Acc 576

ACC 576 Final Exam Guide

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ACC 576 Final Exam Study Question 1 (IFTC-0112) Controls in the information technology area are classified into the preventive, detective, and corrective categories. Which of the following is a preventive control?

Question 2 (IFTC-0082) An organization relied heavily on e-commerce for its transactions.

Evidence of the organization’s security awareness manual would be an example of which of the following types of controls?

Question 3 (IFTC-0067) Which of the following types of control plans is particular to a specific process or subsystem, rather than related to the timing of its occurrence?

Question 4 (CGIC-0032) Which of the following is true about the Sarbanes-Oxley requirements regarding the audit committee financial expert?

Question 5 (CGIC-0026)

Which of the following is not a component of COSO’s enterprise risk management framework?

Question 6 (CGIC-0010) Which of the following is not required by the Sarbanes-Oxley Act of 2002?

Question 7 (CGIC-0025) Which of the following is not an advantage of the employment of an enterprise risk management (ERM) system?

Question 8 (CGIC-0008) A financial statement audit performed under the requirements of the Sarbanes-Oxley Act of 2002 must include an examination and report upon Question 9 (CGIC-0024) An important benefit of an enterprise risk management system is Question 10 (CGIC-0023) Which of the following bodies has developed a framework for enterprise risk management?

Question 11 (CGIC-0005) Which of the following executives of an issuer corporation must certify to the accuracy and truthfulness of financial reports filed with the SEC? Question 12 (CGIC-0004) Which of the following is not a responsibility that should be assigned to the audit committee of the board of directors?

Question 13 (CGIC-0018) Which of the following components of internal control are characterized by ongoing activities and separate evaluations?

Question 14 (CGIC-0003) Which of the following can be the most effective monitoring device for effective corporate governance?

Question 15 (CGIC-0002) From a corporate governance standpoint which of the following best describes the main goal of a form of executive compensation?

Question 16 (CGIC-0019) Which of the following components of internal control encompass policies and procedures that ensure that management’s directives are carried out?

Question 17 (CGIC-0001) Which of the following forms of compensation is more likely to result in shirking by management?

Question 18 (CGIC-0036) In the COSO framework, individuals within the company that monitor internal controls are referred to as Question 19 (CGIC-0016) The COSO definition of internal control considers control activities a(n): Question 20 (CGIC-0021)

If internal control is properly designed, the same employee should not be permitted to Question 1 (ECON-0036) If a government were to use only fiscal policy to stimulate the economy from a recession, it would Question 2 (ECON-0056) Disposable income is calculated as Question 3 (ECON-0003) Which of the following changes would create pressure for the Japanese yen to appreciate relative to the U.S. dollar?

Question 4 (ECON-0021) If a group of consumers decide to boycott a particular product, the expected result would be Question 5 (ECON-0020) The movement along the demand curve from one price-quantity combination to another is called a(n) Question 6 (ECON-0030) In the long run, a firm may experience increasing returns due to Question 7 (ECON-0017) Which of the following is not accurate about product differentiation?

Question 8 (ECON-0063) Which of the following segments of the economy will be least affected by the business cycle?

Question 9 (ECON-0069) What is the effect when a foreign competitor’s currency becomes weaker compared to the U.S. dollar?

Question 10 (ECON-0046) Some economic indicators lead the economy into a recovery or recession, and some lag it. An example of a lag variable would be Question 11 (ECON-0002) If the U.S. dollar declines in value relative to the currencies of many of its trading partners, the likely result is that Question 12 (ECON-0055) The rate of unemployment caused by changes in the composition of employment opportunities over time is referred to as the Question 13 (ECON-0060) To address the problem of a recession, the Federal Reserve Bank most likely would take which of the following actions?

Question 14 (ECON-0040) Which of the following is a direct effect of imposing a protective tariff on an imported product?

Question 15 (ECON-0077) What does the consumer price index measure?

Question 16 (ECON-0037) The discount rate of the Federal Reserve System is Question 17 (ECON-0073)

Which of the following individuals would be most hurt by an unanticipated increase in inflation?

Question 1 (FINM-0082) Which of the following statements is correct regarding the weighted-average cost of capital (WACC)?

Question 2 (FINM-0066) The benefits of debt financing over equity financing are likely to be highest in which of the following situations?

Question 3 (RMCB-0027) Which of the following describes an option?

Question 4 (FINM-0034) A company has $1,500,000 of outstanding debt and $1,000,000 of outstanding common equity. Management plans to maintain the same proportions of financing from each source if additional projects are undertaken. If the company expects to have $60,000 of retained earnings available for reinvestment in new projects in the coming year, what dollar amount of new investments can be undertaken without issuing new equity?

Value of equity Value of debt + Value of equity Since the question states that the firm will maintain the same weight of each financing source, each dollar invested is composed of 40 cents of equity and 60 cents of debt. The first $60,000 of equity used in financing new projects is sourced from retained earnings. This source of equity is exhausted when the firm reaches an investment level of

$60,000 / .4 = $150,000.When the level of investment exceeds this amount, equity financing must be raised externally.

Question 5 (FINM-0024) DQZ Telecom is considering a project for the coming year that will cost $50,000,000. DQZ plans to use the following combination of debt and equity to finance the investment: Question 6 (RMCB-0026) Which of the following describes a normal yield curve?

Question 7 (FINM-0073) Which of the following types of bonds is most likely to maintain a constant market value?

Question 8 (RMCB-0058) Which of the following is an advantage of net present value modeling?

Question 9 (RMCB-0057) The calculation of depreciation is used in the determination of the net present value of an investment for which of the following reasons?

Question 10 (RMCB-0051) Net present value as used in investment decision-making is stated in terms of which of the following options?

Question 11 (RMCB-0020) Essex Corporation is evaluating a lease that takes effect on March 1, 2012. The company must make eight equal payments, with the

first payment due on March 1, 2012. The concept most relevant to the evaluation of the lease is Question 12 (RMCB-0043) On January 1, 2012, Colt Company issued 10-year bonds with a face amount of $1,000,000 and a stated interest rate of 8% payable annually on January 1. The bonds were priced to yield 10%. Present value factors are as follows: Present value of 1 for 10 periods Present value of an ordinary annuity of 1 for 10 periods The total issue price (rounded) of the bonds was Question 13 (FINM-0001) Net working capital is the difference between Question 14 (RMCB-0041) Assume that management of Trayco has generated the following data about an investment project that has a five-year life: Initial investment Additional investment in working capital Cash flows before income taxes for years 1 through 5 Yearly depreciation for tax purposes Terminal value of machine Cost of capital Present value of $1 received after 5 years discounted at 8% Present value of an ordinary annuity of $1 for 5 years at 8%

Assume that Trayco's marginal tax rate is 30% and all cash flows come at the end of the year. Calculate the net present value of the investment of the project.

Question 15 (FINM-0014) Which one of the following statements correctly compares bond financing alternatives?

Question 16 (RMCB-0056) A client wants to know how many years it will take before the accumulated cash flows from an investment exceed the initial investment, without taking the time value of money into account.

Which of the following financial models should be used?

Question 17 (RMCB-0049) Harvey Co. is evaluating a capital investment proposal for a new machine. The investment proposal shows the following information: Initial cost Life Annual net cash inflows Salvage value If acquired, the machine will be depreciated using the straight-line method. The payback period for this investment is Question 18 (RMCB-0054) Which of the following statements is correct regarding financial decision making?

Question 19 (RMCB-0052) Which of the following formulas should be used to calculate the economic rate of return on common stock?

