Wiley CPA Examination Review 2013-2014, Problems and Solutions

1554 Pages·2013·20.01 MB·English

by  O. Ray Whittington

WILEY
CPA
EXAM
REVIEW

WILEY

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2
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REVIEW
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40th Edition

Volume 2
Problems and Solutions

O. Ray Whittington,
CPA, PhD
The following items, Copyright © by the American Institute of Certified Public Accountants, Inc., are reprinted with permission:
1. Material from Uniform CPA Examination Questions and Answers, 1978 through 2001.
2. Information for Uniform CPA Examination Candidates, Board of Examiners, 2000.
3. Material from the Certified Internal Auditor Examination, Copyright © 1994 through 1997 by the Institute of Internal
Auditors, Inc., are reprinted and/or adapted with permission.
4. AICPA CPA Exam Released Questions, 1997 through 2012.
Material from the Certified Management Accountant Examinations, Copyright © 1993 through 1997 by the Institute of Certified
Management Accountants, are reprinted and/or adapted with permission.
From a declaration of principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers.
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ISBN: 978-1-118-58386-9 (Volume 2 paperback); 978-1-118-75991-2 (ebk); 978-1-118-75998-1 (ebk);
978-1-118-76004-8 (ebk)
Printed in the United States of America.
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CONTENTS

Preface ix
About the Author xi
About the Contributors xi

How To Use This Book 1

AUDITING AND ATTESTATION
Module 1: Professional Responsibilities 11
Module 2: Engagement Planning, Obtaining an Understanding of the
Client and Assessing Risks 29
Module 3: Understanding Internal Control and Assessing Control Risk 76
Module 4: Responding to Risk Assessment: Evidence Accumulation and
Evaluation 121
Module 5: Reporting 175
Module 6: Accounting and Review Services 216
Module 7: Audit Sampling 230
Module 8: Auditing with Technology 248

FINANCIAL ACCOUNTING AND REPORTING
Module 9: Basic Theory and Financial Reporting 263
Module 10: Inventory 364
Module 11: Fixed Assets 395
Module 12: Monetary Current Assets and Current Liabilities 429
Module 13: Present Value 467
Module 14: Deferred Taxes 543
Module 15: Stockholders’ Equity 563
Module 16: Investments 599
Module 17: Statement of Cash Flows 627
Module 18: Business Combinations and Consolidations 649
Module 19: Derivative Instruments and Hedging Activities 677
Module 20: Miscellaneous 697
Module 21: Governmental (State and Local) Accounting 741
Module 22: Not-for-Profit Accounting 769
REGULATION
PROFESSIONAL RESPONSIBILITIES AND BUSINESS LAW 789
Module 23: Professional and Legal Responsibilities 791
Module 24: Federal Securities Acts 811
Module 25: Business Structure 825
Module 26: Contracts 845
Module 27: Sales 863
Module 28: Commercial Paper 879
Module 29: Secured Transactions 897
Module 30: Bankruptcy 906
Module 31: Debtor-Creditor Relationships 918
Module 32: Agency 926
Module 33: Regulation of Business Employment, Environment, and
Antitrust 934
Module 34: Property 945
FEDERAL TAXATION 959
Module 35: Individual Taxation 961
Module 36: Transactions in Property 1037
Module 37: Partnership Taxation 1059
Module 38: Corporate Taxation 1087
Module 39: Other Taxation Topics 1148

BUSINESS ENVIRONMENT AND CONCEPTS
Module 40: Corporate Governance, Internal Control, and Enterprise Risk
Management 1175
Module 41: Information Technology 1187
Module 42: Economics, Strategy, and Globalization 1217
Module 43: Financial Risk Management and Capital Budgeting 1240
Module 44: Financial Management 1260
Module 45: Performance Measures 1288
Module 46: Cost Measurement 1303
Module 47: Planning, Control, and Analysis 1319
APPENDICES
Appendix A: Sample Examinations 1345
Auditing andAttestation 1345
Financial Accounting and Reporting 1374
Regulation 1406
Business Environment and Concepts 1431
Appendix B: Sample Testlet Released by the AICPA 1448
Auditing and Attestation 1448
Financial Accounting and Reporting 1454
Regulation 1463
Business Environment and Concepts 1470
Appendix C: 2013 Released AICPA Questions 1472
Auditing and Attestation 1472
Financial Accounting and Reporting 1491
Regulation 1510
Business Environment and Concepts 1526