at the end of the year?", + "model_answer": "D", + "correct_answer": 2, + "is_correct": false, + "response_time": 36.64695191383362 + }, + { + "question": "Prior to commencing the compilation of financial statements of a nonissuer, an accountant is required to", + "model_answer": "A", + "correct_answer": 3, + "is_correct": false, + "response_time": 36.64738416671753 + }, + { + "question": "An audit client has a valid reason for requesting that a certain account receivable that the auditor has selected for confirmation not be confirmed. Under these circumstances the auditor should", + "model_answer": "B", + "correct_answer": 0, + "is_correct": false, + "response_time": 36.64808011054993 + }, + { + "question": "Dari Inc. guaranteed the debt of a related party. In December Dari learned that it is probable it will be required to pay between $150000 and $200000 within the next six months in satisfaction of its guarantee but no amount within that range is more likely. What amount of contingent liability should Dari accrue in its December 31 balance sheet?", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 36.64824604988098 + }, + { + "question": "Which of the following decision-making techniques is most useful to a manager who is attempting to increase the profitability of an area, but who has a problem with limited capacity for operation of a critical machine?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 36.64837193489075 + }, + { + "question": "Markson Co. traded a concrete-mixing truck with a book value of $10,000 to Pro Co. for a cement-mixing machine with a fair value of $11,000. Markson needs to know the answer to which of the following questions in order to determine whether the exchange has commercial substance?", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 36.64848732948303 + }, + { + "question": "An analyst expects a company to pay a dividend of $5 with a dividend growth rate of 3%. The inflation rate is expected to fall from 5% per year to 3% per year. As a result of the change in the inflation premium, the company's", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 36.64860010147095 + }, + { + "question": "The standard deviations of Stocks A and B are respectively 6% and 18%. If their correlation is 0.2 and an equal weighted portfolio is formed, what is the standard deviation of such a portfolio?", + "model_answer": "C", + "correct_answer": 0, + "is_correct": false, + "response_time": 36.64878606796265 + }, + { + "question": "Mentor Co. a U.S. corporation owned 100% of a Swiss corporation. The Swiss franc is the functional currency. The remeasurement of Mentor's financial statements resulted in a $25000 gain at year end. The translation of the financial statements resulted in a $40000 gain at year end. What amount should Mentor recognize as foreign currency gain in its income statement?", + "model_answer": "C.", + "correct_answer": 1, + "is_correct": false, + "response_time": 36.64891600608826 + }, + { + "question": "A U.S. manufacturer has a production operation in Mexico. The product costs 116.50 pesos to produce and ship to Europe, where the product sells for 20 euros. If 0.1099 U.S. dollars are required to buy one Mexican peso, and 0.8928 U.S. dollars are required to buy one euro, what amount of U.S. dollars is the profit on the sale?", + "model_answer": "B", + "correct_answer": 0, + "is_correct": false, + "response_time": 36.64906406402588 + }, + { + "question": "Dodd Co.'s debt securities at December 31 included available-for-sale securities with a cost basis of $24000 and a fair value of $30000. Dodd's income tax rate was 20%. What amount of unrealized gain or loss should Dodd recognize in its income statement at December 31?", + "model_answer": "D", + "correct_answer": 1, + "is_correct": false, + "response_time": 34.89889478683472 + }, + { + "question": "Which of these is true of equity but not of bonds?", + "model_answer": "C.", + "correct_answer": 1, + "is_correct": false, + "response_time": 34.899019956588745 + }, + { + "question": "Suppose that the market price of Company X is $45 per share and that of Company Y is $30. If X offers three-fourths a share of common stock for each share of Y, the ratio of exchange of market prices would be:", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 34.89911508560181 + }, + { + "question": "Which of the following activities is not an element of a CPA firm's quality control system to be considered in establishing quality control policies and procedures?