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is easily traceable to a cost object?

fined

slcest

vatiable

indirect

How are the three financial statements income statement, balance sheet, and cashflowstatement) inked?

‘The netincome goes to retained earrings, butthe cashflow remainsindependent.

The netincome goest retained earrings and tothe cashflowstatement.

(Only the assets are reflectedin the cashflow statement, andthe net income expenses cocelate with the ables.

‘The gross profit goes to retained earnings, and shareholder equity totalis added tothe cash flow statement.

Internal controls may be preventive, detective, corecive, or directive, Which sa detective contol?

employes background checks

hysical locksoninventory warehouse

physicainventory chase

data backups

‘What type of audit evidence would be consideredthe weakesttype?

documentary evidence

' confirmation

oral evidence

physicalexamination

If Company A has anet profit margin of 69% and Company Bhasa net profit margin of 40% whatcan you conclude?

Company Bis moreprofitable than Company A.

Company Ais mare proftable than Company 8.

Company A hashighersales compared to Company B.

Company B has higher sales compared to Company A

Which is an example of unstructured data?

video

phone numbers

dates

“The cost ofalternative X is $25,000 and the costof alternative Vis $20,000, What do you call the $5,000 cost difference?

additional cost

sunk cost

differential cost

essential cost

Which value chain element is associatedwith the costof staffing a customer support phone line?

design

production and purchases

customerservice

distribution

At Mekay C Shine he limite.

for McKay's products‘maximize profits, the company should evaluate eachproduct's

‘ross profit per unit

contribution margin per unit

segment margin per unit

ution margin per machine hour

‘Whattype of audit evidence would be used to indicate that accountsreceivable balances are correct?

reperformance

oral evidence

physical examination

confirmation

Whodoes an audit committee report to?

union or employee representatives

board of directors

external auditors

senior management

What is an example of qualitative data?

temperature

price

personality

height

Which statement bout current labiltiesi true?

Current lables should be included under long-term liabilities

Currentlables are obligations owed over5 years.

Current bitesare obligations owed ater 8 12-month period

Current abilitiesare obligations duewithin a year

What do you cal the benefit sacrificed when one option is chosen over another?

indirectcost

sunk cost

opportunity cost

differential cost

\What happens when one person is responsible fr the actives ofordering, receiving. and payingfor inventory?

Ie reduces overall costs and maximizes profitability.

Ie increases the potentialfrfraud and eros.

it decreases the potential for fraud and eros

itis an appropriate examplefor properintemal controls

Wihat doesthe discontinued operations section oftheincome statement referto?

2 plant shutdown or decommissioning ofafaclity

disposal ofa major productine or majorgeographical area ofoperations

netincome or loss for products completed and sold

sale of unused or obsolete equipmentand discontinued inventory

‘What doesthe cost ofa unit af product under absorption costing method consist of?

direct materials, direct and indirect laborand variable overhead

direct material, indict labor, and variable and fixed overhead

direct materss, direct and indirect aber, and fixed overhead

direct materials, direct labor, and both variable and fixed overhead

‘What isthe term fora category or collection of business management software that an organization can use tocollect, store, manage, and interpret datafrommany business activities?

{customerrelationship management (CRM)

| enterprise resourceplanning (ERP)

| business intelligence (2)

| general ledger(GL)

‘A human resources department within a national retaileris what type of responsibiltycenter?

cost center

investment center

profit center

revenue center

Which is the appropriate term foranincurred costthat cannot be changed by any decision?

‘opportunity cost

sunk cost

variable cost

previous cost

‘An employee who makes a sale shipsthe goods andbill the customer vilates which controlactivity?

segregationof duties

audit verification

review and reconcliation

assignment of responsiblity

What type of audit evidence would most kel be usedto verity the existenceof fixed asses?

) documentary idence

oral evidence

confirmation

physical examination

Whatinformation doesanincome statement provide?

cash flow from operatingactivities, investing activities, and financingactivities

net income and the components of other comprehensive income

profitability information rel to revenues, expenses, and net income

information about thefinancial position reporting asses, liabilities, and equity

‘What does “independence” mean in auditing?

i) celles meumane ewpoket

rot sigati

retirement ofthe accounts receivable manager followed by the hiring of a replacement

charges filed against the company officers for paymentof a politicalbribe

payment fora fake invoice fora fictitious company submitted by an accounts payable clerk

discovery of a materialsale recorded inthe current year that belonged in the subsequent year

Wichitem would have the leat impact onthe content and extent ofaut documentation?

the risk assocated with the audit and procedures

the nature and extent of any problems identified

the specific autt procedures employed

the numberof partner hours budgeted forthe audit

Wihich is nt an example ofaninternalcontrol activity?

review of manufacturing plan

segregation of duties

bank reconciliations

approval process

‘What typeof audit evidence would most likely be used to verify the existence of fixed assets?

documentary evidence

physical examination

confirmation

oral evidence

Which budgeting approach requiresjustification forall expenditures?

| master budgeting

bottom-up budgeting

zero-basedbudgeting

rolling budgets

Which budgeting approach requiresjustification forall expenditures?

master budgeting

' bottom-up budgeting

' zeto-based budgeting

'rolling budgets

Direct labor variancescan bebroken down into which two categories?

rate and price variances

rate and usage variances

efficiency and price variances

efficiency and rate variances

A human resources department within a nationalretailer is what typeof responsibility center?

profit center

revenue center

cost center

investmentcenter

The cost of alternative X is $25,000 and the cost of alternative ¥ is $20,000, Whatdo youcall the $5,000 cost difference?

additionalcost

essential cost

sunk cost

differential cost

Whattype of audit evidence would be considered the weakest type?

physical examination

documentary evidence

confirmation

coral evidence

Which statement about current liabilitiesis true?

