Certified Public Accountant Business Environment & Concepts 2

Question 1

Which type of business structure provides limited liability protection to all owners while allowing pass-through taxation?

Accepted Answer

Limited Liability Company (LLC)

Answer

General partnership

Answer

C corporation

Answer

Sole proprietorship

Question 2

What does a positive net present value (NPV) indicate about a capital investment project?

Accepted Answer

The project will generate value above the required rate of return

Answer

The project will break even

Answer

The project has a short payback period

Answer

The project requires no initial investment

Question 3

In cost accounting, which method assigns manufacturing overhead based on the actual usage of cost drivers in each activity?

Accepted Answer

Activity-based costing

Answer

Job order costing

Answer

Process costing

Answer

Standard costing

Question 4

What is the primary function of the Foreign Corrupt Practices Act (FCPA) for US-based companies?

Accepted Answer

Prohibit bribery of foreign government officials

Answer

Regulate foreign currency transactions

Answer

Control import and export tariffs

Answer

Establish international accounting standards

Question 5

Which financial statement analysis technique expresses each line item as a percentage of a base figure within the same period?

Accepted Answer

Vertical analysis

Answer

Horizontal analysis

Answer

Trend analysis

Answer

Ratio analysis

Question 6

What is the breakeven point in units for a company with fixed costs of $50,000, selling price of $25 per unit, and variable costs of $15 per unit?

Accepted Answer

5,000 units

Answer

2,000 units

Answer

3,333 units

Answer

10,000 units