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 34.89920902252197 + }, + { + "question": "Strom acquired a 25% interest in Ace Partnership by contributing land having an adjusted basis of $16,000 and a fair market value of $50,000. The land was subject to a $24,000 mortgage, which was assumed by Ace. No other liabilities existed at the time of the contribution. What was Strom's basis in Ace?", + "model_answer": "B", + "correct_answer": 0, + "is_correct": false, + "response_time": 34.89929986000061 + }, + { + "question": "Subsequent to issuing a report on audited financial statements, a CPA discovers that the accounts receivable confirmation process omitted a number of accounts that are material, in the aggregate. Which of the following actions should the CPA take immediately?", + "model_answer": "A.", + "correct_answer": 2, + "is_correct": false, + "response_time": 34.89939212799072 + }, + { + "question": "A company sells DVD players for $200 per unit. The players have a unit variable cost of $160. The company estimates that it will sell one home entertainment system for every four DVD players sold. Home entertainment systems have a unit variable cost of $460 and sell for $600 per unit. The company's fixed costs are $90000. Assuming that the sales mix estimate is correct how many DVD players need to be sold for the company to break even?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 34.89948296546936 + }, + { + "question": "Felton Farm Supplies, Inc., has an 8 percent return on total assets of $300,000 and a net profit margin of 5 percent. What are its sales?", + "model_answer": "A.", + "correct_answer": 1, + "is_correct": false, + "response_time": 34.899574995040894 + }, + { + "question": "An entity prepares its financial statements on its income tax basis. The accompanying notes include a summary of significant accounting policies that discusses the basis of presentation and describes how that basis differs from GAAP. The dollar amount of the effects of the difference between the income tax basis and GAAP", + "model_answer": "B", + "correct_answer": 3, + "is_correct": false, + "response_time": 34.8996639251709 + }, + { + "question": "An auditor decides to use the blank form of positive accounts receivable confirmation. The auditor should be aware that the blank form may be ineffective because", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 34.8997540473938 + }, + { + "question": "Gamma Co. a manufacturer of medical products had a 10% return on assets and an asset turnover of 4:1. What was Gamma's profit margin on sales?", + "model_answer": "A", + "correct_answer": 3, + "is_correct": false, + "response_time": 37.735278844833374 + }, + { + "question": "A company whose stock is trading at $10 per share has 1,000 shares of $1 par common stock outstanding when the board of directors declares a 30% common stock dividend. Which of the following adjustments should be made when recording the stock dividend?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 37.73579692840576 + }, + { + "question": "An auditor is evaluating a client’s internal controls. Which of the following situations would be the most difficult internal control issue for an auditor to detect?", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 37.73615384101868 + }, + { + "question": "If a five-year bond has a yield of 6% and a ten-year bond has a yield of 5%, what is the yield curve likely to be?", + "model_answer": "A", + "correct_answer": 3, + "is_correct": false, + "response_time": 37.73649597167969 + }, + { + "question": "Which of the following, discovered during an audit, most likely would raise a question concerning possible illegal acts?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 37.73682904243469 + }, + { + "question": "Under state law Boca Co. may reimburse the state directly for actual unemployment claims or it may pay 3% of eligible gross wages. Boca believes that actual unemployment claims will be 2% of eligible gross wages and has chosen to reimburse the state. Eligible gross wages are defined as the first $15000 of gross wages paid to each employee. Boca had four employees each of whom earned $20000 during the year. What amount should Boca report as accrued liability for unemployment claims in its year-end balance sheet?", + "model_answer": "B.", + "correct_answer": 0, + "is_correct": false, + "response_time": 37.737159967422485 + }, + { + "question": "Which of the following procedures would an auditor most likely complete to test the existence assertion of property, plant and equipment?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 37.73756504058838 + }, + { + "question": "An auditor may provide an issuer client any of the following nonaudit services without impairing independence and without obtaining the preapproval of the audit committee, except", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 37.73770880699158 + }, + { + "question": "Which of the following applies to an accountant conducting a review of interim financial information?", + "model_answer": "A.", + "correct_answer": 2, + "is_correct": false, + "response_time": 37.73782777786255 + }, + { + "question": "Parent gave securities with an adjusted basis of $10000 and fair market value of $9000 to a child. Later the child sold the securities for $7000. What is the child's basis for the securities sold?", + "model_answer": "A.", + "correct_answer": 1, + "is_correct": false, + "response_time": 37.73794198036194 + }, + { + "question": "A CPA was engaged to calculate the rate of return on a specified investment according to an agreedupon formula and verify that the resultant percentage agrees to the percentage in an identified schedule. The CPA's report on these agreed-upon procedures should contain", + "model_answer": "D", + "correct_answer": 2, + "is_correct": false, + "response_time": 36.286282777786255 + }, + { + "question": "When comparing investment projects:", + "model_answer": "A", + "correct_answer": 2, + "is_correct": false, + "response_time": 36.28643870353699 + }, + { + "question": "According to rules issued under the Sarbanes-Oxley Act which of the following nonaudit services is an accounting firm permitted to provide for an issuer audit client without impairing the accounting firm's independence?