Question 20 (FINM-0054) All of the following are features of just-in-time (JIT) systems except Question 1 (IFTC-0054) Because log-on procedures may be cumbersome and tedious, users often store log-on sequences in their personal computers and invoke them when they want to use mainframe facilities. A risk of this practice is that Question 2 (IFTC-0035) Employee numbers have all numeric characters. To prevent the input of alphabetic characters, what technique should be used?

Question 3 (IFTC-0051) An organization's computer help desk function is usually a responsibility of the Question 4 (IFTC-0022) First Federal S&L has an online real-time system, with terminals installed in all of its branches. This system will not accept a customer's cash withdrawal instructions in excess of $1,000 without the use of a "terminal audit key." After the transaction is authorized by a supervisor, the bank teller then processes the transaction with the audit key. This control can be strengthened by

Question 5 (IFTC-0043) A brokerage firm has changed a program so as to permit higher transaction volumes. After proper testing of the change, the revised programs were authorized and copied to the production library. This practice is an example of Question 6 (IFTC-0023) In a daily computer run to update checking account balances and print out basic details on any customer's account that was overdrawn, the overdrawn account of the computer programmer was never printed. Which of the following control procedures would have been most effective in detecting this fraud?

Question 7 (IFTC-0088) In which of the following locations should a copy of the accounting system data backup of year-end information be stored?

Question 8 (IFTC-0018) A computer input control is designed to ensure that Question 9 (IFTC-0002) Which of the following would lessen internal control in a computer processing system?

Question 10 (IFTC-0103) A value-added network (VAN) is a privately owned network that performs which of the following functions?

Question 11 (IFTC-0102) Which of the following is usually a benefit of using electronic funds transfer for international cash transactions?

Question 12 (IFTC-0030) The machine language for a specific computer Question 13 (IFTC-0049) Securing client/server systems is a complex task because of all of the following factors except: Question 14 (IFTC-0028) A data warehouse in an example of Question 15 (IFTC-0078) Compared to batch processing, real-time processing has which of the following advantages?

Question 16 (IFTC-0032) Which of the following is not a characteristic of a batch processed computer system?

Question 17 (IFTC-0072) Which of the following is an advantage of a computer-based system for transaction processing over a manual system? A computer-based system Question 18 (IFTC-0131) When a client's accounts payable computer system was relocated, the administrator provided support through a dial-up connection to a server. Subsequently, the administrator left the company.

No changes were made to the accounts payable system at that time. Which of the following situations represents the greatest security risk?

Question 19 (IFTC-0114) In a large multinational organization, which of the following job responsibilities should be assigned to the network administrator?

Question 20 (IFTC-0055) Today organizations are using microcomputers for data presentation because microcomputer use, compared to mainframe use, is more Question 1 (COST-0056) The following is selected information from the records of Ray, Inc.: Purchases of raw materials Raw materials, beginning Raw materials, ending Work-in-process, beginning Work-in-process, ending Cost of goods sold Finished goods, beginning Finished goods, ending What is the total amount of conversion costs?

Question 2 (PLAN-0049) A defense contractor for a government space project has incurred $2,500,000 in actual design costs to date for a guidance system whose total budgeted design cost is $3,000,000. If the design

phase of the project is 60% complete, what is the amount of the contractor's current overrun/savings on this design work?

Question 3 (COST-0044) A company with three products classifies its costs as belonging to five functions: design, production, marketing, distribution, and customer services. For pricing purposes, all company costs are assigned to the three products. The direct costs of each of the five functions are traced directly to the three products. The indirect costs of each of the five business functions are collected into five separate cost pools and then assigned to the three products using appropriate allocation bases. The allocation base that would most likely be the best for allocating the indirect costs of the distribution function is Question 4 (COST-0051) Which of the following is assigned to goods that were either purchased or manufactured for resale?

Question 5 (PLAN-0045) A company manufactures a product that has the direct material standard cost presented below. Budgeted and actual information for the current month for the manufacture of the finished product and the purchase and use of the direct material are also presented.Standard cost for direct material1.60 lb. @ $2.50 per lb. = $4.00

Finished goods (in units) Direct material usage (in pounds)

Direct material purchases (in pounds) Total cost of direct material purchases The direct material price variance for the current month is Question 6 (PLAN-0041) A favorable material price variance coupled with an unfavorable material usage variance would most likely result from Question 7 (PERM-0001) A strategy map in the balanced scorecard framework is Question 8 (PLAN-0035) Comparing actual results with a budget based on achieved volume is possible with the use of a Question 9 (PLAN-0032) The cash receipts budget includes Question 10 (COST-0043) A company is attempting to determine if there is a cause and effect relationship between scrap value and output produced. The following exhibit presents the company's scrap data for the last fiscal year: Scrap Value as a Percent of Standard Dollar Value of Output Produced Month Nov. 11 Dec. 11

Jan. 12 Feb. 12 Mar. 12 Apr. 12 May-12 Jun. 12 Jul. 12 Aug. 12 Sep. 12 Oct. 12 Based on the above data, the company's scrap value in relation to the standard dollar value of output produced appears to be Question 11 (PLAN-0013) In preparing its cash budget for July 2012, Reed Company made the following projections: Sales Gross profit (based on sales) Decrease in inventories Decrease in accounts payable for inventories For July 2012 what were the estimated cash disbursements for inventories?

Question 12 (PERM-0022)

The following selected data is for the Consumer Products Division of Gerriod Corp.

Sales Average invested capital (total assets) Net operating profit Cost of capital Calculate the spread between the return on investment and the required rate of return for the Consumer Products Division.

Question 13 (RMCB-0001) A company is considering exchanging an old asset for a new asset.

Ignoring income tax considerations, which of the following is economically relevant to the decision?

Question 14 (PLAN-0105) Carter Co. paid $1,000,000 for land three years ago. Carter estimates it can sell the land for $1,200,000, net of selling costs.

If the land is not sold, Carter plans to develop the land at a cost of $1,500,000. Carter estimates net cash flow from the development in the first year of operations would be $500,000. What is Carter's opportunity cost of the development?

Question 15 (PERM-0012) In the cost of quality, liability claims are examples of Question 16 (PERM-0019) The following selected data is for the Consumer Products Division of Gerriod Corp.

Sales Average invested capital (total assets) Net operating profit Cost of capital Calculate the asset turnover ratio for the Consumer Products Division.

Question 17 (PLAN-0106) A company that produces 10,000 units has fixed costs of $300,000, variable costs of $50 per unit, and a sales price of $85 per unit. After learning that its variable costs will increase by 20%, the company is considering an increase in production to 12,000 units. Which of the following statements is correct regarding the company's next steps?

Question 18 (PLAN-0087) Which of the following listings correctly describes the order in which the four types of budgets must be prepared?

Question 19 (PLAN-0048) All else being equal, the breakeven point in units will be higher if Question 20 (PLAN-0091) Relevant information for material A follows: Quantity purchased Standard quantity allowed Actual price Standard price

What was the direct material price variance for material A? --------------------------------------------------------------------------

ACC 576 Week 1 Quiz (All Possible Questions)

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Week 1 Quiz Question 1 The first general standard requires that an audit of financial statements is to be performed by a person or persons having Question 2 Which of the following standards requires a critical review of the work done and the judgment exercised by those assisting in an audit at every level of supervision?

