ABC Company owes XYZ Enterprises $1 million for goods purchased from XYZ over a year ago. XYZ Enterprises continues to list the $1 million in their accounts receivable balance and does not record any allowance for doubtful accounts. XYZ Enterprises is failing to follow [removed] Financial Accounting Standards Board FAS 157 [removed] SFAS 169 [removed] Financial Accounting Standards Board Statement No. 5 [removed] SFAS 101 2 The bankruptcy of WorldCom in 2002 was due to the company’s actions in [removed] recording fictitious liabilities [removed] failing to record revenues [removed] classifying expenses as assets [removed] expensing equipment purchases rather than capitalizing these purchases 3 The price elasticity of demand coefficient measures [removed] buyer responsiveness to price changes [removed] the slope of the demand curve [removed] how far business executives can stretch their fixed costs [removed] the extent to which a demand curve shifts as incomes change 4 Which of the following is a fundamental characteristic of the market system? [removed] Government-set wages and prices [removed] Property rights [removed] Central planning by government [removed] Unselfish behavior 5 In 2002, Adelphia Cable filed bankruptcy when it was discovered that [removed] bank debt in excess of $2.3 billion was not shown on the financial statements [removed] sales in excess of $72 billion were omitted from the financial statements [removed] excess fictitious expenses of $1 million were added to the income statement [removed] assets on the financial statements were considerably undervalued 6 When applying for a bank loan or trade credit, one way a company can appear to be in a healthier financial position would be to [removed] overstate its expenses [removed] undervalue its assets [removed] understate its sales [removed] understate its liabilities 7 A normative statement is one that [removed] applies to macroeconomics [removed] is based on value judgments [removed] applies only to microeconomics [removed] is based on the law of averages 8 Section 55 of the Principles of Professional Conduct of the AICPA states that [removed] members should perform all professional responsibilities with the highest sense of integrity [removed] a member should observe the profession’s technical and ethical standards, strive continually to improve competence and quality of services, and discharge professional responsibility to the best of the member’s ability [removed] members should accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professionalism [removed] a member should maintain objectivity and be free of conflicts of interest in discharging professional responsibilities 9 Four professional general standards and responsibilities for Certified Public Accountants are quality control and assurance, professional judgment, competence, and: [removed] knowledge [removed] diligence [removed] int.