Forensic Accounting Test Questions
Course Introduction
Forensic Accounting is a specialized field that blends accounting, auditing, and investigative skills to examine financial records and uncover fraud, embezzlement, and other financial crimes. This course covers methodologies for detecting and preventing white-collar crimes, analyzing financial data for legal proceedings, and understanding the legal framework governing forensic investigations. Students will learn how to collect and preserve evidence, write expert reports, and provide testimony in court. Through practical case studies and ethical considerations, the course prepares participants to apply forensic accounting techniques in various professional settings, including litigation support, criminal investigations, and corporate governance.
Recommended Textbook
Fundamentals of Advanced Accounting 6th Edition by Hoyle
Available Study Resources on Quizplus
12 Chapters
1199 Verified Questions
1199 Flashcards
Source URL: https://quizplus.com/study-set/2808 Page 2
Chapter 1: The Equity Method of Accounting for Investments
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/55927
Sample Questions
Q1) Dodge, Incorporated acquires 15% of Gates Corporation on January 1, 2013, for $105,000 when the book value of Gates was $600,000. During 2013 Gates reported net income of $150,000 and paid dividends of $50,000. On January 1, 2014, Dodge purchased an additional 25% of Gates for $200,000. Any excess cost over book value is attributable to goodwill with an indefinite life. The fair-value method was used during 2013 but Dodge has deemed it necessary to change to the equity method after the second purchase. During 2014 Gates reported net income of $200,000 and reported dividends of $75,000. The income reported by Dodge for 2013 with regard to the Gates investment is A)$7,500.
B)$22,500.
C)$15,000.
D)$100,000.
E)$150,000.
Answer: A
Q2) When should an investor not use the equity method for an investment of 21% in another corporation?
Answer: When the investor does not have significant influence with regard to the investee.
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Consolidation of Financial Information
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/55926
Sample Questions
Q1) Which of the following statements is true regarding a statutory merger?
A)The original companies dissolve while remaining as separate divisions of a newly created company.
B)Both companies remain in existence as legal corporations with one corporation now a subsidiary of the acquiring company.
C)The acquired company dissolves as a separate corporation and becomes a division of the acquiring company.
D)The acquiring company acquires the stock of the acquired company as an investment.
E)A statutory merger is no longer a legal option.
Answer: C
Q2) Which of the following is a not a reason for a business combination to take place?
A)Cost savings through elimination of duplicate facilities.
B)Quick entry for new and existing products into domestic and foreign markets.
C)Diversification of business risk.
D)Vertical integration.
E)Increase in stock price of the acquired company.
Answer: E
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Consolidations-Subsequent to the Date of Acquisition
Available Study Resources on Quizplus for this Chatper
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/55925
Sample Questions
Q1) Dutch Co. has loaned $90,000 to its subsidiary, Hans Corp., which retains separate incorporation. How would this loan be treated on a consolidated balance sheet?
Answer: The loan represents an intra-entity payable for Hans and receivable for Dutch, and each receivable and payable would be eliminated in preparing a consolidated balance sheet.
Q2) When is a goodwill impairment loss recognized?
A)Only after both a quantitative and qualitative assessment of the fair value of goodwill of a reporting unit.
B)After only definitive quantitative assessments of the fair value of goodwill is completed.
C)After only definitive qualitative assessments of the fair value of goodwill is completed. D)If the fair value of a reporting unit falls to zero or below its original acquisition price. E)Never.
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
5
Chapter 4: Consolidated Financial Statements and Outside Ownership
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/55924
Sample Questions
Q1) Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2014. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Demers earns income and pays dividends as follows: \(\begin{array}{lrrr}&2014&2015&2016\\
\text { Net income } & \$ 100,000 & \$ 120,000 & \$ 130,000 \\
\text { Dividends } & 40,000 & 50,000 & 60,000
\end{array}\) Assume the PARTIAL EQUITY method is applied. Compute Pell's investment in Demers at December 31, 2016.
A)$780,000.
B)$660,000.
C)$785,000.
D)$676,000.
E)$620,000.
Q2) One company buys a controlling interest in another company on April 1. How should the preacquisition subsidiary revenues and expenses be handled in the consolidated balances for the year of acquisition?