Question 3 An auditor uses the knowledge provided by the understanding of the internal control structure and the final assessed level of control risk primarily to determine the nature, timing, and extent of the Question 4 An auditor's primary consideration regarding an entity's internal control structure policies and procedures is whether the policies and procedures Question 5 To obtain evidential matter about control risk, an auditor selects tests from a variety of techniques including Question 6 Prior to commencing fieldwork, an auditor usually discusses the general audit strategy with the client's management. Which of the

following matters does the auditor and management agree upon at this time?

Question 7 Which of the following factors most likely would cause a CPA to decline to accept a new audit engagement?

Question 8 Which of the following factors would least influence an auditor's consideration of the reliability of data for purposes of analytical procedures?

Question 9 A previously communicated significant deficiency ordinarily should be communicated again if Question 10 Which of the following statements concerning analytical procedures is correct?

Question 11 Which of the following is the authoritative body designated to promulgate attestation standards?

Question 12 As the acceptable level of detection risk decreases, an auditor may change the Question 13 A CPA in public practice must be independent in fact and appearance when providing which of the following services?

Question 14 The primary objective of procedures performed to obtain an understanding of the internal control structure is to provide an auditor with Question 15 Which of the following statements is correct concerning an auditor's required communication of significant deficiencies?

Question 16 Which of the following procedures would an auditor most likely perform in planning a financial statement audit?

Question 17

When an auditor increases the planned assessed level of control risk because certain control procedures were determined to be ineffective, the auditor would most likely increase the Question 18 An auditor concludes that a client has committed an illegal act that has not been properly accounted for or disclosed. The auditor should withdraw from the engagement if the Question 19 In performing an attestation engagement, a CPA typically Question 20 Which of the following characteristics most likely would heighten an auditor's concern about the risk of material misstatement arising from fraudulent financial reporting?

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ACC 576 Week 2 Quiz (All Possible Questions)

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This Tutorial contains More than 150 Question Test Bank (we have listed some of the Questions below)

Week 2 Quiz Question 1 The most likely result of ineffective internal control policies and procedures in the revenue cycle is that

Question 2 An entity with a large volume of customer remittances by mail could most likely reduce the risk of employee misappropriation of cash by using Question 3 Which of the following statements is generally correct about the reliability ofaudit evidence?

Question 4 Which of the following audit procedures would an auditor most likely perform to test controls relating to management's assertion concerning the completeness of sales transactions?

Question 5 The audit working paper that reflects the major components of an amount reported in the financial statements is the Question 6 Which of the following most likely would indicate the existence of related parties?

Question 7 Which of the following procedures would an auditor most likely perform during an audit engagement's overall review stage in formulating an opinion on an entity's financial statements?

Question 8 In auditing accounts receivable the negative form of confirmation request most likely would be used when

Question 9 Before applying substantive tests to the details of asset accounts at an interim date, an auditor should assess: Question 10 "There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices that could have a material effect on the financial statements." The foregoing passage is most likely from a Question 11 "We have disclosed to you all known instances of noncompliance or suspected noncompliance with laws and regulations whose effects should be considered when preparing financial statements." The foregoing passage most likely is from a(n) Question 12 Which of the following controls would be most effective in assuring that recorded purchases are free of material errors?

Question 13 An auditor should request that an audit client send a letter of inquiry to those attorneys who have been consulted concerning litigation, claims, or assessments. The primary reason for this request is to provide Question 14 To which of the following matters would materiality limits not apply in obtaining written management representations?

Question 15

In which of the following circumstances is substantive testing of accounts receivable before the balance sheet date most appropriate?

Question 16 The purpose of segregating the duties of hiring personnel and distributing payroll checks is to separate the Question 17 An auditor's purpose in reviewing credit ratings of customers with delinquent accounts receivable most likely is to obtain evidence concerning management's assertions about Question 18 The objective of tests of details of transactions performed as substantive tests is to Question 19 Which of the following documentation is not required for an audit in accordance with generally accepted auditing standards?

Question 20 An auditor should design the written audit program so that --------------------------------------------------------------------------

ACC 576 Week 3 Quiz

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This Tutorial contains More than 150 Question Test Bank (we have listed some of the Questions below)

Week 3 Quiz Question 1 In designing written audit programs, an auditor should establish specific audit objectives that relate primarily to the Question 2 Which of the following procedures is least likely to be performed before the balance sheet date?

Question 3 In determining whether transactions have been recorded, the direction of the audit testing should be from the Question 4 Which of the following combination of procedures would an auditor most likely perform to obtain evidence about fixed asset additions?

Question 5 An auditor may achieve audit objectives related to particular assertions by Question 6

The sampling unit in a test of controls pertaining to the existence of payroll transactions ordinarily is a(an) Question 7 The risk of incorrect acceptance and the likelihood of assessing control risk too low relate to the Question 8 Which of the following audit procedures probably would provide the most reliable evidence concerning the entity's assertion of rights and obligations related to inventories?

Question 9 When an auditor tests a computerized accounting system, which of the following is true of the test data approach?

Question 10 An auditor is determining the sample size for an inventory observation using mean-per-unit estimation, which is a variables sampling plan. To calculate the required sample size, the auditor usually determines the Question 11 Processing data through the use of simulated files provides an auditor with information about the operating effectiveness of control policies and procedures.

One of the techniques involved in this approach makes use of Question 12 An auditor should trace bank transfers for the last part of the audit period and first part of the subsequent period to detect whether

Question 13 The primary responsibility of a bank acting as registrar of capital stock is to Question 14 An auditor most likely would perform substantive tests of details on payroll transactions and balances when Question 15 Cutoff tests designed to detect credit sales made before the end of the year that have been recorded in the subsequent year provide assurance about management's assertion of Question 16 In performing tests of controls over authorization of cash disbursements, which of the following sampling methods would be most appropriate?

Question 17 In evaluating the adequacy of the allowance for doubtful accounts, an auditor most likely reviews the entity's aging of receivables to support management's financial statement assertion of Question 18 Which of the following courses of action would an auditor most likely follow in planning a sample of cash disbursements if the auditor is aware of several unusually large cash disbursements?

Question 19

Which of the following characteristics most likely would be an advantage of using classical variables sampling rather than probability-proportional-to-size (PPS) sampling?

Question 20 Which of the following statements is correct concerning statistical sampling in tests of controls?

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ACC 576 Week 4 Quiz (All Possible Questions)

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This Tutorial contains More than 150 Question Test Bank (we have listed some of the Questions below) Week 4 Quiz Question 1 Comfort letters ordinarily are addressed to Question 2 When compiling a nonpublic entity's financial statements, an accountant would be least likely to Question 3 Comfort letters ordinarily are signed by the entity's Question 4 Which of the following matters is covered in a typical comfort letter?

Question 5 Green, CPA, was engaged to audit the financial statements of Essex Co. after its fiscal year had ended. The timing of Green's appointment as auditor and the start of field work made confirmation of accounts receivable by direct communication with the debtors ineffective. However, Green applied other procedures and was satisfied as to the reasonableness of the account balances.

Green's auditor's report most likely contained a(an) Question 6 When engaged to audit a not-for-profit organization in accordance with Government Auditing Standards, an auditor is required to prepare a written report on compliance with laws and regulations that includes Question 7 (NOTE: This is a CPAexcel simulated Exam Question, not AICPA licensed Material) The effects of financial leverage result when a firm finances assets using: Question 8 Which of the following statements is correct concerning both an engagement to compile and an engagement to review a nonpublic entity's financial statements?

Question 9 Which of the following representations does an accountant make implicitly when issuing the standard report for the compilation of a nonpublic entity's financial statements?

