1. Which historical event significantly influenced the regulatory environment for accounting in the United States? - A) The signing of the Declaration of Independence - B) The Industrial Revolution - C) The Great Depression - D) The Dot-com Bubble Answer: C) The Great Depression Rationale: The Great Depression led to the establishment of the Securities and Exchange Commission (SEC) and subsequent securities laws, which profoundly impacted accounting standards and practices. 2. The Sarbanes-Oxley Act of 2002 was a response to which of the following events? - A) The Teapot Dome Scandal - B) The Savings and Loan Crisis - C) The Enron Scandal - D) The Subprime Mortgage Crisis Answer: C) The Enron Scandal Rationale: The Enron Scandal exposed significant weaknesses in corporate governance, including accounting fraud, leading to the enactment of the Sarbanes-Oxley Act to enhance financial disclosures and prevent accounting fraud. 3. How did the American Revolution impact accounting practices in the newly formed United States? - A) It introduced the concept of taxation without representation. - B) It led to the creation of the double-entry bookkeeping system. - C) It established the first central bank in the United States. - D) It influenced the development of American currency. Answer: C) It established the first central bank in the United States. Rationale: The need to finance the war and manage debts led to the establishment of the Bank of North America, the first central bank, influencing the development of accounting practices related to banking and finance. 4. The Revenue Act of 1913 had which of the following effects on accounting?