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Consolidated Financial Statementsintra-Entity
Asset Transactions
Available Study Resources on Quizplus for this Chatper
126 Verified Questions
126 Flashcards
Source URL: https://quizplus.com/quiz/55923
Sample Questions
Q1) On January 1, 2013, Payton Co. sold equipment to its subsidiary, Starker Corp., for $115,000. The equipment had cost $125,000, and the balance in accumulated depreciation was $45,000. The equipment had an estimated remaining useful life of eight years and $0 salvage value. Both companies use straight-line depreciation. On their separate 2013 income statements, Payton and Starker reported depreciation expense of $84,000 and $60,000, respectively. The amount of depreciation expense on the consolidated income statement for 2013 would have been
A)$144,000.
B)$148,375.
C)$109,000.
D)$134,000.
E)$139,625.
Q2) What is the purpose of the adjustments to depreciation expense within the consolidation process when there has been an intra-entity transfer of a depreciable asset?
Q3) On April 7, 2013, Pate Corp. sold land to Shannahan Co., its subsidiary. From a consolidated point of view, when will the gain on this transfer actually be earned?
Q4) How is the gain on an intra-entity transfer of a depreciable asset realized?
Q5) When is the gain on an intra-entity transfer of land realized?
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Variable Interest Entities, Intra-Entity Debt,
Consolidated Cash Flows, and Other Issues
Available Study Resources on Quizplus for this Chatper
115 Verified Questions
115 Flashcards
Source URL: https://quizplus.com/quiz/55922
Sample Questions
Q1) A company had common stock with a total par value of $18,000,000 and fair value of $62,000,000; and 7% preferred stock with a total par value of $6,000,000 and a fair value of $8,000,000. The book value of the company was $85,000,000. If 90% of this company's total equity was acquired by another, what portion of the value would be assigned to the non-controlling interest?
A)$8,500,000.
B)$7,000,000.
C)$6,200,000.
D)$2,400,000.
E)$6,929,400.
Q2) On January 1, 2013, Riley Corp. acquired some of the outstanding bonds of one of its subsidiaries. The bonds had a carrying value of $421,620, and Riley paid $401,937 for them. How should you account for the difference between the carrying value and the purchase price in the consolidated financial statements for 2013?
A)The difference is added to the carrying value of the debt.
B)The difference is deducted from the carrying value of the debt.
C)The difference is treated as a loss from the extinguishment of the debt.
D)The difference is treated as a gain from the extinguishment of the debt.
E)The difference does not influence the consolidated financial statements.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Foreign Currency Transactions and Hedging
Foreign Exchange Risk
Available Study Resources on Quizplus for this Chatper
92 Verified Questions
92 Flashcards
Source URL: https://quizplus.com/quiz/55921
Sample Questions
Q1) Gaw Produce Company purchased inventory from a Japanese company on December 18, 2013. Payment of 4,000,000 yen (×) was due on January 18, 2014. Exchange rates between the dollar and the yen were as follows: \(\begin{array}{ll}
\text { Date } & \begin{array}{c}
\text { Exchange } \\
\text { Rate }
\end{array} \\
18,2013& ¥ 1=\$ .0080 \\
\text { December } 31,2013 & ¥ 1=\$ .0082 \\
\text { January } 18,2014 & ¥ 1=\$ .0083
\end{array}\) Required:
Prepare all journal entries for Gaw Produce Co. in connection with the purchase and payment.
Q2) What is the purpose of a hedge of foreign exchange risk?
Q3) What happens when a U.S. company purchases goods denominated in a foreign currency and the foreign currency appreciates?
Q4) What happens when a U.S. company sells goods denominated in a foreign currency and the foreign currency appreciates?
Q5) How is the fair value of a Forward Contract determined by U.S. GAAP?
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Translation of Foreign Currency Financial Statements
Available Study Resources on Quizplus for this Chatper
96 Verified Questions
96 Flashcards
Source URL: https://quizplus.com/quiz/55920
Sample Questions
Q1) Westmore Ltd., is a British subsidiary of a U.S. company. Westmore's functional currency is the pound sterling (£). The following exchange rates were in effect during 2013: \(\begin{array}{ll}
\text { Jan. } 1 & £ 1=\$ 1.60 \\
\text { June } 30 & £ 1=\$ 1.64 \\
\text { Dec. 31 } & £ 1=\$ 1.61 \\
\text { Weighted average rate for the year } & £ 1=\$ 1.59 \end{array}\) On December 31, 2013, Westmore had accounts receivable of £280,000. What amount (rounded) would have been included for this subsidiary in calculating consolidated accounts receivable?
A)$173,913.
B)$176,100.
C)$445,200.
D)$448,000.
E)$450,800.
Q2) What is the justification for the remeasurement of foreign currency transactions?