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 36.28655672073364 + }, + { + "question": "Match Co. manufactures a product with the following costs per unit based on a maximum plant capacity of 400000 units per year: Direct materials $ 60 Direct labor 10 Variable overhead 40 Fixed overhead 30 Total $140 Match has a ready market for all 400000 units at a selling price of $200 each. Selling costs in this market consist of $10 per unit shipping and a fixed licensing fee of $50000 per year. Reno Co. wishes to buy 5000 of these units on a special order. There would be no shipping costs on this special order. What is the lowest price per unit at which Match should be willing to sell the 5000 units to Reno?", + "model_answer": "A", + "correct_answer": 2, + "is_correct": false, + "response_time": 36.28667163848877 + }, + { + "question": "Pine Co. purchased land for $450000 as a factory site. An existing building on the site was razed before construction began. Additional information is as follows: Cost of razing old building $60000 Title insurance and legal fees to purchase land $30000 Architect's fees $95000 New building construction cost $1850000 What amount should Pine capitalize as the cost of the completed factory building?", + "model_answer": "D", + "correct_answer": 2, + "is_correct": false, + "response_time": 36.28678584098816 + }, + { + "question": "A company has a parcel of land to be used for a future production facility. The company applies the revaluation model under IFRS to this class of assets. In year 1, the company acquired the land for $100,000. At the end of year 1, the carrying amount was reduced to $90,000, which represented the fair value at that date. At the end of year 2, the land was revalued, and the fair value increased to $105,000. How should the company account for the year 2 change in fair value?", + "model_answer": "B.", + "correct_answer": 3, + "is_correct": false, + "response_time": 36.28689670562744 + }, + { + "question": "A 20% target contribution margin is set for Duct which is a new product with the following unit costs: Manufacturing costs Variable $12 Fixed 8 Selling & admin. Costs Variable $3 Fixed 5 What is Duct's target selling price?", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 36.28701090812683 + }, + { + "question": "A company last paid a dividend of $3. If the expected return on its equity is estimated at 12% and its shares are currently quoted on London Stock Exchange at $75, what should the dividend growth rate be to ensure that the price is consistent with the pricing of a growing perpetuity?", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 36.28712272644043 + }, + { + "question": "Financial statements prepared by a voluntary health and welfare nongovernmental not-for-profit organization must report expenses by the following classification(s): Functional Natural", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 36.287235736846924 + }, + { + "question": "For an individual business owner, which of the following would typically be classified as a capital asset for federal income tax purposes?", + "model_answer": "C", + "correct_answer": 1, + "is_correct": false, + "response_time": 36.287348985672 + }, + { + "question": "According to COSO, which of the following is the most effective method to transmit a message of ethical behavior throughout an organization?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 35.96490406990051 + }, + { + "question": "Bailey Co. changed the accounting for insurance expense from the cash basis to the accrual basis in the current year. In January of the prior year Bailey recorded insurance expense of $240000 for the cash purchase of a four-year insurance policy. How should Bailey report the insurance transaction in the current year's financial statements?", + "model_answer": "D", + "correct_answer": 2, + "is_correct": false, + "response_time": 35.96555709838867 + }, + { + "question": "A company is considering a move to a Software-as-a-Service (SaaS) offering instead of a traditional in-house application. Which of the following concerns is unique to SaaS?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 35.96590495109558 + }, + { + "question": "Which of the following situations would not impair objectivity, integrity, or independence with respect to an audit client?