Question 10 Which of the following statements is correct regarding a review engagement of a nonpublic company's financial statements performed in accordance with the Statements on Standards for Accounting and Review Services (SSARs)?

Question 11

In which of the following situations would an auditor ordinarily choose between expressing an "except for" qualified opinion or an adverse opinion?

Question 12 When engaged to compile the financial statements of a nonpublic entity, an accountant is required to possess a level of knowledge of the entity's accounting principles and practices.

This requirement most likely will include obtaining a general understanding of the Question 13 When a qualified opinion results from a limitation on the scope of the audit, the situation should be described in an explanatory paragraph Question 14 The standard report issued by an accountant after reviewing the financial statements of a nonpublic entity states that Question 15 Which of the following phrases would an auditor most likely include in the auditor's report when expressing a qualified opinion because of inadequate disclosure?

Question 16 A client has capitalizable leases but refuses to capitalize them in the financial statements. Which of the following reporting options does an auditor have if the amounts pervasively distort the financial statements?

Question 17 Wolf is auditing an entity's compliance with requirements governing a major federal financial assistance program in accordance with Government Auditing Standards. Wolf detected noncompliance with requirements that have a material effect on the program.

Wolf's report on compliance should express Question 18 General Retailing, a nonissuer, has asked Ford, CPA, to compile its financial statements that omit substantially all disclosures

required by GAAP. Ford may comply with General's request provided the omission is clearly indicated in Ford's report and the Question 19 Moore, CPA, has been asked to issue a review report on the balance sheet of Dover Co., a nonpublic entity. Moore will not be reporting on Dover's statements of income, retained earnings, and cash flows.

Moore may issue the review report provided the Question 20 Reporting standards for financial audits under Government Auditing Standards (the Yellow Book) differ from reporting under generally accepted auditing standards in that Government Auditing Standards require the auditor to --------------------------------------------------------------------------

ACC 576 Week 5 Quiz (All Possible Questions)

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This Tutorial contains More than 150 Question Test Bank (we have listed some of the Questions below) Week 5 Quiz Question 1 An accountant's compilation report on a financial forecast should include a statement that the Question 2 When a CPA examines a client's projected financial statements, the CPA's report should Question 3

At a confidential meeting, an audit client informed a CPA about the client's illegal insider-trading actions. A year later, the CPA was subpoenaed to appear in federal court to testify in a criminal trial against the client. The CPA was asked to testify to the meeting between the CPA and the client.

After receiving immunity, the CPA should do which of the following?

Question 4 (NOTE: This is a CPAexcel simulated Exam Question, not AICPA licensed Material) XYZ Corporation is having financial difficulties. Its CFO has ordered subordinates to pump up revenues artificially and hide that fact from the external auditor. If an internal auditor of XYZ intentionally misleads XYZ's outsider auditor from the ABC Accounting firm, the internal auditor has: Question 5 (AICPA.080962REG-1B) (NOTE: This is a CPAexcel simulated Exam Question, not AICPA licensed Material) Duncan, an accounting firm, is auditing Alchemy Inc. Regarding commissions and referral fees, which of the following arrangements would be permissible?

Question 6 A CPA who is not in public practice is obligated to follow which of the following rules of conduct?

Question 7 Under the Statements on Standards for Consulting Services, which of the following statements best reflects a CPA's responsibility when undertaking a consulting services engagement?

The CPA must Question 8 Under the Code of Professional Conduct of the AICPA, which of the following is required to be independent in fact and appearance when discharging professional responsibilities?

Question 9

Locke, CPA, was engaged to perform an audit for Vorst Co. During the audit, Locke discovered that Vorst's inventory contained stolen goods. Vorst was indicted and Locke was validly subpoenaed to testify at the criminal trial. Vorst has claimed accountant-client privilege to prevent Locke from testifying.

Locke may be compelled to testify Question 10 (NOTE: This is a CPAexcel simulated Exam Question, not AICPA licensed Material) Ron is a partner in the Houston office of KPMG. A partner in Ron's office is the lead partner on the team that audits Midstream Pipeline, which operates intrastate oil and gas pipelines, but Ron is not on the engagement team. Which of the following scenarios represents an independence violation of the AICPA Code of Conduct?

Question 11 (NOTE: This is a CPAexcel simulated Exam Question, not AICPA licensed Material) The CPA firm, where Joanna is currently a tax partner, is auditing Bubbles Corp. in Austin. Her mother, Teresa, has been working as a receptionist for Bubbles for the last 30 years. Her best friend since grade school, Maggie, is currently serving as CFO at Bubbles. Joanna knows that her brother, Jonathan, sank most of his savings into a purchase of 6% of Bubbles outstanding stock, which he currently owns. Does Joanna have an independence issue?

Question 12 An accountant may accept an engagement to apply agreed-upon procedures to prospective financial statements provided that Question 13 (NOTE: This is a CPAexcel simulated Exam Question, not AICPA licensed Material) In order to preserve independence, the PCAOB requires: Question 14

According to the standards of the profession, which of the following activities would most likely not impair a CPA's independence?

Question 15 According to the standards of the profession, which of the following circumstances will prevent a CPA performing audit engagements from being independent?

Question 16 Which of the following is a term for an attest engagement in which a CPA assesses a client's commercial Internet site for predefined criteria that are designed to measure transaction integrity, information protection, and disclosure of business practices?

Question 17 A CPA in public practice is required to comply with the provisions of the Statements on Standards for Attestation Engagements (SSAE) when --------------------------------------------------------------------------

ACC 576 Week 6 Quiz (All Possible Questions)

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This Tutorial contains More than 150 Question Test Bank (we have listed some of the Questions below) ACC 576 Study Week 6

1. Which of the following did SOX NOT do to protect whistleblowers?

2. Dan provided original information to authorities regarding a securities fraud in his company. It led the SEC to impose penalties of $2 million. Which of the following is most likely to be Dan's award under Dodd-Frank?

3. Which of the following is necessary to be an audit committee financial expert, according to the criteria specified in the Sarbanes-Oxley Act of 2002?

4. Which of the following did Dodd-Frank do regarding a whistleblower's right to sue for retaliation accorded by SOX? 5. A public company audit committee's "financial expert" must have all of the following except: 6. Fang provided original information to authorities regarding a securities fraud in his company. The information led to an imposition of penalties of $500,000. It also led to Fang being fired in retaliation by his public company employer.

Which of the following is true?

7. Public company audit committees must contain which of the following?

8. Under SOX, it is a crime to punish a public company whistleblower who provides truthful information relating to which of the following: 9. Mar has been complicit in her public company's accounting fraud. She consults a lawyer as the time comes to file her firm's 10-K with the SEC. She is a little uncomfortable with what she might have to do. The lawyer will likely tell her that she will have to certify (and be potentially criminally liable for lying about) these matters: 10.

Milo Corp. maintains daily backups of its accounting system in a fireproof vault in the file library. Weekly, monthly, and annual backups are stored in a secure, fireproof vault at an off-site location.

11.

Maintenance of the backup files is an example of

12.

Review of the audit (also called transaction) log is an example of which of the following types of security control?

13.

Which of the following statements presents an example of a general control for a computerized system?

14.

Controls in the information technology area are classified into the categories of preventive, detective, and corrective. Which of the following is a preventive control?

15.

A company's new time clock process requires hourly employees to select an identification number and then choose the clock-in or clock-out button. A video camera captures an image of the employee using the system. Which of the following exposures can the new system be expected to change the least?

16.

Which of the following is an example of a detective control?

17.

In the COSO "cube" model, each of the following is a control objective except 18.

