Q 2-25 Identify the basic accounting equation. Q 2-26 What is the relationship between the accounting equation and the double-entry system of recording transactions? Q 2-27 Define the following: a. Permanent accounts b. Temporary accounts Q 2-28 A typical accrual recognition for salaries is as follows: Q 2-36 Describe the purchase method of accounting for a business combination. Q 2-37 Consolidated statements may be issued to show financial position as it would appear if two or more com- panies were one entity. What is the objective of these statements? Q 2-38 What is the basic guideline for consolidation? Q 2-39 Where must a companys code of ethics be made available? Q 2-40 Describe the Treadway Commission. Q 2-41 WhyistheCOSOreportoninternalcontrolsystems important under requirements of the Sarbanes-Oxley Act? Q 2-42 Under Sarbanes-Oxley, the auditing firm will include which two reports with the audited statements? (Note: These two reports can be combined into one report.) Q 2-43 Under Sarbanes-Oxley, management must include what report with the audited statements? Q 2-44 Private companies are not under Sarbanes-Oxley. Why do some private companies follow the law? Q 2-45 Indicate the two approaches to presenting con- solidated statements. Q 2-46 Describe how a company could be required to consolidate another company in which it has no or minor voting stock. Q 2-47 Consolidation rules are similar between coun- tries. Comment. Salaries Expense Salaries Payable $1,000 (increase) 1,000 (increase) Explain how the matching concept applies in this situation. Q 2-29 Why are adjusting entries necessary? Q 2-30 Why arent all transactions recorded in the gen- eral journal? Q 2-31 Describe the filing deadline for Form 10-K. Q 2-32 Identify the usual forms of a business entity and describe the ownership characteristic of each. Q 2-33 Why would the use of insider information be of concern if the market is efficient?