bec flash cards
DESCRIPTION
CPATRANSCRIPT
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Q001.- 7 Principles of Control Environment
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A001.- Philosophy- Human resources- Reporting competencies- Authority and responsibility- Structure- Ethical Values- Directors
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Q002.- Objectives of ERM
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A002.- Strategic- High level goals designed to achieve themission- Operations- Achievement objectives through the effectiveand efficient use of resources- Reporting- Reliable reporting- Compliance- Ensuring compliance with laws andregulations
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Q003.- Components of ERM- Hint: IS EAR AIM
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A003.- Internal environment- Setting objectives- Event identification- Assessment of risk- Risk response- Activities (control)- Information and communication- Monitoring
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Q004.- The Internal Control Framework applies to _______;whereas ERM Framework applies to _________.
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A004.- Financial Reporting- Entity-wide Management
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Q005.- Internal Control Framework: Board of Directors principleattributes
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A005.- a. Operates independently- b. Monitors risk- c. Appoints audit committee- d. Oversees quality and reliability
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Q006.- Internal Control Framework: Organizational Structureprinciple attributes
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A006.- a. Management designs appropriate financial reportingstructures that proves relevant information at appropriatefunctional and business unit levels- b. Management maintains an organizational structure thatfacilitates reporting and other communications regardinginternal control over financial reporting
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Q007.- Internal Control Framework: Authority and Responsibilityprinciple attributes
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A007.- a. Responsibilities are defined as follows:- 1) Audit committee oversees the process for definingresponsibility for key financial reporting roles- 2) Executive management is responsible for solid internalcontrol- 3) Management is responsible for ensuring all employeesunderstand their responsibilities and adhere to internalcontrol policies- b. Authority is properly limited by position
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Q008.- Four components of balanced scorecard
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A008.- a. Learning and Growth- b. Customer- c. Business process (efficiency and effectiveness- d. Financial
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Q009.- What do Total Productivity Ratios (TPRs) show?
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A009.- Value of all output relative to the value of all input
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Q010.- Total Productivity is calculated:
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A010.- Quantity of output produced / costs of inputs
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Q011.- Partial Productivity Ratios (PPRs) reflect...
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A011.- the value of all outputs as compared to the value of majorcategories of input- PPRs are only concerned with the quantity of a singleinput and not its price- PPR is calculated as the quantity of of output produceddivided by the quantity of the single input used
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Q012.- PPR is calculated:
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A012.- quantity of output produced / quantity of the single inputused
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Q013.- What is a use of a Pareto Diagram in respect to internalcontrol issues?
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A013.- Pareto Diagrams are used to determine the quality controlissues that are most frequent and demand the greatestattention
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Q014.- Five elements of the Marketing Mix
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A014.- Product- Market segment- Method of Delivery- Communication strategy- Price
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Q015.- Theoretical Cost Drivers:- Executional vs Structural cost drivers
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A015.- Executional- short term- Structural- long term
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Q016.- Prime cost vs Conversion cost
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A016.- Prime cost= DL+DM- Conversion cost= DL+MOH
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Q017.- Methods to allocate joint costs of joint products
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A017.- 1. Allocation by unit volume- 2. Relative net realizable values at split-off point. NRV=sales value less cost of completion and disposal
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Q018.- Equivalent Units under FIFO (3 steps)
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A018.- Beginning WIP x % to be completed- Units completed - Beg WIP- Ending WIP x % completed
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Q019.- Equivalent Units under Weighted Average (2 steps)
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A019.- Units completed- Ending WIP x % completed
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Q020.- Cost per Equivalent unit calculation under FIFO
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A020.- FIFO = Current costs only/EU
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Q021.- Nominal GDP
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A021.- measures the value of all final goods and services inprices prevailing at the time of production
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Q022.- Real GDP
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A022.- measures the value of all final goods and services at aconstant price using a GDP deflator.
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Q023.- Price Index (GDP deflator) calculation:
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A023.- Nominal GDP/GDP deflator- x- 100
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Q024.- Composition of Business Cycles
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A024.- Expansionary Phase: rising economic activity and growth- Peak: a high point of economic activity- Contractionary Phase: falling economic activity andgrowth, follows a peak- Trough: low point of economic activity- Recovery Phase: follows a trough, economic activitybegins to increase
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Q025.- Recession
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A025.- two consecutive quarters of falling national output
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Q026.- Economic Indicators:- Leading Indicators
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A026.- Average new unemployment claims- Building permits- Average length of workweek- Money supply- Prices of selected stocks- Orders for goods- Index for consumer expectations
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Q027.- Economic Indicators:- Lagging Indicators
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A027.- Prime rate charged by banks- Average duration of unemployment- Bank loans outstanding
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Q028.- Economic Indicators:- Coincident Indicators
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A028.- Industrial production- Manufacturing and trade sales
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Q029.- Aggregate Demand Curve
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A029.- illustrates the maximum quantity of all goods andservices that households, firms, and the government arewilling and able to purchase at any given price level
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Q030.- Aggregate Supply Curve
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A030.- illustrates the maximum quantity of all goods andservices producers are willing and able to produce at anygiven price level
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Q031.- Factors that shift the AD curve
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A031.- 1. Changes in Wealth- 2. Changes in real interest rates- 3. Changes in consumer expectations- 4. Changes in exchange rates- 5. Changes in governmental expenditures- 6. Changes in consumer taxes
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Q032.- Factors that shift the AS curve
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A032.- 1. Changes in input prices- 2. Supply shocks
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Q033.- Expenditure Approach to measuring GDP
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A033.- Government purchases- Gross private Investment- Personal Consumption- Net Exports
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Q034.- Income Approach to measuring GDP
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A034.- Income from proprietors- Profits from corporations- Interest- Rent- Adjustments for net foreign income- Taxes- Employee compensation- Depreciation
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Q035.- Frictional Unemployment
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A035.- Normal unemployment resulting from workers routinelychanging jobs or from workers being temporarily laid off
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Q036.- Structural Unemployment occurs when:
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A036.- Jobs available in the market do not correspond to theskills of the work force- Unemployed workers do not live where the jobs arelocated
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Q037.- Cyclical Unemployment
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A037.- the amount of unemployment resulting from declines inreal GDP during periods of contraction or recession
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Q038.- Natural Rate of Unemployment
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A038.- the sum of frictional, structural, and seasonalunemployment
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Q039.- Seasonal Unemployment
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A039.- the result of seasonal changes in the demand and supplyof labor
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Q040.- Full Employment
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A040.- the level of unemployment when there is no cyclicalunemployment
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Q041.- Demand-Pull inflation
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A041.- caused by increase in aggregate demand- a. Increases in government spending- b. Decrease in taxes- c. Increases in wealth- Increases in money supply
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Q042.- Cost-Push inflation
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A042.- caused by reductions in the short-run aggregate supply- a. increase in oil prices- b. increase in nominal wages
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Q043.- Real interest rate
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A043.- Nominal interest rate- inflation rate
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Q044.- Monetary Policy:- Open market operations (OMO)
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A044.- OMO consists of the purchase and sale of governmentalsecurities in the open market
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Q045.- Monetary Policy:- Changes in discount rate
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A045.- the discount rate is the rate the Fed charges memberbanks for short-term loans
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Q046.- Monetary Policy:- Changes in the Required Reserve Ratio
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A046.- Required Reserve Ratio(RRR) is the fraction of totaldeposits banks must hold in reserve
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Q047.- Describe the relationship between interest rates and thedemand of money
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A047.- inversely related- as interest rates rise, it becomes more expensive to holdmoney, thus reducing the demand for money
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Q048.- An increase in money supply causes interest rates to_____.
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A048.- Fall
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Q049.- The long run aggregate supply curve is_______.
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A049.- vertical
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Q050.- What is functional interdependence?
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A050.- it is the participation of nations in world-wide institutionslike NATO or the UN
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Q051.- Strategic management usually involves defining the______, identifying the _______, identifying critical__________, and a ________ analysis.
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A051.- Strategic management usually involves defining theMISSION, identifying the STRATEGY, identifying criticalSUCCESS FACTORS, and a SWOT analysis.
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Q052.- What are the critical success factors of strategicobjectives? Also the elements of a balanced scorecard.
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A052.- Financial measures- Internal business process measures- Customer measures- Learning and growth
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Q053.- Factors that shift the demand curve on a microeconomicbasis include...- Hint: W.R.I.T.E.N
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A053.- changes in Wealth- changes in price of Related goods- changes in consumer Income- changes in consumer Taste- changes in consumer Expectations- changes in Number of buyers served by the market
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Q054.- Factors that shift the supply curve on a microeconomicbasis include...- Hint: E.C.O.T.T.
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A054.- changes in price Expectations- changes in production Costs- changes in demand for Other goods- changes in Subsidies- changes in production Technology
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Q055.- In micro economics a price ceiling may cause a ______;whereas, a price floor may cause a _______.
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A055.- In micro economics a price ceiling may cause aSHORTAGE; whereas, a price floor may cause a SURPLUS.
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Q056.- Product demand is more elastic when ____ substitutesare available.
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A056.- Product demand is more elastic when MORE substitutesare available.- *remember that elasticity is based on how changes inprice will affect the quantity demanded. If there are manyoptions available to the consumer a change in price of oneof the substitutes will will greatly affect the demand of theproduct because consumers will just purchase one of themany substitutes.
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Q057.- Product demand is more inelastic when _____ substitutesare available.