In the COSO "cube" model, this component of internal control enables an organization's people to identify, process, and exchange the information needed to manage and control operations.

19.

This component of internal control concerns the policies and procedures that ensure that actions are taken to address the risks related to the achievement of management's objectives.

20.

This fundamental component of internal control is the core or foundation of any system of internal control.

21.

This component of internal control concerns testing the system and its data.

22.

According to COSO, which of the following is a compliance objective?

23.

This is the process of identifying, analyzing, and managing the risks involved in achieving the organization's objectives.

24.

In the COSO (2011) "cube" model, each of the following are components of internal control except 25.

According to the 17 COSO control principles, risk reduction primarily relates to which fundamental component of internal control: 26.

According to the 17 COSO control principles, establishing a whistle-blower hot line contributes to: 27.

According to the 17 COSO control principles, information quality primarily relates to which fundamental component of internal control: 28.

According to the 17 COSO control principles, organizational objectives primarily relate to which fundamental component of internal control: 29.

According to the 17 COSO control principles, addressing control deficiencies primarily relates to which fundamental component of internal control: 30.

According to the 17 COSO control principles, change management primarily relates to which fundamental component of internal control: 31.

According to the 17 COSO control principles, fraud primarily relates to which fundamental component of internal control: 32.

The original COSO model has _____ control components, while the COSO ERM model has _____ control components.

33.

Strategic, operations, reporting, and compliance objectives are a part of which of the following models of internal control?

34.

Which of the following items is one of the eight components of COSO's enterprise risk management framework?

35.

Which component of the COSO ERM framework is concerned with management's decision to avoid, accept, reduce, or share risk and to develop a set of actions to align risk with the entity's risk preferences?

36.

Activities that can be useful in monitoring control system effectiveness include all of the following except 37.

The goals of risk management include: 38.

According to COSO, which of the following is the most effective method to transmit a message of ethical behavior throughout an organization?

39.

Each of the following is a limitation of enterprise risk management (ERM) except 40.

Which of the following control activities should be taken to reduce the risk of incorrect processing in a newly installed computerized accounting system?

41.

Recognizing potential impediments to communication between system user and system designer can be useful in 42.

A senior executive of an international organization who wishes to demonstrate the importance of the security of company information to all team members should 43.

In which of the following organizations might segregation of duties be easiest to achieve?

44.

A manufacturing firm noted that it would have difficulty sourcing raw materials locally, so it decided to relocate its production facilities. According to COSO, this decision represents which of the following responses to the risk?

45.

Which of the following is most useful when risk is being prioritized?

46.

According to COSO, the two primary attributes of effective evaluators are 47.

Which of the following are reasons that internal controls need to be monitored?

48.

Which of the following is the best definition of a compensating control?

49.

Within the COSO Internal Control-Integrated Framework, which of the following components is designed to ensure that internal controls continue to operate effectively?

50.

According to COSO, an effective approach to monitoring internal control involves each of the following steps,except 51.

According to COSO, the use of ongoing and separate evaluations to identify and address changes in internal control effectiveness can best be accomplished in which of the following stages of the monitoring-for-change continuum?

52.

Internal control monitoring is considered 53.

Which of the following is not a major step in the COSO model of control monitoring?

54.

In a large public corporation, evaluating internal control procedures should be the responsibility of 55.

The system of internal control begins with 56.

The IIA's International Professional Practices Framework includes among its "mandatory" guidance each of the following elements except 57.

One of the Rules of Conduct in the IIA's Code of Ethics states, "Internal auditors shall perform internal audit services in accordance with the International Standards for the Professional Practice of Internal Auditing." To which Principle of the Code of Ethics does this Rule of Conduct relate?

58.

The IIA's Code of Ethics identifies four "Principles" around which the 12 Rules of Conduct are organized. Each of the following key words or phrases is associated with these Principles except 59.

What term identifies the type of internal auditing standards used to measure the quality of the internal auditor's conduct in delivering internal audit services?

60.

What term identifies the type of internal auditing standards used to describe the characteristics associated with organizations and individuals who provide internal audit services?

61.

The IIA's Definition of Internal Auditing specifically mentions each of the following terms among the organizational objectives to be improved by internal auditing except 62.

What term is used in the IIA's International Standards to identify the person responsible for managing an organization's internal audit activity?

63.

The Attribute Standards related to an internal audit activity's --------------------------------------------------------------------------

ACC 576 Week 7 Assignment 1 Economic and Monetary Policy

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ACC 576 Week 7 Assignment 1 Assignment 1: Economic and Monetary Policy Using the Internet and Library, research the economies and monetary policies of two (2) countries.

Write a four to five (4-5) page paper in which you: Choose one (1) of the two (2) countries that you have researched, and give your opinion on the degree to which the chosen country manages its economy and monetary policy well. Provide support for your opinion.

Compare and contrast the economies and monetary policies of the two (2) countries that you have researched. Make at least two (2)

recommendations as to the primary manner in which both countries could improve their economy and / or monetary policies.

Analyze the impact that economic and monetary policies of one (1) of the chosen countries currently exerts upon its trade with other countries. Make at least two (2) recommendations as to changes that the chosen country should make to its policies to benefit its foreign trade.

Propose one (1) alternative economic and monetary policy that would make one (1) of the chosen countries stronger over the longer term. Support your proposal with anticipated outcomes related to the selected alternative policy.

Use at least three (3) quality academic resources in this assignment. Note: Wikipedia and other Websites do not quality as academic resources.

Your assignment must follow these formatting requirements: Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.

Include a cover page containing the title of the assignment, your name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are: Analyze domestic microeconomic and macroeconomic principles that impact businesses.

Analyze international economics and its impact on businesses, globalization, and business strategy.

Use technology and information resources to research issues in business law and tax.

Write clearly and concisely about business law and tax using proper writing mechanics.

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ACC 576 Week 7 Quiz (All Possible Questions)

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ACC 576 Week 7 Study 1. A management accountant performed a linear regression of maintenance cost vs. production using a computer spreadsheet. The regression output shows an "intercept" value of $322,897. How should the accountant interpret this information?

2. The equation for the graphic plot of a linear economic variable is D = b + m(a). Which of the following represents the value of the "intercept"?

3. Which of the following statements regarding the use of graphs to depict economic relationships is not correct?

4. Graphs are a means of depicting the relationship between two variables. These variables are usually identified as 5. The equation for the graphic plot of a linear economic variable is D = b + m(a), where m > 0. Which of the following is the slope of the economic "curve" represented by this equation?

6. Measures of the economic activity of an entire nation would be included in the study of 7. The free-market economy flow model depicts four major interrelated flows:I . Individuals provide economic resources to business firms.II. Firms provide payment to individuals for economic resources.III. Firms provide goods and services to individuals.IV. Individuals provide payment to firms for goods and services.

8. If the cost of imported oil declined suddenly and significantly, which one of the above flows would be most likely to be the first impacted?

9. The free-market economy flow model depicts four major interrelated flows:I . Individuals provide economic resources to business firms.II. Firms provide payment to individuals for economic resources.III. Firms provide goods and services to individuals.IV. Individuals provide payment to firms for goods and services.

10.

If financial institutions and businesses suddenly and severely restrict the availability of consumer credit, which one of the above flows would be most likely to be the first to be impacted adversely?

11.

Which of the following are considered economic resources?

12.

In a free-market economy, which of the following should be the least significant factor in determining resource allocation and use?

13.

Which of the following is not a characteristic of a freemarket economy?

14.

The demand for a commodity would increase when the price of a 15.

