1.

Which is incorrect? *

5 points

a. ASB sets auditing standards for auditors of publicly traded companies

b. FASB sets U.S. generally accepted accounting principles

c. The SEC relies on fees collected from publicly traded companies to operate.

d. EITF helps apply U.S. generally accepted accounting principles to new situations

2. Which one does not require an adjusting entry? *

a. At the beginning of the month, Marlin agreed to perform services for the next three months for Catsui Corporation for $30,000 per month. Catsui paid Marlin $90,000 in advance. One month has now passed.

b. Marlin pays its employees every two weeks. At the end of the month, Marlin owes its employees $480,000, but will not pay them until the following week.

c. Marlin paid $300,000 for rent at the beginning of the month by debiting prepaid rent and crediting cash. The $300,000 covered six months of occupancy, but only one month has passed.

d. At the beginning of the month, Marlin agreed to perform services for Ryland Company for $16,000 per month for the next six months. Ryland has not yet paid any cash to Marlin and the work is not substantially complete.

3.

Which one does not require an adjusting entry? *

a. At the beginning of the month, Marlin agreed to perform services for the next three months for Catsui Corporation for $30,000 per month. Catsui paid Marlin $90,000 in advance. One month has now passed.

b. Marlin pays its employees every two weeks. At the end of the month, Marlin owes its employees $480,000, but will not pay them until the following week.

c. Marlin paid $300,000 for rent at the beginning of the month by debiting prepaid rent and crediting cash. The $300,000 covered six months of occupancy, but only one month has passed.

d. At the beginning of the month, Marlin agreed to perform services for Ryland Company for $16,000 per month for the next six months. Ryland has not yet paid any cash to Marlin and the work is not substantially complete.

4.

Which of the following is true about the Financial Accounting Standards Board (FASB)? *

5 points

a. FASB sets standards that apply to companies throughout the world.

b. FASB was created by the EITF to handle smaller issues in a timely manner.

c. FASB produces standards that apply to almost all companies in the United States.

d. FASB was created by the Securities Exchange Act of 1934.