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A057.- Product demand is more inelastic when FEW substitutesare available.- think... if there are no other viable options in the marketconsumers will be forced to purchase your product, so achange in price will likely have a small/inelastic affect onquantity demanded.
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Q058.- The relationship between price elasticity of a product andthe firms total revenue is _______ related.- The relationship between price inelasticity of a productand the firms total revenue is _______ related.
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A058.- The relationship between price elasticity of a product andthe firms total revenue is INVERSELY related.- The relationship between price inelasticity of a productand the firm’s total revenue is POSITIVELY related.
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Q059.- Are monopolies socially efficient? Why?
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A059.- Monopolies are not socially efficient because they tend toproduce at a point where price is greater than marginalcost therefore less output is produced than is sociallyoptimal.
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Q060.- As a strategic tool what does value chain analysis help afirm do?
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A060.- Value chain analysis used as a strategic tool helps firmsunderstand the importance of perceived value with respectto the market the firm operates in.
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Q061.- What are Porters Five Forces?
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A061.- Barriers to entry- Market competitiveness- Existence of substitutes- Bargaining power of customers- Bargaining power of suppliers
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Q062.- After analyzing Porters Five Forces a the most idealsituation for a firm would be:- _______ Barriers to entry- _______ Market competitiveness- _______ Substitutes- _______ Bargaining power of customers- _______ Bargaining power of suppliers
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A062.- HIGH Barriers to entry- LOW Market competitiveness- FEW Substitutes- LOW Bargaining power of customers- LOW Bargaining power of suppliers
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Q063.- Unsystematic risk is also known as ________ risk.
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A063.- Unsystematic risk is also known as DIVERSIFIABLE risk.
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Q064.- Systematic risk is also known as ______ risk.
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A064.- Systematic risk is also known as UNDIVERSIFIABLE risk.
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Q065.- Factors influencing exchange rates- Trade Factor- relative inflation rates- What is the effect on exchange rates when domesticinflation exceeds foreign inflation?
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A065.- When domestic inflation exceeds foreign inflation holdersof domestic currency will purchase foreign currency inorder to flee the weakening currency leading to a greaterdemand for foreign currency and thus making the foreigncurrency more valuable and driving up the exchange rate.
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Q066.- Factors influencing exchange rates- Trade Factor- relative income levels- What is the effect of rising domestic income on theexchange rate?
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A066.- If income in the domestic country is rising relative to theincome in a foreign country the demand for the domesticcurrency is increasing thus making the domestic currencystronger relative to the foreign currency.
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Q067.- Factors influencing exchange rates- Trade Factor- government controls- What is the effect of increasing tariffs on imported goodsfrom a foreign country?
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A067.- The tariff will cause the demand for imported goods todecrease thus decreasing the demand for the importingcountry's currency resulting in a stronger domesticcurrency relative to the foreign currency.
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Q068.- Factors influencing exchange rates- Financial Factors- relative interest rates- What is the effect of rising interest rates in the domesticcountry?
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A068.- If interest rates are rising in the domestic country foreigninvestors seeking a higher return will purchase domesticassets thus driving up the demand for the domesticcurrency leading to a strong domestic currency relative tothe foreign currency.
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Q069.- Three types of motives for holding cash
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A069.- Transaction: concerned with having enough cash to meetpayments arising from the ordinary course of business- Speculative: concerned with having enough cash to takeadvantage of temporary investment opportunities- Precautionary: concerned with having enough cash tomaintain a safety cushion so that unexpected needs maybe met
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Q070.- Cash conversion cycle formula:
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A070.- inventory conversion period + receivables collectionperiod-payables deferral period
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Q071.- Inventory conversion period formula:
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A071.- average inventory / average COGS per day
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Q072.- Payables deferral period formula:
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A072.- average payables/average purchases per day
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Q073.- Number of days receivables outstanding formula:
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A073.- average receivables balance/ average daily sales
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Q074.- Inventory turnover formula:
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A074.- COGS/average inventory balance
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Q075.- Economic Order Quantity(EOQ) does not consider_______, nor does it account for costs of ________.
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A075.- Economic Order Quantity(EOQ) does not considerstockout costs, nor does it account for costs of safetystock.
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Q076.- Economic Order Quantity assumes that carrying costsinclude the following elements:- Hint: SOMII
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A076.- Storage- Obsolescence- Materials- Insurance- Interest
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Q077.- Economic Order Quantity equation:
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A077.- =sqrt 2SO/C- S=annual sales(units)- O=cost per purchase order- C=carrying cost per unit
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Q078.- Are rates usually lower or higher when using short-termloans versus long-term loans?
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A078.- Lower
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Q079.- What are three advantages of using short-term financing?
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A079.- 1. Increased liquidity- 2. Increased profitability- 3. Lower costs of borrowing
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Q080.- What are the two main disadvantages of using short-termfinancing?
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A080.- 1. Increased credit risk- 2. Increase interest rate risk
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Q081.- A firm anticipating a higher level of permanent workingcapital will likely deploy short- or long-term financing?
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A081.- Long-term
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Q082.- Define Operating Leverage
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A082.- Operating leverage is a measure of the degree to which afirm using fixed operating costs to magnify the effects of agiven percentage change in sales on the percentagechange in EBIT
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Q083.- Degree of operating leverage formula:
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A083.- DOL = %change in EBIT/%change in sales
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Q084.- Define Financial Leverage
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A084.- Financial leverage is the measure of the degree to whicha firm utilizes fixed financial costs to finance operations.
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Q085.- Degree of financial leverage formula:
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A085.- DFL= % change in EPS/ %change in EBIT
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Q086.- Cost of Debt (kdt) formula:
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A086.- = [i+(PV-Nd)/2]/[(Nd+PV)/2]
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Q087.- When determining the cost of equity using the CAPMmethod the risk premium is calculated:
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A087.- Risk Premium= Stocks Beta coefficient x Market RiskPremium- Market Risk Premium(MRP) is the market rate less therisk-free rate
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Q088.- Market Risk Premium(MRP) is calculated
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A088.- MRP = (market rate - risk free rate)
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Q089.- What is the formula for determining the Cost of RetainedEarnings under the CAPM method?
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A089.- CAPM= Risk-free Rate + [Beta x (market risk- risk freerate)]
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Q090.- ROI can be calculated using two different formulas, whatare the formulas?
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A090.- 1. Income/Investment Capital- 2. Profit Margin x Investment Turnover- Profit Margin = income/sales- investment turnover = sales/assets
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Q091.- Debt-to-total capital ratio provides indications related to afirms.....
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A091.- Long-term debt paying ability.- The lower the ratio the greater level of solvency and thegreater the presumed ability to pay debts.
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Q092.- Debt-to-equity ratio indicates...
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A092.- the degree of leverage used, the lower the ratio the lowerthe risk involved
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Q093.- Disadvantages of holding cash:
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A093.- 1. negative arbitrage effect- this occurs when the cost ofinterest exceeds interest income from cash reserves- 2. Increased attractiveness as a takeover target.- 3. Investor dissatisfaction with allocation of assets
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Q094.- Methods of speeding up collections include:- Hint: 6 of them
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A094.- 1. Customer credit screening- 2. Prompt billing- 3. Payment discounts- 4. EFTs- ensures receipts are deposited quickly- 5. Lockbox systems- bank receives payments directly- 6. Factoring AR
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Q095.- Methods to defer payments include:- Hint: 3 of them
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A095.- 1. Drafts- 2. Line of credit- 3. Zero balance accounts
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Q096.- Five Components of Information Technology
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A096.- People- Software- Hardware- Data and Information- Network
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Q097.- Data vs Information
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A097.- Data: raw facts- Information: organized and processed data that ismeaningful to somebody
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Q098.- What are the three primary roles of a businessinformation system in business operations?
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A098.- The three primary roles of an information system inbusiness operations include:- 1. Process detailed information- 2. Assist in making daily decisions- 3. Assist in developing business strategies
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Q099.- Business information systems allow a business toperform the following functions on data:
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A099.- a. collect- b. process- c. store- d. transform- e. distribute
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Q100.- Basic audit trail in an accounting information system
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A100.- source documents---->journal---->ledger--->trial balance--->financial statements
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Q101.- In a computerized environment journals are known as_______.
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A101.- In a computerized environment journals are known astransaction files.
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Q102.- In a computerized environment ledgers are known as______.
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A102.- In a computerized environment ledgers are known asMaster Files.
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Q103.- Processing Methodologies- What are the two main methods of performing filemaintenance on a master file?
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A103.- Batch Processing- Online Real Time Processing (OLRT)
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Q104.- What is batch processing
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A104.- Batch processing is a method of performing filemaintenance on a master file. Inputdocuments/transactions are collected and grouped by typeof transaction. These groups, called batches, areprocessed periodically
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Q105.- What type of systems is batch processing typically foundin?- Hint* think about the nature of batch processing's timedelay
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A105.- Batch processing will typically be found in "traditional"systems where the data does not need to be totally current.
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Q106.- What is Online Real Time Processing (OLRT)?
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A106.- Transactions are entered and the master files are updatedsimultaneously.
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Q107.- What is centralized processing and what are some of itsadvantages/disadvantages?
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A107.- Centralized processing environments maintain all dataand perform all data processing at a central location.- Advantages include:- Enhanced data security- & Consistent processing- Disadvantages include:- Possible high costs- Increased need for processing power and data storage- Reduction in local accountability because remotelocations will always blame the central location forprocessing problems- Bottlenecks may occur at high traffic times
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Q108.- What are the six most common types of reports in acomputerized environment?