When a demand schedule is plotted on a graph, the resulting demand curve will be 16.

In the statement "quantity demanded is a function of price," are the variables quantity and price dependent or independent variables?

17.

The demand curve for a product reflects which of the following?

18.

If there is an increase in the income of market participants, which of the following is most likely to happen to the demand for normal goods?

19.

Which one of the following would not cause an increase in demand for a commodity?

20.

Concurrent with a significant downturn in the economy, the sale of Scope's high-end electronics decreased dramatically. Which of the following is the most likely direct cause of the decline in demand for Scope's products?

21.

Which one of the following factors would not cause an increase in the supply curve of a commodity?

22.

A supply schedule (or supply curve) shows the relationship between the quantity of a commodity that will be supplied during a period of time and 23.

If a change in market variables causes a supply curve to shift inward, which one of the following will occur?

24.

When the cost of input factors to the production process increases, which one of the following will occur?

25.

In the statement "quantity supplied is a function of price," are the variables quantity and price dependent or independent variables?

26.

An increase in taxes on cigarette production would cause which one of the following to occur?

27.

What is the effect on the quantity of a commodity supplied relative to demand as a result of a governmentmandated price ceiling or price floor?

28.

A city ordinance that establishes a price ceiling on rent may cause 29.

If both demand and supply have traditional curves, a higher equilibrium price may be caused by which one of the following?

30.

If the price for a good is fixed by government fiat below market equilibrium price, which one of the following will occur?

31.

A price ceiling that is below the market equilibrium price would be expected to result in which one of the following sets of effects on demand and supply?

32.

Which of the following characteristics would indicate that an item sold would have a high price elasticity of demand?

33.

An increase in the price of Commodity Y from $50 to $60 resulted in an increase in the quantity supplied, from 80 units to 88 units. Which one of the following is the price elasticity of supply?

34.

A company has a policy of frequently cutting prices to increase sales. Product demand is significantly elastic. What impact would this have on the company's situation?

35.

If demand for a product is elastic, what would be the effect of a price increase and a price decrease on total revenue (TR) generated?

36.

In which of the following situations would there be inelastic demand?

37.

The elasticity of demand is measured by 38.

A 4% increase in the market price of Commodity X resulted in an 8% increase in the quantity of Commodity X supplied. Which one of the following statements is correct?

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ACC 576 Week 8 Quiz (All Possible Questions)

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This Tutorial contains More than 150 Question Test Bank (we have listed all Questions below) ACC 576 Week 8 Quiz (All Possible Questions) ACC 576 Week 8 Study

1. Regarding financial resources, financial management is concerned with the efficiency and effectiveness of which of the following?

2. Which of the following financial management-related areas are considered long-term issues?

3. Which one of the following would be considered a longterm financial management activity or concern?

4. Financial management involves decisions and activities that deal with 5. Which of the following "tools" are likely to be used in financial management?

6. A company has the following target capital structure and costs:The company's marginal tax rate is 30%. What is the company's weighted-average cost of capital?

7. A company has the following financial information: To maximize shareholder wealth, the company should accept projects with returns greater than what percent?

8. The measurement of the benefit lost by using resources for one purpose and not another is 9. Which of the following statements is correct regarding the weighted-average cost of capital (WACC)?

10.

Carter Co. paid $1,000,000 for land three years ago.

Carter estimates it can sell the land for $1,200,000, net of selling costs. If the land is not sold, Carter plans to develop the land at a cost of $1,500,000. Carter estimates net cash flow from the development in the first year of operations would be $500,000. What is Carter's opportunity cost of the development?

11.

A company with a combined federal and state tax rate of 30% has the following capital structure:What is the weighted-average after-tax cost of capital for this company?

12.

Which of the following is assigned to goods that were either purchased or manufactured for resale?

13.

Management at MDK Corp. is deciding whether to replace a delivery van. A new delivery van costing $40,000

can be purchased to replace the existing delivery van, which cost the company $30,000 and has accumulated depreciation of $20,000. An employee of MDK has offered $12,000 for the old delivery van. Ignoring income taxes, which of the following correctly states relevant costs when making the decision whether to replace the delivery vehicle?

14.

Alpha Corporation has the following capital structure and related cost of capital for each source: Which one of the following is Alpha's weighted average cost of capital?

15.

A company uses its company-wide cost of capital to evaluate new capital investments. What is the implication of this policy when the company has multiple operating divisions, each having unique risk attributes and capital costs?

16.

Which one of the following costs, if any, is relevant in making financial decisions?

17.

Buff Co. is considering replacing an old machine with a new machine. Which of the following items is economically relevant to Buff's decision? (Ignore income tax considerations.)

18.

The ABC Company is trying to decide between keeping an existing machine and replacing it with a new machine. The old machine was purchased just two years ago for $50,000 and had an expected life of 10 years. It now costs $1,000 a month for maintenance and repairs, due to a mechanical problem. A new replacement machine is being considered, with a cost of $60,000. The new machine is more efficient and it will only cost $200 a month for maintenance and repairs. The new machine has an expected life of 10 years. In deciding to replace the old machine, which of the following factors, ignoring income taxes, should ABC not consider?

19.

Egan Co. owns land that could be developed in the future. Egan estimates it can sell the land for $1,200,000, net of all selling costs. If it is not sold, Egan will continue with

its plans to develop the land. As Egan evaluates it options for development or sale of the property, what type of cost would the potential selling price represent in Egan's decision?

20.

Which of the following statements is true regarding opportunity cost?

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ACC 576 Week 9 Quiz (All Possible Questions)

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This Tutorial contains More than 150 Question Test Bank (we have listed all Questions below) ACC 576 Week 9 Quiz (All Possible Questions) ACC 576 Week 9 Study 1. Checkpoint auto leasing is a small company with six employees. The best action that it can take to increase its internal control effectiveness is 2. Morgan Property Management, Inc. recently switched from a manual accounting system to a computerized accounting system. The system supports online real-time processing in a networked environment, and six employees have been granted access to various parts of the system in order to perform their jobs. Relative to the manual system, Morgan can expect to see 3. Which of the following statements is (are) true. I.A greater level of control is necessary in automated than manual

systems. II. The uniformity of transaction processing is higher in automated than manual systems.

4. In COBIT, the process of identifying automated solutions falls within the ________ control process domain.

5. In COBIT, the process of reviewing system response time logs falls within the _______ control process domain.

6. In COBIT, the process of developing tactics to realize the strategic vision for IT falls within the _________ control process domain.

7. In COBIT, the process of ensuring security and continuous service falls within the _______ control process domain.

8. One important purpose of COBIT is to 9. Which of the following is true of enterprise resource planning (ERP) systems? I. The online analytical processing system (OLAP) provides data warehouse capabilities for the ERP system. II. The ability of an ERP system to provide an integrated view of transactions in all parts of the system is a function of the online transaction processing (OLTP) system.

10.

An enterprise resource planning (ERP) system has which of the following advantages over multiple independent functional systems?

11.

The fixed assets and related depreciation of a company are currently tracked on a password-protected spreadsheet.

The information technology governance committee is designing a new enterprise-wide system and needs to determine whether the current fixed asset process should be included because the current system seems to be working properly. What long-term solution should the committee recommend?

12.

What is an example of the use of the cloud to access software and programs?

13.

Credit Card International developed a management reporting software package that enables members interactively to query a data warehouse and drill down into transaction and trend information via various network set-

ups. What type of management reporting system has Credit Card International developed?

14.

