Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
CHAPTER 11 NAME ___________________________________
TEN-MINUTE QUIZ SECTION _____________ DATE____________
_____________________________________________________________________________
_
_____ 1. A term accountants use to describe how well a particular earnings number
communicates the firm’s true performance is:
a. Earnings per share
b. Net income
c. Earnings growth ratio
d. Quality of earnings
_____ 2. Which of the following is not a method used to manipulate earnings?
a. Revenue recognition
b. Big bath charges
c. The matching rule
d. Cookie jar reserves
_____ 3. Higher quality earnings are associated with what kind of accounting choices?
a. More conservative accounting choices
b. Accounting choices that have not been changed in the past 3-5 years
c. Choices where the newest accounting method is selected
d. None of the above
_____ 4. When a firm is not going to meet its earnings expectations, the managers decide
to go ahead and write off anything that looks like it might have to be written off in
the next few years. This practice is called:
a. Revenue recognition
b. Big bath charges
c. The matching rule
d. Cookie jar reserves
_____ 5. A firm should use the basic revenue recognition rules in that you do not recognize
revenue until:
a. It is earned
b. Collection is reasonably assured
c. Payment has been received
d. A and B are both true
_____ 6. Corporate governance is:
a. The way a firm governs itself
b. Executed by the shareholders
c. The responsibility of the accounting staff
d. All of the above
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-1
_____ 7. The PCAOB is:
a. The Public Company Oversight Board
b. The Preferred Company Oversight Board
c. The Prime Corporation Ownership Board
d. The Public Corporation Ownership Board
_____ 8. The Sarbanes-Oxley Act of 2002 requires:
a. An audit every month
b. The majority of directors to be dependent on management
c. A code of ethics for shareholders
d. A report on the effectiveness of the company’s internal control structure
_____ 9. All of the following are elements of good corporate governance, except:
a. Incentive-based compensation plans that offer rewards to management for
performance that raises net income
b. A CEO who encourages board involvement for review of major
management and financial decisions
c. The ethical climate in the firm
d. A strong and independent audit function
_____ 10. Auditors must be:
a. Overseen by the audit committee of the board of directors
b. Knowledgeable about all aspects of the company’s operations
c. Independent
d. All of the above
ANSWER KEY - CHAPTER 11 – TEN-MINUTE QUIZ
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-2
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-3