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A108.- 1. Demand reports- 2. Periodic scheduled reports- 3. Ad hoc reports- 4. Push reports- 5. Exception reports- 6. Dashboard-style reports
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Q109.- What is an ad hoc report?
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A109.- Ad hoc reports are reports that do not currently exist butcan be created on demand without having to get a softwaredeveloper involved.- Think about when we had to design queries in MicrosoftAccess. You gave the computers specific demands toscreen data in order for the data to meet your individualneeds.
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Q110.- What is a Decision Support System?
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A110.- DSS's are an extension of Management InformationSystems (MIS). DSS's are computer based informationsystems that assist management in making decisions.- These systems do not automate decisions, but ratherprovide managers with interactive, computer aided toolsthat combine their subjective judgments and insights withobjective analytical data to guide the decision.
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Q111.- What is an Executive Information System (EIS)?
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A111.- These systems proved senior executive with immediateand easy access to internal and external information toassist the executives in monitoring business conditions ingeneral.
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Q112.- What is a Transaction Processing System?
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A112.- Transaction processing systems process and record theroutine daily transactions necessary to conduct thebusiness.- These systems are usually very structured.
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Q113.- What are the seven phases in the System DevelopmentLife Cycle (SDLC)?
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A113.- 1. System analysis- 2. Conceptual design- 3. Physical design- 4. Implementation and conversion- 5. Training- 6. Testing- 7. Operations and Maintenance
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Q114.- System Development Life Cycle- System Analysis phase
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A114.- The system analysis phase will involve gathering theinformation needed to purchase or develop a new system.- Usually includes identifying needs of users andmanagers, documenting the needs, and determiningfeasibility.
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Q115.- System Development Life Cycle- Conceptual Design phase
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A115.- The conceptual design phase involves deciding how theuser needs are going to be met.- Steps:- 1. Identify and evaluate design alternatives- 2. Develop detailed specifications outlining what thesystem needs to accomplish and how it is to be controlled
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Q116.- System Development Life Cycle- Physical Design phase
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A116.- The physical design phase is where the company will usethe conceptual design to develop detailed specificationsthat are used to code and test the computer programs.- Steps:- 1. Design input/output documents- 2. Write program- 3. Create files and databases- 4. Develop procedures- 5. Develop controls
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Q117.- System Development Life Cycle- Implementation and conversion
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A117.- The implementation and conversion phase translates theplan into action.- Steps:- a. Install new hardware/software- b. Hire or relocate employees to operate the system- c. Test or modify new processing procedures- d. Establish and document standards and controls- e. Convert new system and dismantle old system- f. Fine tune system
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Q118.- System Development Life Cycle- Training
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A118.- Train users to use the software and inform them of thenew policies
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Q119.- System Development Life Cycle- Testing
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A119.- Testing will likely include:- 1. Tests of the effectiveness of documents and reports,user input, operating control procedures, processingprocedures, and computer programs.- 2. Tests of capacity limits and backup and recoveryprocedures
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Q120.- System Development Life Cycle- Operation and Maintenance
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A120.- The system will be periodically reviewed andmodifications will be made.
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Q121.- What is the purpose of forming an information systemssteering committee? Who are its members? What are itsfunctions?
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A121.- Information Systems Steering Committees are formed toplan and oversee the information systems function and itaddresses the complexities created by functional anddivisional boundaries.- Its members are usually high level management like thecontroller and managers of the user departments- The functions of an Information Systems SteeringCommittee include:- 1. Setting governing policies for the AIS- 2. Ensuring top-management participation, guidance, andcontrol- 3. Facilitating the coordination and implementation of theAIS.
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Q122.- Application controls _____, _____, and ______transaction error and fraud.- Application controls provide reasonable assurance as tosystem....(4 elements)
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A122.- Application controls PREVENT, DETECT, and CORRECTtransaction error and fraud.- Application controls provide reasonable assurance as tosystem:- Accuracy- Completeness- Validity- Authorization
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Q123.- What are some examples of processing controls?
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A123.- Data Matching- File labels- Recalculation of batch totals- Cross-footing
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Q124.- What are some examples of Output controls?
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A124.- User review of output- Reconciliation- External data reconciliation- Output encryption
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Q125.- What is a Strategic Master Plan?
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A125.- A strategic master plan shows the projects that must becompleted to achieve long term goals.
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Q126.- Proper segregation of duties divides the _____, ______,and ______ functions.
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A126.- Proper segregation of duties divides the authorization,recording, and custody functions.
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Q127.- What is the difference between a systems analyst andcomputer programmer?
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A127.- A systems analyst help users determine their informationneeds and then design the information system- A computer programmer takes the systems analystsdesign and creates an information system by writingcomputer programs
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Q128.- What is a security administrator responsible for?
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A128.- assigning initial passwords and maintenance of thosepasswords
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Q129.- What is the difference between a Database Administratorand a Network Administrator?
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A129.- Database Admins are responsible for maintaining andsupporting the database software. This is opposed to aDATA administrator who is responsible for the definition,planning, and control of the data within the database, like ascientist typing information into a computer- A network administrator supports computer networks. Hewill set up and configure the computer network.
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Q130.- What is a Digital Certificate?
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A130.- A digital certificate is an electronic document, createdand digitally signed by a trusted party, which certifies theidentity of the owners of a particular public key.
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Q131.- What are the types of information security policies?
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A131.- Program-level policy- Program-framework policy- Issue-specific policy- System-specific policy
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Q132.- Information security policies:- Program-level policy
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A132.- Program-level policies are used for creating amanagement sponsored computer security program.Basically the mission statement of the IT department.
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Q133.- Information security policies:- Program-framework policy
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A133.- A program-framework policy establishes the overallapproach to computer security. Basically the IT securitystrategy.
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Q134.- Information security policies:- Issue-specific policy
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A134.- Addresses specific issues of concern to the organization
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Q135.- Information security policies:- System-specific policy
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A135.- System-specific policies focus on policy issues thatmanagement has decided for a specific system (e.g.payroll)
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Q136.- What is an Electronic Data Interchange (EDI)?
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A136.- EDI is computer-to-computer exchange of businesstransaction documents.
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Q137.- What are the benefits of an EDI system?
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A137.- Reduced handling costs- Increased processing speed
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Q138.- What are some of the common costs of an EDI system?
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A138.- 1. Legal costs associated with modifying and negotiatingtrade contracts- 2. Hardware costs- 3. Costs of translation software- 4. Costs of data transmission- 5. Costs associated with security, monitoring, and controlprocedures
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Q139.- What are the functions of a supply chain managementsystem (SCM)?
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A139.- planning- sourcing- making- delivery
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Q140.- Information systems risks include:
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A140.- Strategic risk- Operating risk- Financial risk- Information risk
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Q141.- Information systems security risk:- Strategic risk
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A141.- Strategic risk is the risk of choosing inappropriatetechnology.- Take for example, a company chooses a web-basedprogram to share data between offices.- If one office does not have high speed internet then theycannot enter data as quickly as others.
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Q142.- Information systems security risk:- Operating risk
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A142.- Operating risk is the risk of doing correct thingsimproperly
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Q143.- Information systems security risk:- Financial risk
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A143.- Financial risk is the risk of having financial resourceslost, wasted, or stolen.
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Q144.- Information systems security risk:- Information risk
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A144.- Information risk is the risk of loss of data integrity,incomplete transactions, or hackers.
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Q145.- Firewalls ______; they do not ______.
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A145.- Firewalls deter; they do not prevent
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Q146.- Firewall Methodologies- Packet filtering
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A146.- Packet filtering examines packets of data as they passthrough a firewall according to the rules that have beenestablished for the source of the data.
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Q147.- Firewall Methodologies- Circuit level gateways
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A147.- Circuit level gateways only allow data into a network thatwas requested from within the network.
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Q148.- Firewall Methodologies- Application level gateways
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A148.- Application level gateways aka proxies examine datacoming into the gateway. Most secure but also the slowest
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Q149.- Define Sales Volume Variance
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A149.- a flexible budget variance that distills volume activityfrom other sales components
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Q150.- Sales Volume Variance Formula
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A150.- (Actual units sold-Budgeted sales units)x Standard CMper unit
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Q151.- Define Sales Mix Variance
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A151.- a measure of the change in the number of actual soldunits from those budgeted
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Q152.- Sales Mix Variance Formula
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A152.- (actual sold units of product- Budgeted sales units ofproduct)x Budgeted product sales mix ratio x budgeted CMper unit of that product
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Q153.- Define Market Size Variance
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A153.- a measure of the effect the size of the entire market forthe product has on the contribution margin for the firm
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Q154.- Market Size Variance Formula
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A154.- (actual market size-expected market size0 x budgetedmarket share x budgeted CM per unit
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Q155.- Define Market Share Variance
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A155.- measures the effect of a firm's market share on the firm'sCM
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Q156.- Market Share Variance Formula
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A156.- (actual market share - budgeted market share) x actualindustry units x budgeted CM per unit
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Q157.- International Risk Assessment- Process Risk
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A157.- Process controls, data, and systems used to collect newinformation required by IFRS and accounting policies areinadequate to sustain two reporting systems under GAAPand IFRS
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Q158.- International Risk Assessment- System Risk
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A158.- New configuration setting and data mappings will need tobe defined, implemented, and embedded into the reportingsystem to facilitate dual reporting in GAAP and IFRS
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Q159.- International Risk Assessment- General Business Risk
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A159.- Existing contract terms, entities, covenants, etc., willneed to be reassessed to see if and how they conform torequirements under IFRS
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Q160.- Strategy links _____ and _____ with related objectives
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A160.- mission and values
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Q161.- Define Strategic Objectives
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A161.- High level goals that support the mission and vision ofthe organization and the manner in which shareholdervalue will be created
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Q162.- What is the focus of operations objectives?