A client would like to implement a management information system that integrates all functional areas within an organization to allow information exchange and collaboration among all parties involved in business operations. Which of the following systems is most effective for this application?

15.

What is an example of the use of the cloud to create software and programs?

16.

An enterprise resource planning system is designed to 17.

Which of the following risks increases the least with cloud-based computing compared with local server storage for an organization that implements cloud-based computing?

18.

What is an example of the use of the cloud to access hardware?

19.

An information technology director collected the names and locations of key vendors, current hardware configuration, names of team members, and an alternative processing location. What is the director most likely preparing?

20.

Bacchus, Inc. is a large multinational corporation with various business units around the world. After a fire destroyed the corporate headquarters and largest manufacturing site, plans for which of the following would help Bacchus ensure a timely recovery?

21.

In an e-commerce environment that requires that the information technology (IT) system be available on a continuous basis, more emphasis will be placed on which of the following aspects of the planning than in a traditional organization?

22.

A controller is developing a disaster recovery plan for a corporation's computer systems. In the event of a disaster that makes the company's facilities unusable, the controller has arranged for the use of an alternate location and the

delivery of duplicate computer hardware to this alternate location. Which of the following recovery plans would best describe this arrangement?

23.

The performance audit report of an information technology department indicated that the department lacked a disaster recovery plan. Which of the following steps should management take first to correct this condition?

24.

Which of the following tasks comes first in business continuity management (BCM)?

25.

In DRP, the lowest priority is given to which activities?

26.

Which of the following terms refers to a site that has been identified and maintained by the organization as a data processing disaster recovery site, but has not been stocked with equipment?

27.

In DRP, top priority is given to which activities?

28.

To maintain effective segregation of duties within the information technology function, an application programmer should have which of the following responsibilities?

29.

In business information systems, the term "stakeholder" refers to which of the following parties?

30.

In a large multinational organization, which of the following job responsibilities should be assigned to the network administrator?

31.

IT people controls are mostly 32.

What is the role of the systems analyst in an IT environment?

33.

The position responsible for managing the flow of documents and reports in and out of the computer operations department is the 34.

Which of the following information technology (IT) departmental responsibilities should be delegated to separate individuals?

35.

Who is responsible for granting users access to specific data resources?

36.

When a client's accounts payable computer system was relocated, the administrator provided support through a dialup connection to a server. Subsequently, the administrator left the company. No changes were made to the accounts payable system at that time. Which of the following situations represents the greatest security risk?

37.

In a large firm, the custody of an entity's data is most appropriately maintained by which of the following personnel?

38.

In which of the following stages of computer system development would training occur?

39.

Which of the following roles is responsible for prioritizing systems development proposals?

40.

At this stage, we purchase hardware: 41.

Which of the following is responsible for overall program logic and functionality?

42.

Data conversion occurs at this stage: 43.

Which of the following implementation approaches has been described as "sink or swim?"

44.

Which of the following is responsible for identifying problems and proposing initial solutions?

45.

Which of the following is responsible for designing, creating, and testing programs?

46.

In which of the following implementation approaches is the system divided into modules for implementation?

47.

In which of the following implementation approaches do the new and old systems run concurrently until it is clear that the new system is working properly?

48.

In which of the following implementation approaches are users divided into smaller groups and trained on the new system, one group at a time?

49.

The requirements definition document is signed at this stage:

50.

In a small business with only microcomputers, which documentation would be most useful to an untrained user to learn how to correct data errors in a database application?

51.

Rose and McMullin, a regional public accounting firm, has recently accepted a contract to audit On-the-Spot, Inc., a mobile vending service that provides vending machines for large events. On-the-Spot uses a computerized accounting system, portions of which were developed internally to integrate with a standard financial reporting system that was purchased from a consultant. What type of documentation will be most useful to Rose and McMullin in determining how the system as a whole is constructed?

52.

Which of the following types of documentation would a computer operator use to determine how to set up and run a specific computer application.

53.

Management of a company has a lack of segregation of duties within the application environment, with programmers having access to development and production.

The programmers have the ability to implement application code changes into production without monitoring or a quality assurance function. This is considered a deficiency in which of the following areas?

54.

After changes to a source program have been made and verified, it moves to 55.

Which of the following controls in not usually found in batch processing systems?

56.

Which of the following is considered an application input control?

57.

An employee mistakenly enters April 31 in the date field. Which of the following programmed edit checks offers the best solution for detecting this error?

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ACC 576 Week 10 Quiz (All Possible Questions)

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This Tutorial contains More than 150 Question Test Bank (we have listed all Questions below) ACC 576 Week 10 Quiz (All Possible Questions) ACC 576 Week 10 Study 1. Wages earned by machine operators in producing the firm's product should be categorized as 2. Which of the following is assigned to goods that were either purchased or manufactured for resale?

3. In a traditional job order cost system, the issue of indirect materials to a production department increases 4. The accountant for Champion Brake, Inc. applies overhead based on machine hours. The budgeted overhead and machine hours for the year are $260,000 and 16,000, respectively. The actual overhead and machine hours incurred were $275,000 and 20,000. The cost of goods sold and inventory data compiled for the year is as follows: Direct Materials $ 50,000, COGS 450,000, WIP (units) 100,000, Finished Goods (units) 150,000. What is the amount of over/under applied overhead for the year?

5. If a product required a great deal of electricity to produce, and crude oil prices increased, which of the following costs most likely increased?

6. Fab Co. manufactures textiles. Among Fab's 2004 manufacturing costs were the following salaries and wages: Loom operators $120,000, Factory foremen 45,000,

Machine mechanics 30,000. What was the amount of Fab's 2004 direct labor?

7. In a process cost system, the application of factory overhead usually would be recorded as an increase in 8. Jonathan Mfg. adopted a job-costing system. For the current year, budgeted cost driver activity levels for direct labor hours and direct labor costs were 20,000 and $100,000, respectively. In addition, budgeted variable and fixed factory overheads were $50,000 and $25,000, respectively. The actual costs and hours for the year were as follows: Direct labor hours 21,000, Direct labor costs $110,000, Machine hours 35,000. For a particular job, 1,500 direct labor hours were used. Using direct labor hours as the cost driver, what amount of overhead should be applied to this job?

9. Indirect labor is a 10.

Hoyt Co. manufactured the following units: Saleable 5,000, Unsalable (normal spoilage) 200, Unsalable (abnormal spoilage) 300, the manufacturing cost totaled $99,000. What amount should Hoyt debit to finished goods?

11.

In the past, four direct labor hours were required to produce each unit of product Y. Material costs were $200 per unit, the direct labor rate was $20 per hour, and factory overhead was three times the direct labor cost. In budgeting for next year, management is planning to outsource some manufacturing activities and to further automate others.

Management estimates that these plans will reduce labor hours by 25%, increase the factory overhead rate to 3.6 times the direct labor costs, and increase material costs by $30 per unit. Management plans to manufacture 10,000 units.

What amount should management budget for the cost of goods manufactured?

12.

During the month of March 2005, Nale Co. used $300,000 of direct materials. On March 31, 2005, Nale's direct materials inventory was $50,000 more than it was on

March 1, 2005. Direct material purchases during the month of March 2005 amounted to 13.

Based on the following data, what is the gross profit for the company? Sales $1,000,000, Net purchases of raw materials 600,000, Cost of goods manufactured 800,000, Marketing and administrative expenses 250,000, Indirect manufacturing costs 500,000.

14.