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 35.966243267059326 + }, + { + "question": "Which of the following procedures should a user auditor include in the audit plan to create that most efficient audit when an audit client uses a service organization for several processes?", + "model_answer": "C.", + "correct_answer": 0, + "is_correct": false, + "response_time": 35.96676206588745 + }, + { + "question": "In the current year Vinton exchanged unimproved land for an apartment building. The land had a basis of $300000 and a fair market value (FMV) of $420000 and was encumbered by a $100000 mortgage. The apartment building had an FMV of $550000 and was encumbered by a $230000 mortgage. Each party assumed the other's mortgage. What is Vinton's basis in the office building?", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 35.96688222885132 + }, + { + "question": "When the operating effectiveness of a control is not evidenced by written documentation, an auditor should obtain evidence about the control’s effectiveness by", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 35.9669771194458 + }, + { + "question": "Lake Trust a simple trust reported the following items of income and expense during the year: Dividend income $2500 Taxable interest income 2000 Capital gains (allocable to corpus) 5000 Accounting fees (allocable to income) (500) Trustee fees (allocable to income) (750) What is Lake's distributable net income?", + "model_answer": "D.", + "correct_answer": 3, + "is_correct": true, + "response_time": 35.96707201004028 + }, + { + "question": "An auditor of a nonissuer may not issue a qualified opinion when", + "model_answer": "A", + "correct_answer": 0, + "is_correct": true, + "response_time": 35.967164039611816 + }, + { + "question": "Which of the following factors most likely would be considered an inherent limitation to an entity's internal control?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 35.96725511550903 + }, + { + "question": "The Houser Company has negotiated a $500,000 revolving credit agreement with Chitwood National Bank. The agreement calls for an interest rate of 10% on fund used, a 15% compensating balance, and a commitment fee of 1% on the unused amount of the credit line. Assuming that the compensating balance would not otherwise be maintained, the effective annual interest cost if the firm borrows $200,000 for one year is closest to", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 34.63799285888672 + }, + { + "question": "Bale Co. incurred $100,000 of acquisition costs related to the purchase of the net assets of Dixon Co. The $100,000 should be", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 34.63814306259155 + }, + { + "question": "Smith Legal Services has offered to represent a plaintiff in a lawsuit for a retainer of $20000 plus 40% of any award over $20000. Smith expects to incur out-of-pocket expenditures of $15000 in litigating the suit. Possible court awards with their associated probabilities are: Award Probability $100000 0.7 $0 0.3 What is the expected value to Smith of the lawsuit?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 34.63826394081116 + }, + { + "question": "A bond with a five-year maturity, paying 8% coupons and with a face value of $100, is bought at 104.1 in year 0, when it is issued. If I need to sell the bond at the the end the third year, when its prevailing price is 82, what is my holding period return on this investment? (Assume coupons are not reinvested.) HINT: Accumulate all coupons.", + "model_answer": "C", + "correct_answer": 3, + "is_correct": false, + "response_time": 34.63837790489197 + }, + { + "question": "What is the value of the tax shield if the value of the firm is $5 million, its value if unlevered would be $4.78 million, and the present value of bankruptcy and agency costs is $360,000?", + "model_answer": "B", + "correct_answer": 3, + "is_correct": false, + "response_time": 34.63849115371704 + }, + { + "question": "A CPA prepares income tax returns for a client. After the client signs and mails the returns, the CPA discovers an error. According to Treasury Circular 230, the CPA must", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 34.63860607147217 + }, + { + "question": "An auditor is using statistical sampling in testing whether cash disbursements were properly authorized. The sample results indicate that the sample rate of deviation plus the allowance for sampling risk exceeds the tolerable rate. Under these circumstances the auditor most likely would reduce the", + "model_answer": "C", + "correct_answer": 0, + "is_correct": false, + "response_time": 34.63880395889282 + }, + { + "question": "When assessing an internal auditor's objectivity an independent auditor should", + "model_answer": "C", + "correct_answer": 3, + "is_correct": false, + "response_time": 34.638943910598755 + }, + { + "question": "In the statement of activities for a governmental entity revenues such as charges for building permits garbage collection and dog licenses are reported as which of the following?", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 34.639060974121094 + }, + { + "question": "How would the following ratios or measures be affected if a company issued additional capital stock for cash? Total debt to total assets Working