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A162.- efficiency and effectiveness
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Q163.- What is the focus of reporting objectives?
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A163.- Relevance, accuracy and timeliness
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Q164.- Balanced Scorecard elements
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A164.- Financial, Internal business process, Customer, Learningand growth
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Q165.- Costs included in product costs under AbsorptionCosting
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A165.- 1. DM- 2. DL- 3. MOH, variable and fixed
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Q166.- Costs included in product costs undervariable(contribution) approach
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A166.- 1. DM- 2. DL- 3. Variable MOH
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Q167.- Absorption vs variable costing effects on income:- When production is greater than sales
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A167.- When production is greater than sales net income underthe Absorption method will be greater
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Q168.- Absorption vs variable costing effects on income:- When sales are greater than production
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A168.- When sales are greater than production net income undervariable approach will be greater.- This is true because, under absorption costing, some ofthe fixed MOH from previous period is part of beginninginventory and will be charged to this period's cost of sales
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Q169.- No change in inventory:- Absorption Net Income _ Variable Net Income
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A169.- No change in inventory:- Absorption Net Income = Variable Net Income
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Q170.- Increase in inventory:- Absorption Net Income _ Variable Net Income
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A170.- No change in inventory:- Absorption Net Income > Variable Net Income
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Q171.- Decrease in inventory:- Absorption Net Income _ Variable Net Income
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A171.- Decrease in inventory:- Absorption Net Income < Variable Net Income
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Q172.- Breakeven computation in units and sales dollars:
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A172.- Total fixed costs/CM per unit= Breakeven point in units- Total fixed costs/ CM ratio= Breakeven point in SalesDollars
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Q173.- Target Cost computation:
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A173.- Target Cost= Market price-required profit
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Q174.- What is the rule for deciding whether to accept a specialorder if there is excess capacity available?
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A174.- The selling price must be greater than the variable costper unit
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Q175.- What is the rule for deciding whether to accept a specialorder if company is operating at full capacity?
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A175.- The selling price must be greater than the CM that wouldhave been produced if the special order were not acceptedand the variable cost per unit of special order
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Q176.- DM price variance equation
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A176.- Actual quantity purchased x (actual price - standardprice)
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Q177.- DM quantity usage variance equation
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A177.- Standard price x (actual quantity used - standard quantityallowed)
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Q178.- DL rate variance
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A178.- Actual hours worked x (actual rate - standard rate)
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Q179.- DL efficiency variance equation
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A179.- Standard rate x (actual hours worked - standard hoursallowed)
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Q180.- Authoritative Standards vs Participative Standards
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A180.- Authoritative standards are set exclusively bymanagement; whereas, Participate standards involvemanagement and employees
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Q181.- What is a master budget?
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A181.- A master budget documents specific short-term operatingperformance goals for a period of time usually less than ayear.
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Q182.- What is the ultimate output of a master budget?
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A182.- Pro forma financial statements
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Q183.- Actual Authority
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A183.- All authority that a principal expressly gives to an agentplus any authority that can reasonably be implied from theexpress grant
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Q184.- Agent
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A184.- One (agent) who acts on behalf of another (principal)
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Q185.- Apparent Authority
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A185.- Authority that a third party reasonably believes an agenthas based on the principal's holding the hange out asbeing the principal's agent.
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Q186.- Appraisal Rights
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A186.- Shareholders who are dissatisfied with most fundamentalcorporate changes have an opportunity to dissent anddemand that they corporation pay them the fair value oftheir shares rather than remain shareholders of afundamentally changed corporation.
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Q187.- Articles of incorporation
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A187.- Formation filing documents of a corporation and are filedwith the state in which the business is located.
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Q188.- Articles of Organization
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A188.- Formation filing documents of a Limited LiabilityCorporation.
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Q189.- Authorized Shares
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A189.- Shares described in the articles
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Q190.- Business Judgment Rule
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A190.- A director will not be liable to the corporation for actsperformed or decisions made in good faith, in a manner thedirector believes to be in the best interest of thecorporation, and with the care an ordinarily prudent personin a like position would exercise.
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Q191.- Bylaws
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A191.- Contains the rules for running the corporation. They arenot part of the articles of incorporation and are notrequired to be filed by the state.
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Q192.- C Corporation
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A192.- A corporation that is taxed as an entity distinct from itsowners.
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Q193.- Certificate of Authority
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A193.- Authority granted by a state authorizing a foreigncorporation to transact business within the state
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Q194.- Charging Order
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A194.- Court order used by a creditor of an individual partnermay obtain an interest against an individual partner's shareof profits.
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Q195.- Closely held Corporation
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A195.- The articles of incorporation can eliminate the board ofdirectors and provide that they shareholders shall have thepower of the board, but this is not typical expect in smallcorporations.
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Q196.- Common Stock
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A196.- Class of stock that will carry with it all rights of stockownership
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Q197.- Confessing a Judgment
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A197.- Admitting liability in a lawsuit.
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Q198.- Consolidation
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A198.- One or more corporations joining together to form a newcorporation.
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Q199.- Corporate Opportunity Doctrine
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A199.- If a director is presented with a business opportunity thatwould be of interest to his corporation, generally the dutyof loyalty prohibits the director from taking the opportunityhimself.
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Q200.- Corporation
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A200.- Legal entity distinct from its owners and managers. Theyare created by complying with a state incorporationstatute.
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Q201.- Corporation by Estoppel
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A201.- Under the estoppel doctrine, a party who treats abusiness as if it were a validly formed corporation will beestopped (legally barred) from claiming in a legalproceeding that the corporation was not validly formed.- This applies to third parties who treat the business as acorporation as well as to the business itself
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Q202.- Cumulative Preferred Shares
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A202.- Shares with a preference usually are entitled to a fixedamount of money before distributions can be made withrespect to nonpreferred shares. With cumulative preferredshares, if a dividend
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Q203.- De Facto Corporation
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A203.- If all the requirements for incorporation are not met, thebusiness might still be treated as a corporation (andprotect its owners, officers, and directors from personalliability).- If the incorporators made a good faith attempt toincorporate, and operated as if they had incorporated, thebusiness will be treated as a corporation in all respects,except the state may bring an action challenging thecorporation's status.
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Q204.- De Jure Corporation
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A204.- If all the requirements for incorporation are met, thecorporation is said to be "de jure" and its existence will berecognized for all purposes
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Q205.- Debt Securities
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A205.- Debt Securities are bonds.- It represents a creditor-debtor relationship with thecorporation whereby the corporation has borrowed fundsfrom "outside investors" and promises to pay.
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Q206.- Derivative Action
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A206.- When a corporation has a legal cause of action againstsomeone but refuses to bring the action, the shareholdersmay have a right to bring a shareholder derivative action toenforce the corporation's rights.- Such an action may be brought against the director of thecorporation or outsiders.
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Q207.- Directors
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A207.- Individuals with the general authority and responsibilityfor management of the corporation. In most corporations,the board of directors delegates the power to run thecorporation on a day-to-day basis to the officers.
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Q208.- Dissociation
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A208.- Change in the relationship of the partners caused by anypartner ceasing to be associated in the carrying on of thebusiness. The remaining partners have the right tocontinue the business.
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Q209.- Dissolution
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A209.- Upon dissolution, the partnership is terminated and thebusiness must be wound up
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Q210.- Dividends
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A210.- Distribution of corporate profits as ordered by thedirectors and paid to the shareholders
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Q211.- Domestic Corporation
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A211.- Corporation incorporated within the state
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Q212.- Equity Securities
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A212.- Stocks - An instrument representing an investment in thecorporation whereby its holder becomes a part owner ofthe business.
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Q213.- Fictitious Name Statutes
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A213.- State laws that require persons conduction a businessunder an assumed name to file with the state the nameunder which the business is conducted and the real namesand addresses of all person conducting the business
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Q214.- Fiduciary Duty
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A214.- Duty of utmost loyalty and good faith owed by an agent toher principal
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Q215.- Foreign Corporation
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A215.- Corporation doing business in a state other than its stateof incorporation
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Q216.- Fundamental Changes
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A216.- Issues that might fundamentally change the nature of theentity
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Q217.- General Partner
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A217.- Person in either a general or limited partnership withunlimited personal liability and the right to take part in themanagement of the business.
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Q218.- Greenmail
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A218.- When a corporation is faced with the prospect of beingtaken over and the BOD wants to resist the takeoverattempt, it will pay the person or company attempting thetakeover to abandon its takeover attempt
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Q219.- Incorporator
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A219.- The party responsible for forming the corporation byfiling articles of incorporation with the state.
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Q220.- Indemnification
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A220.- Duty of a business entity to reimburse those properlyacting on behalf of the entity for losses incurred.
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Q221.- Issued Shares
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A221.- The corporation issues some or all of the authorizedshares.
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Q222.- Joint and Several Liability
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A222.- Liability whereby creditors may sure partners jointly orsue partners individually
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Q223.- Joint Venture
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A223.- An associate of persons with the intent of engaging in asingle business venture for profit.