On January 1 Maples had two jobs in process: #506 with assigned costs of $10,500 and #507 with assigned costs of $14,250. During January three new jobs, #508 through #510, were started and three jobs, #506, #507, and #508, were completed. Materials and labor costs added during January were as follows: Manufacturing overhead is assigned at the rate of 200 percent of labor. What is the January cost of goods manufactured and transferred from work-in-process?

15.

In June, Delta Co. experienced scrap, normal spoilage, and abnormal spoilage in its manufacturing process. The cost of units produced includes 16.

In its April 2005 production, Hern Corp., which does not use a standard cost system, incurred total production costs of $900,000, of which Hern attributed $60,000 to normal spoilage and $30,000 to abnormal spoilage. Hern should account for this spoilage as 17.

Mat Co. estimated its material handling costs at two activity levels as follows: What is Mat's estimated cost for handling 75,000 kilos?

18.

When using a flexible budget, a decrease in production levels within a relevant range 19.

A delivery company is implementing a system to compare the costs of purchasing and operating different vehicles in its fleet. Truck 415 is driven 125,000 miles per year at a variable cost of $0.13 per mile. Truck 415 has a capacity of 28,000 pounds and delivers 250 full loads per year. What amount is the truck's delivery cost per pound?

20.

Sender, Inc. estimates parcel mailing costs using the data shown on the chart below. What is Sender's estimated cost for mailing 12,000 parcels?

21.

When production levels are expected to increase within a relevant range, and a flexible budget is used, what effect would be anticipated with respect to each of the following costs?

22.

Day Mail Order Co. applied the high-low method of cost estimation to customer order data for the first 4 months of 2005. What is the estimated variable order filling cost component per order?

23.

When production levels are expected to decline within a relevant range, and a flexible budget is used, what effect would be anticipated with respect to each of the following?

24.

In an activity-based costing system, cost reduction is accomplished by identifying and eliminating 25.

Book Co. uses the activity-based costing approach for cost allocation and product costing purposes. Printing, cutting, and binding functions make up the manufacturing process. Machinery and equipment are arranged in operating cells that produce a complete product starting with raw materials. Which of the following are characteristic of Book's activity-based costing approach? I. Cost drivers are used as a basis for cost allocation. II. Costs are accumulated by department or function for the purposes of product costing. III. Activities that do not add value to the product are identified and reduced to the extent possible.

26.

What is the normal effect on the numbers of cost pools and allocation bases when an activity-based cost (ABC) system replaces a traditional cost system?

27.

In an activity-based costing system, what should be used to assign a department's manufacturing overhead costs to products produced in varying lot sizes?

28.

Gram Co. develops computer programs to meet customers' special requirements. How should Gram

categorize payments to employees who develop these programs?

29.

Where one part of an organization provides an essential business process where previously it had been provided by multiple parts of that same organization, this is called 30.

Which of the following items often provides a significant risk with off-shore operations?

31.

A manufacturing company has several product lines.

Traditionally, it has allocated manufacturing overhead costs between product lines based on total machine hours for each product line. Under a new activity-based costing system, which of the following overhead costs would be most likely to have a new cost driver assigned to it?

32.

Nile Co.'s cost allocation and product costing procedures follow activity-based costing principles.

Activities have been identified and classified as being either value-adding or nonvalue-adding as to each product. Which of the following activities, used in Nile's production process, is nonvalue-adding?

33.

Which of the following items is a process management approach that involves radical change?

34.

In an income statement prepared as an internal report using the direct (variable) costing method, fixed selling and administrative expenses would 35.

The absorption costing method includes in work in process and finished goods inventories: 36.

In an income statement prepared as an internal report using the direct (variable) costing method, fixed selling and administrative expenses would 37.

Cay Co.'s 2005 fixed manufacturing overhead costs totaled $100,000, and variable selling costs totaled $80,000.

Under direct costing, how should these costs be classified?

38.

Using the variable costing method, which of the following costs are assigned to inventory?

39.

A manufacturing company prepares income statements using both absorption and variable costing methods. At the end of a period, actual sales revenues, total gross profit, and total contribution margin approximated budgeted figures, whereas income was substantially greater than the budgeted amount. There was no beginning or ending inventories. The most likely explanation of the income increase is that, compared to budget, actual 40.

Which of the following statements is correct regarding the difference between the absorption costing and variable costing methods?

41.

A manufacturing company prepares income statements using both absorption and variable costing methods. At the end of a period, actual sales revenues, total gross profit, and total contribution margin approximated the budgeted figures, whereas income was substantially below the budgeted amount. There was no beginning or ending inventories. The most likely explanation for the income shortfall is that, compared to budget, actual 42.

A single-product company prepares income statements using both absorption and variable costing methods.

Manufacturing overhead cost applied per unit produced in 2005 was the same as in 2004. The 2005 variable costing statement reported a profit, whereas the 2005 absorption costing statement reported a loss. The difference in reported income could be explained by the units produced in 2005 being 43.

At the end of Killo Co.'s first year of operations, 1,000 units of inventory remained on hand. Variable and fixed manufacturing costs per unit were $90 and $20, respectively.

If Killo uses absorption costing rather than direct (variable) costing, the result would be a higher pretax income of 44.

Lynn Manufacturing Co. prepares income statements using both standard absorption and standard variable costing methods. For 2005, unit standard costs were unchanged

from 2004. In 2005, the only beginning and ending inventories were finished goods of 5,000 units. How would Lynn's ratios using absorption costing compare with those using variable costing?

45.

A direct labor overtime premium should be charged to a specific job when the overtime is caused by the 46.

In a job cost system, manufacturing overhead is 47.

Birk Co. uses a job order cost system. The following debits (credits) appeared in Birk's work in process account for the month of April 2005: Birk applies overhead to production at a predetermined rate of 80% of the direct labor cost. Job No. 5, the only job still in process on April 30, 2005, was charged with direct labor of $2,000. What was the amount of direct materials charged to Job No. 5?

47.

48.

A job order cost system uses a predetermined factory overhead rate based on expected volume and expected fixed cost. At the end of the year, under applied overhead might be explained by which of the following situations?

49.

A standard cost system may be used in 50.

During the current year, the following manufacturing activity took place for a company's products: Beginning work in process: 10,000 units, 70% complete, Units started into production during the year: 150,000 units, Units completed during the year: 140,000 units, Ending work in process: 20,000 units, 25% complete. What was the number of equivalent units produced using the first-in, first-out method?

51.

Yarn Co.'s inventories in process were at the following stages of completion on April 30, 2004: 52.

The forming department is the first of a two-stage production process. Spoilage is identified when the units have completed the forming process. The costs of spoiled units are assigned to units completed and transferred to the second department in the period when spoilage is identified.

The following information concerns forming's conversion costs in May 2005: Using the weighted average method, what was forming's conversion cost transferred to the second production department?

53.

Weighted average and first in, first out (FIFO) equivalent units would be the same in a period when which of the following occurs?

54.

In computing the current period's manufacturing cost per equivalent unit, the FIFO method of process costing considers current period costs 55.

Black, Inc. employs a weighted average method in its process costing system. Black's work in process inventory on June 30 consists of 40,000 units. These units are 100% complete with respect to materials and 60% complete with respect to conversion costs. The equivalent unit costs are $5.00 for materials and $7.00 for conversion costs. What is the total cost of the June 30 work in process inventory?

56.

A process costing system was used for a department that began operations in January 2005. Approximately the same number of physical units, at the same degree of completion, were in work in process at the end of both January and February. Monthly conversion costs are allocated between ending work in process and units completed. Compared to the FIFO method, would the weighted average method use the same or a greater number of equivalent units to calculate the monthly allocations?

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