capital", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 34.63917517662048 + }, + { + "question": "Which of the following statements is the most significant characteristic in determining the classification of an enterprise fund?", + "model_answer": "A", + "correct_answer": 1, + "is_correct": false, + "response_time": 36.74684500694275 + }, + { + "question": "Rune Co.'s checkbook balance on December 31 was $10000. On that date Rune held the following items in its safe: $4000 check payable to Rune postdated January 3 and not included in the December 31 checkbook balance in collection of a sale made in December. $1000 check payable to Rune deposited December 15 and included in the December 31 checkbook balance but returned by the bank on December 30 stamped \"NSF\". The check was redeposited on January 2 and cleared on January 9. What amount should Rune report as cash in its December 31 balance sheet?", + "model_answer": "B", + "correct_answer": 0, + "is_correct": false, + "response_time": 36.747451066970825 + }, + { + "question": "Which of the following procedures would an auditor most likely perform to obtain evidence about the occurrence of subsequent events?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 36.747791051864624 + }, + { + "question": "The following information pertains to Baxter Co: Inventory at beginning of year $200000 Inventory at year end $300000 Cost of goods sold during the year $500000 What was Baxter's inventory turnover for the year?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 36.74815797805786 + }, + { + "question": "In planning an audit, the auditor's knowledge about the design of relevant internal control activities should be used to", + "model_answer": "D", + "correct_answer": 0, + "is_correct": false, + "response_time": 36.74849605560303 + }, + { + "question": "Prime Corp. is an accrual-basis calendar-year C corporation. Its current-year reported book income before federal income taxes was $300000 which included $17000 corporate bond interest income. A $20000 expense for term life insurance premiums on corporate officers was incurred. Prime was the policy owner and beneficiary. What was Prime's current-year taxable income as reconciled on Prime's Schedule M-1 Reconciliation of Income (Loss) per Books With Income per Return of Form 1120 U.S. Corporation Income Tax Return?", + "model_answer": "C.", + "correct_answer": 0, + "is_correct": false, + "response_time": 36.74882912635803 + }, + { + "question": "If the correlation between Securities A and B is −0.20, and their respective standard deviations are 8% and 18%, what is the standard deviation of a portfolio with one quarter invested in A and three quarters invested in B?", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 36.7491660118103 + }, + { + "question": "During the current year Cooley Co. had an unrealized gain of $100000 on a debt investment classified as available-for-sale. Cooley's corporate tax rate is 25%. What amount of the gain should be included in Cooley's net income and other comprehensive income at the end of the current year? Net income Other comprehensive income", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 36.749526023864746 + }, + { + "question": "You are told an investment will generate income that grows at 5% p.a. forever when the market discount rate is 15%. If the investment’s next payout is $10, what is the value of the investment?", + "model_answer": "B", + "correct_answer": 2, + "is_correct": false, + "response_time": 36.749638080596924 + }, + { + "question": "Which of the following matters is included in a typical comfort letter?", + "model_answer": "C", + "correct_answer": 0, + "is_correct": false, + "response_time": 36.749736070632935 + }, + { + "question": "Which of the following characteristics most likely would heighten an auditor's concern about the risk of material misstatements arising from fraudulent financial reporting?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 34.71812105178833 + }, + { + "question": "The primary purpose of a not-for-profit organization's statement of activities is to provide relevant information to its", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 34.71853590011597 + }, + { + "question": "Kanji Company had sales last year of $265 million, including cash sales of $25 million. If its average collection period was 36 days, its ending accounts receivable balance is closest to . (Assume a 365-day year.)", + "model_answer": "A", + "correct_answer": 1, + "is_correct": false, + "response_time": 34.718904972076416 + }, + { + "question": "Palmyra Co. has net income of $11,000, a positive $1,000 net cumulative effect of a change in accounting principle, a $3,000 unrealized loss on available-for-sale securities, a positive $2,000 foreign currency translation adjustment, and a $6,000 increase in its common stock. What amount is Palmyra’s comprehensive income?", + "model_answer": "D", + "correct_answer": 1, + "is_correct": false, + "response_time": 34.719242095947266 + }, + { + "question": "On October 31, year 1, a company with a calendar year-end paid $90,000 for services that will be performed evenly over a sixmonth period from November 1, year 1, through April 30, year 2. The company expensed the $90,000 cash payment in October, year 1, to its services expense general ledger account. The company did not record any additional journal entries in year 1 related to the payment. What is the adjusting journal entry that the company should record to properly report the prepayment in its year 1 financial statements?", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 34.71958613395691 + }, + { + "question": "Which of the following should a practitioner perform as part of an engagement for agreed-upon procedures in accordance with Statements on Standards for Attestation Engagements?