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Q224.- Limited Liablity (of shareholders, limited partners, andLLC members)
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A224.- The creditors are prevented from accessing the personalassets of the individual. Their liability is limited to theirinvestment in the entity.
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Q225.- Limited Liability Company (LLC)
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A225.- Form of business entity that offers its owners (calledmembers) one of the main advantages of the corporateform of business (ie they are not personally liable for theobligations of the company) and all of the tax advantagesof a partnership.- It is a hybrid business organization that combinescharacteristics of corporations, partnerships, and limitedpartnerships.
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Q226.- Limited Liability Partnership (LLP)
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A226.- An association of 2 or more persons who agree to carryon as co-owners a business for profit.- An LLP differs from a general partnership in that a partnerin an LLP is not personally liable for the obligations orliabilities of the partnership arising from errors, omissions,negligence, malpractice, or the wrongful acts committed byanother partner or by an employee, agent, orrepresentative of the LLP. Neither are the partners liablefor partnership contracts.
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Q227.- Limited Partner
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A227.- Partner with limited liability as to his personal assets,risking only his investment in the limited partnership.- A limited partner is not an agent of the partnership.
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Q228.- Limited Partnership
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A228.- A partnership made up of one or more general partnersand one or more limited partners.
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Q229.- Locking up the Crown Jewels
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A229.- When a corporation is face with the prospect of beingtaken over and the board of directors wants to resist thetakeover attempt, it will give a third party an option topurchase the company's most valuable assets.
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Q230.- Members
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A230.- Owners of a limited liability company.
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Q231.- Merger
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A231.- Involves one or more corporations merging into anothercorporation.- One corporation survives the merger and continues inexistence and the other merging corporations cease toexist following the merger.
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Q232.- Noncumulative Preferred Shares
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A232.- Shares with a preference are usually entitled to a fixedamount of money before distributions can be made withrespect to nonpreferred shares.- Unless the dividend is cumulative the right to a dividendpreference is extinguished if it is not declared for that year.
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Q233.- Officers
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A233.- Parties elected by the board of directors to managed thecorporation on a day-to-day basis.- They are agents of the corporation.
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Q234.- Outstanding Shares
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A234.- Shares in the shareholders hands
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Q235.- Par Value
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A235.- Specific face value placed on stock
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Q236.- Piercing the Corporate Viel
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A236.- In some circumstances, the courts will hould theshareholders, officers, or directors of a corporation liablebecause the legislative privilege of conducting business incorporate form is being abused.
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Q237.- Preemptive Rights
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A237.- When a corporation proposes to issue additional sharesof stock, current shareholders often want to purchasesome shares in order to maintain their proportional votingstrength through special rights referred to as "preemptiverights" that must be granted in the articles of incorporation
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Q238.- Preferred Stock
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A238.- Ownership interest in a company that is preferred insome manner (dividends or assets) over the commonstockholders in the case of liquidation.
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Q239.- Promoter
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A239.- Individuals who form a corporation. Responsible for theprocurement of commitments for capital that will be usedby the corporation after formation.- Promoters enter into contracts with third parties who areinterested in becoming shareholders and might also enterinto contracts for goods or services to be provided to thecorporation once it’s formed.
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Q240.- Proxy
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A240.- Written authorization given to third parties for thepurposes of voting shares on behalf of the shareholder.
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Q241.- Quorum
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A241.- Minimum number of parties that must be present for avalid vote or transaction
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Q242.- Registered Agent
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A242.- The person on who process may be served if the limitedpartnership, LLC, or corporation is sued.
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Q243.- Revised Model Business Corporation Act (RMBCA)
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A243.- Uniform law governing corporations that has beenadopted by a slight majority of the states
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Q244.- Revised Uniform Limited Partnership Act (RULPA)
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A244.- Uniform law governing limited partnerships that has beenadopted by a majority of the states
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Q245.- Revised Uniform Partnership Act (RUPA)
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A245.- Uniform law governing partnerships that has beenadopted by a majority of the states
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Q246.- S Corporation
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A246.- Corporation electing to be taxed like a partnership andyet retaining other advantages of the corporation form
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Q247.- Scorched Earth Policy
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A247.- When a corporation is faced with the prospect of beingtaken over and the board of directors wants to resist thetakeover attempt, it will sell off assets or take out loansthat would make the company less financially attractive.
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Q248.- Self-Tender
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A248.- When a corporation is faced with the prospect of beingtaken over and the board of directors wants to resist thetakeover attempt, it will make an offer to acquire stockfrom its own stockholders and thus retain control in orderto prevent a takeover.
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Q249.- Share Exchange
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A249.- Transaction in which one corporation acquires of alloutstanding shares of one or more classes of stock ofanother corporation.- Both corporations continue to exist as separate entities.
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Q250.- Shareholder/Stockholder
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A250.- Party owning an interest in a corporation. Has a limitedright to manage.
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Q251.- Shark Repellant
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A251.- When a corporation is faced with the prospect of beingtaken over and the board of directors wants to resist thetakeover attempt, it will amend the articles of incorporationor bylaws to make a takeover more difficult.
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Q252.- Short-Form Merger
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A252.- A merger whereby a parent corporation owning 90% ormore of a subsidiary corporation may merge the subsidiaryinto the parent without the approval of the shareholders ofeither corporation or the approval of the subsidiary'sboard.
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Q253.- Sole Proprietorship
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A253.- One person owns the business and manages all of itsaffairs. The sole proprietor is not considered an entityseparate from the business.
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Q254.- Statement of Authority
![Page 508: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/508.jpg)
A254.- Document filed with the secretary of state, stating that thepartnership has expanded or curtailed a partner's authorityto enter into transactions on behalf of the partnership.- However, the filing of a limitation does not give thirdparties constructive knowledge of the limitation.
![Page 509: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/509.jpg)
Q255.- Statement of Denial
![Page 510: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/510.jpg)
A255.- A partner listed in a filed statement of partnershipauthority may effectively deny her authority by filing astatement of denial with the secretary of state.
![Page 511: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/511.jpg)
Q256.- Stock Dividends
![Page 512: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/512.jpg)
A256.- Dividends in the corporation's "own authorized butunissued shares"
![Page 513: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/513.jpg)
Q257.- Stock Subscriptions
![Page 514: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/514.jpg)
A257.- Contracts committing parties to the purchase of stock.
![Page 515: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/515.jpg)
Q258.- Treasury Shares
![Page 516: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/516.jpg)
A258.- Issued shares that are sometimes repurchased by thecorporation (called "issued but not outstanding").
![Page 517: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/517.jpg)
Q259.- Ultra Vires Act
![Page 518: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/518.jpg)
A259.- An unauthorized act. Under the RMBCA, a corporationmay include a clause in its articles state the businesspurpose for which the corporation was formed.- A number of states require a purpose clause.- If a corporation undertakes business activities outsidethe clause (or outside the business permitted by statute) itis said to be acting "ultra vires" and may be challenged byadversely affected parties
![Page 519: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/519.jpg)
Q260.- Unlawful Distribution
![Page 520: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/520.jpg)
A260.- A distribution that causes a corporation not to be able topay its debts as they become due in the regular course ofbusiness or causes the corporation's total assets would beless than its total liabilities
![Page 521: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/521.jpg)
Q261.- Voting Agreements
![Page 522: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/522.jpg)
A261.- Shareholders agree among themselves to vote theirshares as the majority of signers directs
![Page 523: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/523.jpg)
Q262.- Voting Trusts
![Page 524: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/524.jpg)
A262.- An agreement of shareholders under which all the sharesowned by the parties to the agreement are transferred to atrustee, who votes the shares and distributes the dividendsin accordance with the provisions of the voting trustagreement.
![Page 525: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/525.jpg)
Q263.- Watered Stock
![Page 526: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/526.jpg)
A263.- Stock that is issued in exchange for property worth lessthan the par value of the stock (the difference between thepar value and the value of the property is deemed to be"water")
![Page 527: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/527.jpg)
Q264.- White Knight
![Page 528: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/528.jpg)
A264.- When a corporation is faced with the prospect of beingtaken over and the board of directors wants to resist thetakeover attempt, it will find a company that the directorswant to merge with.
![Page 529: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/529.jpg)
Q265.- Winding Up
![Page 530: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/530.jpg)
A265.- Liquidation that involves the process of collecting thecorporate or partnership assets, paying the expensesinvolved satisfying creditors' claims, and distributing thenet assets of the business to the appropriate party.
![Page 531: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/531.jpg)
Q266.- What is a joint venture?
![Page 532: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/532.jpg)
A266.- Association of persons or entities with the intent ofengaging in a single business venture for profit.
![Page 533: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/533.jpg)
Q267.- What is necessary to form a general partnership?
![Page 534: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/534.jpg)
A267.- (i) two or more persons- (ii) who agree (expressly or impliedly)- (iii) to carry on as co-owners of a business for profit.
![Page 535: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/535.jpg)
Q268.- When is it necessary for a general partnership agreementto be in writing under the Statute of Frauds?
![Page 536: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/536.jpg)
A268.- When the partners want to enforce an agreement toremain partners for longer than a year.
![Page 537: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/537.jpg)
Q269.- In a partnership, how will partners share profits and/orlosses?
![Page 538: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/538.jpg)
A269.- Unless partners provide otherwise, profits and losses willbe split equally.
![Page 539: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/539.jpg)
Q270.- What are the rights in partnership property?
![Page 540: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/540.jpg)
A270.- 1- Not assignable or mortgageable by partner individually.- 2- Not subject to attachment by individual partner'screditors or for alimony.- 3- Rights vest in surviving partners upon death.
