A CPA Who Is Not a Member of the AICPA

question 22

Multiple Choice

A CPA who is not a member of the AICPA failed to abide by the AICPA's Code of Professional Conduct.The state in which she practices accounting requires all CPAs to abide by "all professional standards." This CPA's license to practice accounting will potentially be:

• A) Suspended
• B) Revoked
• C) Not affected
• D) All of the above

Identify when a contract can be ratified and the effects of ratification or disaffirmance on the legality of contracts entered into by minors.

Understand the conditions under which a person may be considered to have legal incapacity to enter into contracts and the consequences thereof.

Grasp the legal distinctions and consequences of entering into contracts that contain illegal subject matter or perform illegal actions.

Recognize the role of arbitrators and courts in determining the enforceability of contracts challenged on the basis of legality.

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Definitions:

Chart of Accounts

A systematic listing of all ledger account titles and numbers used by a company to classify financial transactions.

Ledger Accounts

Individual accounts within the ledger that record changes to specific financial statement items, summarizing transaction effects.

Financial Statement Order

The sequence in which financial statements are prepared and presented, typically starting with the balance sheet, followed by the income statement, and then the cash flow statement.

Ledger Arrangement

A method or system used to organize and categorize financial information or transactions in a company's accounting records.