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 34.71992611885071 + }, + { + "question": "Which of the following types of information would be included in total net assets in the statement of financial position for a nongovernmental not-for-profit organization?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 34.720261096954346 + }, + { + "question": "According to the Bond Equivalent Yield (BEY) method, the yield on a $1,000, 13-week US Treasury bill purchased for $960 would be closest to .", + "model_answer": "C", + "correct_answer": 1, + "is_correct": false, + "response_time": 34.72059488296509 + }, + { + "question": "Joe is the trustee of a trust set up for his father. Under the Internal Revenue Code, when Joe prepares the annual trust tax return, Form 1041, he", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 34.720975160598755 + }, + { + "question": "A nongovernmental, not-for-profit organization held the following investments:\nInvestment Cost, Fair value (beginning of year), Fair value (end of year)\nStock A (100 shares), $50 per share, $45, $51\nStock B (200 shares), $40 per share, $41, $49\nWhat amount of stock investments should be reported in the year-end statement of financial position?", + "model_answer": "C", + "correct_answer": 3, + "is_correct": false, + "response_time": 34.7211229801178 + }, + { + "question": "Strut Co. has a payable to its parent Plane Co. In which of the following balance sheets should this payable be reported separately? Strut's Plane's consolidated balance sheet balance sheet", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 35.563867807388306 + }, + { + "question": "An entity prepares its financial statements on the income tax basis. A description of how that basis differs from GAAP should be included in the", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 35.56445574760437 + }, + { + "question": "Lind Co.'s salaries expense of $10,000 is paid every other Friday for the 10 workdays then ending. Lind's employees do not work on Saturdays and Sundays. The last payroll was paid on June 18. On Wednesday, June 30, the month-end balance in the salaries expense account before accruals was $14,000. What amount should Lind report as salaries expense in its income statement for the month ended June 30?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 35.5648558139801 + }, + { + "question": "Which of the following statements is correct as it relates to changes in accounting estimates?", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 35.56526470184326 + }, + { + "question": "A partner in a general partnership is usually not entitled to which of the following?", + "model_answer": "C.", + "correct_answer": 3, + "is_correct": false, + "response_time": 35.5654079914093 + }, + { + "question": "Which of the following matters does an auditor usually include in the engagement letter?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 35.56552290916443 + }, + { + "question": "In the financial statements of employee benefit pension plans and trusts, the plan investments are reported at", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 35.56563377380371 + }, + { + "question": "An accountant compiles the financial statements of a nonissuer and issues the standard compilation report. Although not specifically stated in this report, it is implied that", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 35.56574487686157 + }, + { + "question": "Plaid Pants, Inc. common stock has a beta of 0.90, while Acme Dynamite Company common stock has a beta of 1.80. The expected return on the market is 10 percent, and the risk-free rate is 6 percent. According to the capital-asset pricing model (CAPM) and making use of the information above, the required return on Plaid Pants' common stock should be , and the required return on Acme's common stock should be .", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 35.56585764884949 + }, + { + "question": "A company invested in a new machine that will generate revenues of $35,000 annually for seven years. The company will have annual operating expenses of $7,000 on the new machine. Depreciation expense, included in the operating expenses, is $4,000 per year. The expected payback period for the new machine is 5.2 years. What amount did the company pay for the new machine?", + "model_answer": "B.", + "correct_answer": 