![Page 541: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/541.jpg)
Q271.- What are the rights in partnership interest?
![Page 542: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/542.jpg)
A271.- a)interest is assignable- b)assignee has rights to partner's profit share- c)assignee has no management rights- d)judicial dissolution- e)creditors may attach a partner's interest (chargingorder)- f)upon death, heirs entitled to deceased partner's profitshare.
![Page 543: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/543.jpg)
Q272.- What is the effect of a partner transferring his interest inthe partnership without consent of other partners?
![Page 544: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/544.jpg)
A272.- The transfer does not make the assignee a partner.- The transfee only has the right to receive the assignor'sdistributions.
![Page 545: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/545.jpg)
Q273.- What are the rights of partners?
![Page 546: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/546.jpg)
A273.- 1- Rights in partnership property- 2- Rights in partnership interest- 3- Right to indemnification and contribution- 4- Right to inspect books and records- 5- Right to bring legal action against partnership.
![Page 547: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/547.jpg)
Q274.- Can a limited partnership be formed with limited liabilityfor all partners?
![Page 548: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/548.jpg)
A274.- No
![Page 549: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/549.jpg)
Q275.- What are similarities between a limited partnership and acorporation?
![Page 550: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/550.jpg)
A275.- Both are created under a state statue and require filingwith the state for creation.
![Page 551: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/551.jpg)
Q276.- How are profits and losses allocated among partners?
![Page 552: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/552.jpg)
A276.- Unless there is an agreement between the partners,profits/losses will be allocated in proportion to the value ofeach partners' contributions.
![Page 553: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/553.jpg)
Q277.- Are corporations governed by statute?
![Page 554: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/554.jpg)
A277.- Yes
![Page 555: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/555.jpg)
Q278.- What items MUST be included in the articles ofincorporation?
![Page 556: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/556.jpg)
A278.- 1) Name of corporation- 2) Names and address of the corporation's registeredagent (on whom process may be served if the corp is sued)- 3) The names and addresses of each of the incorporators- 4) The number of shares authorized to be issued- 5) One or more classes of shares must have unlimitedvoting rights.
![Page 557: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/557.jpg)
Q279.- What are the reasons for piercing the corporate veil(disregard of corporate entity)?
![Page 558: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/558.jpg)
A279.- 1) Commingling personal funds with corporate funds- 2) Inadequate capitalization- 3) Committing frauds on existing creditors
![Page 559: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/559.jpg)
Q280.- In order to make a fundamental corporate change, mustthere be a unanimously board approved resolution?
![Page 560: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/560.jpg)
A280.- NO
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Q281.- True or False:- In order to make a fundamental corporate change, theshareholders must be given notice and an opportunity tovote on the change.
![Page 562: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/562.jpg)
A281.- TRUE
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Q282.- True or False:- For a fundamental corporate change, at least a majority ofall outstanding shares must be cast in favor of approval ofthe change.
![Page 564: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/564.jpg)
A282.- TRUE
![Page 565: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/565.jpg)
Q283.- What are the types of fundamental changes?
![Page 566: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/566.jpg)
A283.- (D) Termination of a corporation/dissolution- (A) Amendments to the articles of incorporation- (M) Merger, consolidation, and share exchange- (S) Transfer of assets outside the regular course ofbusiness (SALE, lease or exchange)
![Page 567: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/567.jpg)
Q284.- Once a dividend is declared, is a shareholder consideredan unsecured creditor?
![Page 568: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/568.jpg)
A284.- Yes
![Page 569: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/569.jpg)
Q285.- What are the Qualitative Characteristics of Accounting?
![Page 570: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/570.jpg)
A285.- 1.Understandability- 2. Usefulness. What are the characteristics ofUsefulness?
![Page 571: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/571.jpg)
Q286.- What are the Objectives of Financial Reporting?
![Page 572: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/572.jpg)
A286.- 1. Provide Information useful for investment and creditdecisions- 2. Provide information useful for assessing cash flowprospects (Amount, timing, uncertainties)- 3. Provide Information about the enterprise's resources,claims to those resources, and changes therein
![Page 573: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/573.jpg)
Q287.- What are the most authoritative sources of guidance inthe Hierarchy of GAAP?
![Page 574: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/574.jpg)
A287.- Statements of Financial Accounting Standards andInterpretations, APB Opinions, and Accounting ResearchBulletins
![Page 575: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/575.jpg)
Q288.- What are the pervasive constraints to FinancialReporting?
![Page 576: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/576.jpg)
A288.- Benefits outweigh the associate costs- Materiality
![Page 577: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/577.jpg)
Q289.- Revenue Recognition criteria
![Page 578: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/578.jpg)
A289.- Revenue must be recognized when both earned (indicatesthe transfer of risk and that substantially all work has beencompleted) and realized or realizable.
![Page 579: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/579.jpg)
Q290.- What is the matching principle?
![Page 580: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/580.jpg)
A290.- Expenses should be recorded in the same period as theirrelated revenues
![Page 581: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/581.jpg)
Q291.- How is full disclosure achieved in financial reporting?
![Page 582: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/582.jpg)
A291.- Through the notes to the financial statements whichcontain additional information considered important forachieving the objectives of financial reporting.
![Page 583: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/583.jpg)
Q292.- What is the principle of conservatism?
![Page 584: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/584.jpg)
A292.- Conservatism governs that gains should be deferred untilthey are both earned and realized or realizable, not solelywhen cash has been received. However, probably lossesshould be recorded immediately as long as it is reasonablyestimable.
![Page 585: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/585.jpg)
Q293.- Comprehensive income
![Page 586: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/586.jpg)
A293.- All income to the entity excluding exchanges withowners.- Net Income- +/- Pension changes in the funded status- Unrealized gains and losses on AFS securities- Foreign currency translation adjustments- Effective portion of cash flow hedges
![Page 587: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/587.jpg)
Q294.- Changes in which balance sheet accounts result inrevenues? expenses?
![Page 588: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/588.jpg)
A294.- Revenues result from an increase in assets or a decreasein liabilities
![Page 589: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/589.jpg)
Q295.- What is the essential quality of an asset?
![Page 590: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/590.jpg)
A295.- An asset signifies that the item will provide futurebenefits and therefore to comply with the matchingprinciple it must amortize these costs of future periodsbenefits.
![Page 591: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/591.jpg)
Q296.- Gross Concept
![Page 592: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/592.jpg)
A296.- Amounts are recorded in their entirety. This applies toexpenses and revenues which are recorded in whole andthen netted together in order to find income fromcontinuing operations.
![Page 593: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/593.jpg)
Q297.- Single Step Income Statement
![Page 594: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/594.jpg)
A297.- Total Expenses are subtracted from
![Page 595: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/595.jpg)
Q298.- Accounting Costs
![Page 596: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/596.jpg)
A298.- Explicit costs of operating a business (e.g. purchases ofinput services)
![Page 597: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/597.jpg)
Q299.- Accounting Profit
![Page 598: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/598.jpg)
A299.- Difference between total revenue and total explicit costs.(no allowance for opportunity costs or other implicit costs)
![Page 599: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/599.jpg)
Q300.- Aggregate Demand
![Page 600: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/600.jpg)
A300.- Maximum quantity of all goods and services thathouseholds, firms, and governments are will and able topurchase at any given price.
![Page 601: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/601.jpg)
Q301.- Aggregate Supply
![Page 602: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/602.jpg)
A301.- Maximum quantity of all goods and services thatproviders are willing and able to produce at any givenprice.
![Page 603: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/603.jpg)
Q302.- Average Fixed Cost (AFC)
![Page 604: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/604.jpg)
A302.- Total fixed cost(TFC)/total output or quantity. AFCdeclines as Output increases.- AFC = TFC/Q
![Page 605: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/605.jpg)
Q303.- Average Product (AP)
![Page 606: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/606.jpg)
A303.- Total product (output) divided by the number of units ofthe variable input required to produce that output level.
![Page 607: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/607.jpg)
Q304.- Average Revenue (AR)
![Page 608: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/608.jpg)
A304.- Total Revenue divided by total output.
![Page 609: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/609.jpg)
Q305.- Average Total Cost (ATC)
![Page 610: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/610.jpg)
A305.- Total cost divided by total output or quantity- ATC = TC/Q
![Page 611: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/611.jpg)
Q306.- Average Variable Cost (AVC)
![Page 612: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/612.jpg)
A306.- Total variable cost (TVC) divided by total output orquantity (AVC = TVC/Q). The average variable cost isconstant regardless of increase or decreases in output.
![Page 613: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/613.jpg)
Q307.- Balanced Budget
![Page 614: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/614.jpg)
A307.- Where taxes and other governmental revenues equalgovernment spending.
![Page 615: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/615.jpg)
Q308.- Best Cost Strategy
![Page 616: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/616.jpg)
A308.- Competitive strategy that combines cost leadershipstrategies with differentiation strategies to give customershigher value for their money.
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Q309.- Boycott
![Page 618: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/618.jpg)
A309.- Organized group refusal to conduct market transactionswith a target group or individual (using only socialpressure, not legal obligation).
![Page 619: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/619.jpg)
Q310.- Budget Deficit
![Page 620: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/620.jpg)
A310.- When taxes and other governmental revenues are lessthan governmental spending.
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Q311.- Budget Surplus
![Page 622: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/622.jpg)
A311.- When taxes and other governmental revenues are greaterthan government spending.
