ETH 557 Final Exam

ETH 557 Final Exam

1. In 2003, FASB and
IASB met and established four criteria for establishing revenue recognition. To
recognize revenue, which of the following conditions must be present?

2. Failure to provide
any care in fulfilling a duty owed to another is called

3. Which of the
following is a fundamental characteristic of the market system?

4. The income effect
indicates that

5. The price elasticity
of demand coefficient measures

6. A normative statement
is one that

7. Many conflicts of
interest in business contracts can be remedied ethically by which of the
following?

8. Four professional
general standards and responsibilities for Certified Public Accountants are
quality control and assurance, professional judgment, competence, and:

9. In 2002, Adelphia
Cable filed bankruptcy when it was discovered that

10. When budgets are
used to measure performance, there is a danger that budgetary slack may occur.
This happens when

11. ABC Company owes XYZ
Enterprises $1 million for goods purchased from XYZ over a year ago. XYZ
Enterprises continues to list the $1 million in their accounts receivable
balance and does not record any allowance for doubtful accounts. XYZ
Enterprises is failing to follow

12) The EU Privacy
Directive presents problems for the United States in that

13) When revenue is
recognized and shipment has not been made and the criteria for recognizing
revenue on bill-and-hold transactions set out in SEC Staff Accounting Bulletin
No. 101 have not been met, this is known as

14. According to the
Agency Theory, in a corporation there are two types of information consumers
known as

15. Tom Donaldson and
Tom Dunfee are proponents of ethical guidelines related to technology that are
based on differentiating hypernorms from nonhypernorms. This theory is known as

16. When the economist
says that economic wants are insatiable, this means that

17. The pursuit of
self-interest

18) The bankruptcy of
WorldCom in 2002 was due to the company’s actions in

19) Productive
efficiency refers to

20. Agency costs arise
when agents fail to act in the best interests of the principals. One example of
losses from poor decisions would be

21) If the price of
normal good X rises, the income

22) Section 55 of the
Principles of Professional Conduct of the AICPA states that

23) The concept of
economic efficiency is primarily concerned with

24. Which of the
following is a normative statement?

25. Suppose that as the
price of Y falls from $2.00 to $1.90 the quantity of Y demanded increases from
110 to 118. Then, the price elasticity of demand is

26) Other things equal,
an excise tax on a product will

27) If a conflict of
interest arises prior to entering into a business contract, the parties should

28) Assuming an economy
has fixed quantities of resources, that economy

29) When evaluating the
performance of managers in investment centers, performance metrics should be
based on

30. When applying for a
bank loan or trade credit, one way a company can appear to be in a healthier
financial position would be to