Q3) Under what circumstances would the remeasurement of a foreign subsidiary's financial statements be required?
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Partnerships: Formation and Operation
Available Study Resources on Quizplus for this Chatper
88 Verified Questions
88 Flashcards
Source URL: https://quizplus.com/quiz/55919
Sample Questions
Q1) James, Keller, and Rivers have the following capital balances; $48,000, $70,000 and $90,000 respectively. Because of a cash shortage James invests an additional $12,000 on June 1<sup>st</sup>. Each partner withdraws $1,000 per month. James, Keller, and Rivers receive a salary of $13,000, $15,000 and $20,000, respectively, for work done during the year. Each partner receives interest of 8% on their weighted average capital balance without regard to normal drawings. Any remaining profits are split 20%, 30%, and 50% respectively. The net income for the year is $30,000. What are the ending capital balances for each partner?
Q2) Peter, Roberts, and Dana have the following capital balances; $80,000, $100,000 and $60,000, respectively. The partners share profits and losses 20%, 40%, and 40% respectively. What is the total partnership capital after Roberts retires receiving $160,000 and using the goodwill method?
A)$290,000.
B)$176,000.
C)$80,000.
D)$120,000.
E)$230,000.
Q3) What events cause the dissolution of a partnership?
Q4) For what events or conditions should the Articles of Partnership make provision?
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Partnerships: Termination and Liquidation
Available Study Resources on Quizplus for this Chatper
73 Verified Questions
73 Flashcards
Source URL: https://quizplus.com/quiz/55918
Sample Questions
Q1) A local partnership was in the process of liquidating and reported the following capital balances: \(\begin{array}{ll}
\text {Justice, capital (40\% share of all profits and losses) }&\$23,000 \\
\text {Zobart, capital ( \( 35 \%) \) }&22,000 \\
\text { Douglass, capital ( } 25 \%)&(14,000) \\ \end{array}\)
Douglass indicated that the $14,000 deficit would be covered by a forthcoming contribution. However, the two remaining partners asked to receive the $31,000 that was then in the cash account. How much of this money should Zobart receive?
A)$15,467.
B)$14,467.
C)$17,333.
D)$15,633.
E)$15,867.
Q2) What is the role of the accountant during the liquidation process?
Q3) What should occur when a solvent partner has a deficit balance?
Q4) What events or circumstances might force the termination of a partnership and liquidation of its assets?
Q5) What is the purpose of a predistribution plan?
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Accounting for State and Local Governments,
Part I
Available Study Resources on Quizplus for this Chatper
77 Verified Questions
77 Flashcards
Source URL: https://quizplus.com/quiz/55917
Sample Questions
Q1) Which statement is not correct?
A)Governmental funds account for expenditures of financial resources rather than matching revenues and expenses.
B)The Fund Balance Reserved for Encumbrances account is not closed at the end of a fiscal year.
C)Revenues from licenses and permit fees are recognized when received in cash if using the modified accrual basis of accounting for governmental funds.
D)A fund is an independent accounting entity composed of cash and other financial resources, segregated for the purpose of carrying on specific activities and objectives. E)Commitments for purchase orders are recorded as expenses.
Q2) Which group of governmental financial statements reports all revenues and all costs of providing services each year?
A)GAAP-Based Financial Statements.
B)Fund Financial Statements.
C)Cost-Based Financial Statements.
D)Government-Wide Financial Statements.
E)General Fund Financial Statements.
To view all questions and flashcards with answers, click on the resource link above.
13
Chapter
Part II
Available Study Resources on Quizplus for this Chatper
49 Verified Questions
49 Flashcards
Source URL: https://quizplus.com/quiz/55916
Sample Questions
Q1) Which of the following must be presented in the MD&A of a government?
A)A brief discussion of the basic financial statements.
B)Total assets.
C)Total liabilities.
D)Net assets.
E)An organization chart of government officials.
Q2) What is meant by the term fiscally independent?
Q3) How is the Statement of Cash Flows for Proprietary Funds similar and dissimilar to a Statement of Cash Flows for a for-profit business?
Q4) The employees of the City of Raymond earn vacation compensation that totals $1,500 per week. During 2013, $30,000 in vacation time was taken and the remainder is expected to be used during the latter part of next year. In the government-wide financial statements, assuming there was no beginning balance, what liability should be reported at the end of 2013?
A)$0.
B)$1,500.
C)$30,000.
D)$48,000.
E)$78,000.
To view all questions and flashcards with answers, click on the resource link above. Page 14