![Page 623: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/623.jpg)
Q312.- Business Cycle
![Page 624: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/624.jpg)
A312.- Rise and fall of economic activity (GDP) relative to thelong-term growth trend of the economy.
![Page 625: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/625.jpg)
Q313.- Cartel
![Page 626: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/626.jpg)
A313.- A group of firms acting together to coordinate outputdecisions and control prices so that the joint profit of themembers of the cartel will be maximized. The cartel willattempt to create a monopoly.
![Page 627: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/627.jpg)
Q314.- Compensating Balance
![Page 628: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/628.jpg)
A314.- A required minimum amount of funds (10 - 20%) that afirm received a loan or line of credit must keep in a non-interest bearing checking account at the bank.
![Page 629: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/629.jpg)
Q315.- Competitive Strategies
![Page 630: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/630.jpg)
A315.- 1) Cost leadership focused on a broad rang of buyers- 2) cost leadership focused on a narrow range of buyers- 3) product differentiation focused on a broad range ofbuyers- 4) product differentiation focuses on a narrow range ofbuyers- 5) best cost
![Page 631: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/631.jpg)
Q316.- Complements/Complementary Products
![Page 632: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/632.jpg)
A316.- Products that are usually consumed jointly. They arerelated such that a decrease in the price of one product willcause an increase in the demand of the other product.
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Q317.- Constant Returns to Scale
![Page 634: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/634.jpg)
A317.- The state in which the long-run average total costs staysthe same as the quantity of output produced increases ordecreases
![Page 635: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/635.jpg)
Q318.- Consumer Price Index (CPI)
![Page 636: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/636.jpg)
A318.- An index that is used to adjust for inflation. It is designedto measure the impact of price changes on the cost of atypical basket of goods purchased by urban consumerhouseholds.
![Page 637: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/637.jpg)
Q319.- Contractionary Monetary Policy
![Page 638: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/638.jpg)
A319.- Reduction of the money supply by the Fed.
![Page 639: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/639.jpg)
Q320.- Core Competency
![Page 640: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/640.jpg)
A320.- Fundamental knowledge, ability, or expertise in a specificsubject area or skill set.
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Q321.- Cost Leadership Strategy
![Page 642: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/642.jpg)
A321.- A competitive strategy that emphasizes lowest overallcost.
![Page 643: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/643.jpg)
Q322.- Cost Push Inflation
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A322.- Inflation caused by reductions in short-run aggregatesupply
![Page 645: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/645.jpg)
Q323.- Country Risk
![Page 646: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/646.jpg)
A323.- Risk of political and economic uncertainty in a foreigncountry that affects the value of loans or investments inthat country.
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Q324.- Covered Interest Arbitrage
![Page 648: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/648.jpg)
A324.- In an interest arbitrage transaction, the foreign exchangerisk can be covered (coverage interest arbitrage) if, at thesame time the investor exchanges the domestic currencyfor the foreign currency to make the foreign investment,the investor also engages in a forward sale of an equalamount of the foreign currency to coincide with thematurity of the investment.
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Q325.- Cross Elasticity of Demand
![Page 650: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/650.jpg)
A325.- The percentage change in the quantity demanded of onegood divided by the percentage change in the price of arelated good.
![Page 651: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/651.jpg)
Q326.- Cross Elasticity of Supply
![Page 652: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/652.jpg)
A326.- Percentage change in the quantity supplied of one gooddivided by the percentage change in the price of a relatedgood.
![Page 653: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/653.jpg)
Q327.- Cross Hedging
![Page 654: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/654.jpg)
A327.- Hedging the exposure in one currency by the use offutures, forwards, or other contracts in a second currencythat is correlated with the first currency.
![Page 655: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/655.jpg)
Q328.- Currency Appreciation
![Page 656: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/656.jpg)
A328.- Strengthening of a currency in relation to anothercurrency. Appreciation occurs when, because of a changein currency exchange rates, a unit of currency buys moreunits of another currency.
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Q329.- Currency Depreciation
![Page 658: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/658.jpg)
A329.- The weakening of a currency in relation to anothercurrency. Depreciation occurs when, because of a chancein currency exchange rates, a unit of currency buys fewerunits of another currency.
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Q330.- Currency Variability
![Page 660: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/660.jpg)
A330.- Overall currency exposure can be assessed byconsidering each currency position together with thatcurrency's variability and the correlations among thecurrencies (how much two currencies tend to increase anddecrease together). The standard deviation of historicaldata serves as one measure of currency variability.Currency variability levels may change over time.
![Page 661: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/661.jpg)
Q331.- Current Method
![Page 662: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/662.jpg)
A331.- The current method of foreign currency translation is themethod required with a firm's books are maintained in itsfunctional currency. Remeasurement into the functionalcurrency is obviously then not required before thetranslation into the reporting currency can be done.Translation gains and losses are reported in othercomprehensive income.
![Page 663: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/663.jpg)
Q332.- Cyclical Unemployment
![Page 664: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/664.jpg)
A332.- Unemployment resulting from business cycles, especiallyrecessions or depressions.
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Q333.- Deflation
![Page 666: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/666.jpg)
A333.- Sustained decrease in the general prices of goods andservices
![Page 667: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/667.jpg)
Q334.- Demand Pull Inflation
![Page 668: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/668.jpg)
A334.- Demand pull inflation is inflation caused by increase inaggregate demand (i.e., by a rightward shift in theaggregate demand curve)
![Page 669: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/669.jpg)
Q335.- Depression
![Page 670: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/670.jpg)
A335.- Very severe recession.
![Page 671: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/671.jpg)
Q336.- Derived Demand
![Page 672: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/672.jpg)
A336.- Demand for the factors of production of a good caused bythe demand for a final good.
![Page 673: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/673.jpg)
Q337.- Differentiation Strategy
![Page 674: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/674.jpg)
A337.- A product differentiation strategy is a competitivestrategy that emphasizes the perception that their productsare better or have a unique quality that differentiates themfrom competing products.
![Page 675: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/675.jpg)
Q338.- Discount rate
![Page 676: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/676.jpg)
A338.- Interest rate that the Fed charges banks for short-termloans
![Page 677: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/677.jpg)
Q339.- Under the expenditure approach, GDP is the sum of thefollowing four components:
![Page 678: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/678.jpg)
A339.- (G) Government purchases of goods and services- (I) Gross private domestic Investment (nonresidentialfixed investment, residential fixed investment, and changein business inventories)- (C) Personal Consumption expenditures (durable andnon-durable goods, and services)- (E) Net Exports (minus imports)
![Page 679: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/679.jpg)
Q340.- The income approach accounts for GDP is calculated asfollows:
![Page 680: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/680.jpg)
A340.- (I) Income of proprietors- (P) Profits of corporations- (I) Interest (net)- (R) Rental Income- (A) Adjustments for net foreign income andmiscellaneous items- (T) Taxes (indirect business taxes)- (E) Employee compensation (wages)- (D) Depreciation (also known as capital consumptionallowance)
![Page 681: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/681.jpg)
Q341.- Types of unemployment:
![Page 682: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/682.jpg)
A341.- 1) Frictional unemployment- 2) Structural unemployment- 3) Seasonal unemployment- 4) Cyclical unemployment
![Page 683: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/683.jpg)
Q342.- SWOT Analysis stands for:
![Page 684: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/684.jpg)
A342.- Strengths- Weaknesses- Opportunities- Threats
![Page 685: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/685.jpg)
Q343.- Factors the Shift Demand Curve
![Page 686: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/686.jpg)
A343.- (W) Change in Wealth- (R) Changes in price of Related goods- (I) Changes in consumer Income- (T) Changes in consumer Tastes or preferences for aproduct- (E) Changes in consumer Expectations- (N) Changes in the Number of buyers served by themarket
![Page 687: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/687.jpg)
Q344.- Factors that Shift Supply Curves:
![Page 688: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/688.jpg)
A344.- (E) Changes in price Expectations of the supplying firm- (C) Changes in production Costs- (O) Changes in price or demand for Other goods- (S) Changes in Subsidies or taxes- (T) Changes in production Technology
![Page 689: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/689.jpg)
Q345.- What is necessary to form a GP? (3)- The is no requirement of a writing, even if the GP is toown a land, Unless the GP is to last for __________.
![Page 690: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/690.jpg)
A345.- 1. 2 or more persons- 2. who agree (expressly or impliedly)- 3. to carry on as co-owners of a business for profit- 4. more than ONE year.
![Page 691: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/691.jpg)
Q346.- Name the basic characteristic of a partnership regardingthe duration.
![Page 692: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/692.jpg)
A346.- LIMITED LIFE OF ENTITY
![Page 693: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/693.jpg)
Q347.- When a solvent partnership is dissolved and its assetsare reduced to cash, the cash must be used to pay thepartnership's liabilities in the following order: 3 steps
![Page 694: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/694.jpg)
A347.- 1. pay creditors/ split loss- 2. return capita/ split loss- 3 divide profits
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Q348.- How partners will share profits and losses?
![Page 696: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/696.jpg)
A348.- 1. will be split EQUALLY, unless provided otherwise,regardless of partner's contributions.- 2. if partner cannot contribute his share of losses, theremaining partners MUST make up the share on a pro ratabasis
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Q349.- What are the rights of a partner in specific partnershipproperty?
![Page 698: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/698.jpg)
A349.- 1. the partner has NO RIGHT to possess or transferexcept for partnership purposes.- Thus, the property is not subject to Personal Creditors'claims or ALIMONY.- However, it is subject to a surviving partner'ssurvivorship interest - it belongs to partnership.