2, + "is_correct": false, + "response_time": 35.56596875190735 + }, + { + "question": "Which of the following items is not subject to the application of intraperiod income tax allocation?", + "model_answer": "A.", + "correct_answer": 3, + "is_correct": false, + "response_time": 39.38127684593201 + }, + { + "question": "Skytop Co. a nonprofit entity is considering acquiring a machine for $80000 that will produce uniform cash inflows of $25000 for four years. Skytop evaluates capital projects using discounted cash flows at a cost of capital of 10% per year. Based upon the following table what action should Skytop take regarding acquisition of the machine and why? Future value of $1 for 4 years at 10% $1.464 Present value of $1 for 4 years at 10% $0.683 Future value of $1 ordinary annuity for 4 years at 10% $4.641 Present value of $1 ordinary annuity for 4 years at 10% $3.170 Acquire: Reason:", + "model_answer": "C", + "correct_answer": 2, + "is_correct": true, + "response_time": 39.381420612335205 + }, + { + "question": "In return for a 20% partnership interest, Skinner contributed $5,000 cash and land with a $12,000 basis and a $20,000 fair market value to the partnership. The land was subject to a $10,000 mortgage that the partnership assumed. In addition, the partnership had $20,000 in recourse liabilities that would be shared by partners according to their partnership interests. What amount represents Skinner’s basis in the partnership interest?", + "model_answer": "B.", + "correct_answer": 3, + "is_correct": false, + "response_time": 39.38154172897339 + }, + { + "question": "A shoe retailer allows customers to return shoes within 90 days of purchase. The company estimates that 5% of sales will be returned within the 90-day period. During the month, the company has sales of $200,000 and returns of sales made in prior months of $5,000. What amount should the company record as net sales revenue for new sales made during the month?", + "model_answer": "B.", + "correct_answer": 1, + "is_correct": true, + "response_time": 39.38166069984436 + }, + { + "question": "Stone Co. had the following consignment transactions during December year 1: Inventory shipped on consignment to Omega Co. $36000 Freight paid by Stone $1800 Inventory received on consignment from Gamma Co. $24000 Freight paid by Gamma $1000 No sales of consigned goods were made through December 31 year 1. What amount of consigned inventory should be included in Stone's December 31 year 1 balance sheet?", + "model_answer": "D", + "correct_answer": 3, + "is_correct": true, + "response_time": 39.3817777633667 + }, + { + "question": "Dawn Corp. uses a standard cost system. During the year both the labor rate variance and the labor efficiency variance were unfavorable. Dawn wrote the variances off directly to cost of goods sold. If Dawn had allocated the variances to work in process finished goods and cost of goods sold instead what would have been the effects on current ratio and net income? Current Net ratio income", + "model_answer": "D", + "correct_answer": 0, + "is_correct": false, + "response_time": 39.381892681121826 + }, + { + "question": "While performing certain nonaudit services for an insurance company, a professional accountant is asked to recommend the appropriate accounting treatment for a weather hedge transaction. The accountant has worked with financial hedges but has no experience with weather hedges. Which of the following actions by the accountant would be in compliance with the IFAC Code of Ethics for Professional Accountants?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 39.3820059299469 + }, + { + "question": "Rigg Steele and Urco Corps. all accrual-basis calendar-year C corporations have only voting common stock outstanding. Rigg owns 85 percent of Steele and 40 percent of Urco. Steele owns 50 percent of Urco. Which group of corporations qualifies as an affiliated group and may join in the filing of a consolidated federal income tax return?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 39.382115602493286 + }, + { + "question": "A CPA has been requested by a former audit client to reissue the auditor's report for the prior period. Before reissuing the report, the CPA should", + "model_answer": "A", + "correct_answer": 0, + "is_correct": true, + "response_time": 39.38222575187683 + }, + { + "question": "A government entity is required to include a statement of cash flows in which of the following financial statements?", + "model_answer": "C.", + "correct_answer": 2, + "is_correct": true, + "response_time": 39.38233494758606 + }, + { + "question": "In which of the following situations would there be inelastic demand?", + "model_answer": "A.", + "correct_answer": 0, + "is_correct": true, + "response_time": 5.980831146240234 + }, + { + "question": "Bay Co. incurred legal fees in defending its patent rights. These legal fees should be capitalized when the outcome of the litigation is Successful Unsuccessful", + "model_answer": "B", + "correct_answer": 1, + "is_correct": true, + "response_time": 5.981260776519775 + } + ] +} \ No newline at end of file