Which of the following penalties is usually imposed against an accountant who, in the course of performing professional services, breaches contract duties owed to a client?
a. Specific performance.
b. Punitive damages.
c. Money damages.
d. Rescission.
Correct Ans - c
A CPA firm must do which of the following before it can participate in the preparation of an audit report of a company registered with the Securities and Exchange Commission (SEC)?
a. Join the SEC Practice Section of the AICPA.
b. Register with the Public Company Accounting Oversight Board.
c. Register with the Financial Accounting Standards Board (FASB).
d. Register with the SEC pursuant to the Securities Exchange Act of 1934.
Correct Ans - b
Under Section 12 of the Securities Exchange Act of 1934, in addition to companies whose securities are traded on a national exchange, what class of companies is subject to the SEC's continuous disclosure system?
a. Companies with annual revenues in excess of $5 million and 300 or more shareholders.
b. Companies with annual revenues in excess of $10 million and 500 or more shareholders.
c. Companies with assets in excess of $5 million and 300 or more shareholders.
d. Companies with assets in excess of $10 million and 500 or more shareholders.
Correct Ans - d
Brown transfers property to a trust. A local bank was named trustee. Brown retained no powers over the trust. The trust instrument provides that current income and $6,000 of principal must be distributed annually to the beneficiary. What type of trust was created?
a. Simple.
b. Grantor.
c. Complex.
d. Revocable.
Correct Ans - C
For which of the following contracts will a court generally grant the remedy of specific performance?
a. A contract for the sale of a patent.
b. A contract of employment.
c. A contract for the sale of fungible goods.
d. A contract for the sale of stock that is traded on a national stock exchange.
Correct Ans - a
Grill deals in the repair and sale of new and used clocks. West brought a clock to Grill to be repaired. One of Grill's clerks mistakenly sold West's clock to Hone, another customer. Under the Sales Article of the UCC, will West win a suit against Hone for the return of the clock?
a. No, because the clerk was not aware that the clock belonged to West.
b. No, because Grill is a merchant to whom goods had been entrusted.
c. Yes, because Grill could not convey good title to the clock.
d. Yes, because the clerk was negligent in selling the clock.
Correct Ans - b