Current liabilities are obligations due within a year.

Current liabilities are obligations owed over5 years.

Current liabilities are obligations owed after a 12-month period.

Current liabilities should beincluded under long-term liabilities.

Which value chain elementis associated withthe costofstaffing a customer support phoneline?

customer service

distribution

design

production and purchases

‘What do youcall the benefit sacrificed when one optionis chosen over another?

indirect cost

‘opportunity cost

differential cost

sunk cost

At McKay Company, machine hours are limited, There is more demandfor McKay's products thanit can produce due to limitedmachine hours. To maximize profits, the company should evaluate each product's _.

gross profit per unit

segment margin per unit

contribution margin per unit

contribution margin per machine hour

Which is an example of unstructured data?

video

phone numbers

dates

names

Whattype ofaudit evidence would be used to indicate that accounts receivable balances are correct?

physical examination

oral evidence

confirmation

reperformance

What happens when one personis responsible forthe activities of ordering, receiving, and payingfor inventory?

It reduces overall costs and maximizes profitability

It increasesthe potentialfor fraud and errors.

It decreasesthe potential forfraud and errors.

Itis an appropriate example for proper internal controls.

Whodoes an audit committee report to?

board of directors

external auditors

union or employee representatives

senior management

If Company A has a net profit margin of 60% and Company B has a net profit margin of 40%, what can you conclude?

Company B has highersales compared to CompanyA.

Company B is more profitable than Company A.

Company A has higher sales compared to Company 8.

CompanyA is moreprofitable than CompanyB.

Whatcost is easily traceable to a cost object?

fixed

indirect

variable

direct

How arethe threefinancial statements (income statement, balance sheet, and cash flow statement) linked?

The netincome goes to retained earnings and to the cash flow statement.

Only the assets are reflected in the cashflowstatement, and the netincome expenses correlate with the liabilities.

The gross profit goesto retained earnings, and the shareholder equity total is added to the cashflow statement.

The netincome goesto retained earnings, butthe cashflow remains independent.

Internal controls may be preventive, detective, corrective, ordirective, Which is @ detective control?

‘employee background checks

physical locks oninventory warehouse

phy:

inventory check

data backups

Whatis an exampleof qualitative data?

V personality

) height

) temperature

) price

Whatis the term for a category or collection of business management software that an organization can use to collect, store,manage, andinterpretdata from many businessactivities?

general ledger (GL)

customerrelationship management (CRM)

enterprise resource planning (ERP)

businessintelligence (61)

Which statementis not an advantage of robotic process automation (RPA)?

Botsdo not need to taketime off.

Bots improve efficiency.

Bots can eliminate humanerrors.

Bots are more creative than humans.

‘Anemployee who makesa sale,ships the goods, and bills the customerviolates which control acti

audit ver

segregation of duties

review and reconciliation

assignmentofresponsibility

Whichis the appropriate term for an incurred cost that cannot be changedby any decision?

\ previous cost

} opportunity cost

' variable cost

' sunk cost

What does “independence” mean in auditing?

being an advocateforall clients

not being dependent on a client's fee

having only indirect financialinterests in the auditee

taking an unbiased viewpoint

‘Which event would not be considered significant audit finding that should be included in audit documentation?

paymentfor a fake invoice fora fictitious companysubmitted byan accounts payableclerk

discovery of a material sale recorded in the currentyearthat belonged in the subsequent year

retirement ofthe accounts receivable manager followed bythe hiring of a replacement

chargesfiled against the companyofficers for paymentofa political bribe

Whatinformation does an income statementprovide?

netincome and the components of other comprehensive income

cash flow from operating activities, investing activities, and financing activities

information aboutthefinancial position reporting assets,liabilities, and equity

profitability information related to revenues, expenses, and netincome

‘What doesthe cost ofa unit of product under absorption costing method consist of?

direct materials,direct and indirect labor, and variable overhead

direct materials,direct and indirect labor, and fixed overhead

direct materials,direct labor, and both variable and fixed overhead

direct materials, indirect labor, and variable andfixed overhead

Whatis the appropriate role ofintemal auditing in an organization?

to assist the external auditor so that audit feesare reduced and consulting fees are minimized

to serve asinvestigators and enforcers for the board of directors and the managementof the organization

to assessthe organization's control mechanismsforoverall efficiency and reliability

to perform an analysis of operations to maximize net profitsin all departments throughoutthe organization

Which is not an example of an internal control activity?

bank reconciliations

segregation of duties

approval process

review of manufacturing plan

Whateffect does a contra asset account have on a balance sheet?

A contra assetis not an accounting term,

A contra asset hasa credit balance and therefore a negative effect on total assets,

A contra asset with a positive balancewill increase overall liabilities.

A contra asset hasa debit balance andtherefore a positive effect on total assets.

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