In Which of the Following Situations Would a CPA Not

question 72

Multiple Choice

In which of the following situations would a CPA not be considered independent?

• A)A CPA has obtained an auto loan from a banking client in the current year.
• B)A CPA has obtained an automobile lease term from a client in the current year.
• C)A CPA has obtained a $4,000 cash advance from a banking client in the current year.
• D)A CPA has obtained a home mortgage loan from a client in the current year.

---

Definitions:

Period Cost

Expenses on the income statement that are not directly tied to the production of goods, including sales, administration, and other overhead costs.

Opportunity Cost

The cost of foregone alternatives, representing the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.

Conversion Costs

Expenses incurred in the process of converting raw materials into finished goods, including labor and manufacturing overhead.

Direct Materials

Materials that become an integral part of a finished product and whose costs can be conveniently traced to it.