![Page 699: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/699.jpg)
Q350.- What is effect of a partner transferring his interest in thepartnership without the consent of the other partners?
![Page 700: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/700.jpg)
A350.- 1. such transfer does not make the assignee a partner- (that can be done only with the consent of other partners)- 2. thus the transferee has no power to manage thepartnership, inspect books vote etc.
![Page 701: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/701.jpg)
Q351.- Is it true that LP can be formed with limited liability for allpartners?
![Page 702: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/702.jpg)
A351.- NO!- you need at least on GP who has unlimited personalliability for all partnership obligations.
![Page 703: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/703.jpg)
Q352.- LLP is similar to GP. The differences are:
![Page 704: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/704.jpg)
A352.- 1. Partners in LLP are not PERSONALLY LIABLE for Tortsof fellow partners, employees, agents.- 2. Liable for their own negligence and who under theirdirect control.- 3. Not personally liable for debts of the LLP. They are onlyliable to the extent of their capital contributions.
![Page 705: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/705.jpg)
Q353.- LLP and LP _________ file with the Sate.- Generally in an LLP, there does not need to be a ______
![Page 706: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/706.jpg)
A353.- MUST- GP
![Page 707: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/707.jpg)
Q354.- What are similarities between a LP and a Corporation?
![Page 708: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/708.jpg)
A354.- BOTH ARE CREATED UNDER A STATE STATUTE ANDREQUIRE FILING WITH THE STATE FOR CREATION.
![Page 709: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/709.jpg)
Q355.- Corporations are governed by ___________
![Page 710: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/710.jpg)
A355.- STATUTE
![Page 711: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/711.jpg)
Q356.- ITEMS INCLUDED IN THE ARTICLES OFINCORPORATION
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A356.- 1. the name of the corporation- 2. the name and the address of the corporation'sregistered Agent- 3. the name and the addresses of each of theincorporators- 4. the number of the shares authorized to be issued
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Q357.- 1. Commingling personal funds with Corp.- 2. under capitalization- 3. committing fraud- Are the reasons for _________
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A357.- piercing the Corp. Veil - courts will hold the shareholders,officers and directors liable
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Q358.- Shareholders in the Corp. do not elect the _________, anddo not have the power to remove them.
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A358.- OFFICERS
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Q359.- Regarding the Fundamental Corp. Changes:- 1. The board must approve a resolution, but there is norequirement of ___________- 2. The shareholders must be given notice and anopportunity to vote on the change. At lease a majority of_____________ must be cast in favor of approval.
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A359.- UNANIMITY- ALL OUTSTANDING SHARES
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Q360.- Fundamental changes include:
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A360.- 1, amendments to the articles of Incorp.- 2. Dissolutions -termination or a corporation- 3. mergers- 4. consolidations- 5. share exchanges- 6. Transfer of assets outside the regular course ofbusiness- Mnemonics :DAMS- Dissolution- Amendments to the articles- Mergers, consolidations and share exchanges- Sale of almost all the Corp's assets outside the regularcourse of business
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Q361.- The Shareholders have the status of ___________ once adividend is declared.
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A361.- UNSECURED CREDITOR
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Q362.- Cumulative preferred dividends are exam favorite- _ they accumulate even if __________- No dividends can be paid to common shareholders until__________- No dividends are due until __________
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A362.- NOT DECLARED- ALL CUMULATIVE DIVIDENDS ARE PAID- IT IS DECLARED BY THE BOARD OF DIRECTORS
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Q363.- The shareholders can inspect books and record for___________, but shareholders can be denied inspectionfor __________
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A363.- Proper purpose- Improper purpose
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Q364.- Short-form merger where 90% if the stock is acquired isnot a __________ change
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A364.- FUNDAMENTAL - no shareholders approval needed
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Q365.- _________ is an option or right to purchase additionalshares of stock securities at a specified price; it does notrepresent indebtedness
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A365.- WARRANT
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Q366.- Each partner is entitled to an equal share of thepartnership profits and is chargeable with a share of thepartnership losses in ____________ to the allocationmethod described in the partnership agreement. If partnersagree to share profits other than ___________, losses willbe shared similar to _________, absent agreement to dootherwise.
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A366.- PROPORTION- EQUALLY- PROFITS
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Q367.- A formula for sharing losses will____________ to sharingprofits
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A367.- NOT BE APPLIED
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Q368.- What is a requirement for a corp. to achieve a successfulvoluntary dissolution?
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A368.- A recommendation of dissolution by the board ofdirectors and approval by a majority of all shareholdersentitle to vote
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Q369.- A cop. is a legally separate entity distinct form itsshareholders. To transfer interest in corp., one mustsimply ___________.- A partnerships( LP and GP) requires __________ totransfer interest in the partnership.- A limited liability company can follow ____________rules, depending on how it is taxed.
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A369.- 1.SELL HIS/HER STOCK- 2. the consent of the other partners- 3. THE PARTNERSHIP OR CORP.
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Q370.- A Corp., initial BYLAWS shall be adopted by _________ or_________ or the board of directors may ratify theincorporator's initial bylaws. Generally, the bylaws are therules of conduct for the corporation and are ________contained in the articles of incorporation as they areusually bulky.- The __________ typically note such items as the companyname, the comp. address, the names and the addresses ofpersons composing the initial board of directors, thenumber of authorized shares, the incorporator's name andaddress, and the registered agent's name and address,among other items.
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A370.- 1. THE INCORPORATORS OR THE BOARD OFDIRECTORS- 2. NOT- 3. THE ARTICLES OF INCORPORATION
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Q371.- What corp. can :- have more than 100 shareholders- have a nonresident alien as a shareholder- has a disadvantage of double taxation when- it pays dividends to its shareholders
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A371.- C corp
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Q372.- Answer YES or NO for PROPRIETORSHIP- 1. Tax- free distributions and contributions- 2. Earnings accumulate tax-free- 3. Not subject to personal holding tax- 4. No double taxation of income- 5. Single individual as management- 6. Corporation as member/multiple members allowed
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A372.- PROPRIETORSHIP- 1. Yes- 2. Yes, pass through individuals but no entity tax- 3. Yes- 4. Yes- 5. Yes- 6. No
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Q373.- Answer YES or NO for S CORP.- 1. Tax- free distributions and contributions- 2. Earnings accumulate tax-free- 3. Not subject to personal holding tax- 4. No double taxation of income- 5. Single individual as management- 6. Corporation as member/multiple members allowed
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A373.- S CORP.- 1. Yes, under certain circumstances- 2. Yes, pass through individuals but no entity tax- 3. Yes- 4. Yes- 5. Yes- 6. No
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Q374.- Answer YES or NO for C CORP.- 1. Tax- free distributions and contributions- 2. Earnings accumulate tax-free- 3. Not subject to personal holding tax- 4. No double taxation of income- 5. Single individual as management- 6. Corporation as member/multiple members allowed
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A374.- C CORP.- 1. No- 2. No- 3.No- 4. No- 5. No- 6.Yes
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Q375.- Answer YES or NO for LLPARTNERSHIP- 1. Tax- free distributions and contributions- 2. Earnings accumulate tax-free- 3. Not subject to personal holding tax- 4. No double taxation of income- 5. Single individual as management- 6. Corporation as member/multiple members allowed
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A375.- LLPARTNERSHIP- 1. Yes- 2. Yes, pass through individuals but no entity tax- 3. Yes- 4. Yes- 5. Yes- 6. Yes
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Q376.- What Require shareholder's approval and what not?- Dissolution- Purchase of 55% of another corp. stock- Merger
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A376.- Dissolution and Merger Require shareholder's approval
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Q377.- A __________ is an association of persons or entitieswith the intent of engaging in a Single Business Venturefor PROFIT
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A377.- JOINT VENTURE
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Q378.- ___________is the simplest form of business ownership.It is NOT considered an entity separate from the business;nothing needs to be file unless required by the state.
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A378.- A SOLE PROPRIETORSHIP
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Q379.- List major disadvantages and advantages of soleproprietorship.
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A379.- disadvantages:- 1. is personally liable fro ALL obligations of the business.- 2. limited life- advantages:- 1. not double taxation- 2. sole decision maker
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Q380.- The key difference between a Joint Venture and a GP isthe fact that JV is formed for __________.- JVs are treated as a Partnerships in most legal aspects
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A380.- SINGLE TRANSACTION OR PROJECT OR RELATEDSERIES OF TRANSACTIONS
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Q381.- A GP is similar to a sole proprietorship EXCEPT _______
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A381.- that there are at least TWO partners
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Q382.- List disadvantages and advantages of GP.
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A382.- disadvantages :- 1. partners are personally liable for obligations of thepartnership- 2. Transfer of partners interest must be approved by ALLGPs.,- 3. limited life of the GP- Advantages:- 1. no double taxation
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Q383.- All partnerships are assumed to be _________ unlessotherwise stated.
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A383.- GP
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Q384.- _________ is a change in the relationship of the partnerscaused by any partner ceasing to be associated in thecarrying on of the business.
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A384.- DISSOCIATION
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Q385.- In case of _________ - partners change but thepartnership may or may not continue.- In case of __________ business is wound up, then theentity is terminated.
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A385.- DISSOCIATION- DISSOLUTION
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Q386.- When a partner Dissociates, the partner's right toparticipate in management ceases.- Actual authority ends but __________ authority continuesuntil the third party given notice.
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A386.- APPARENT
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Q387.- Partners are ___________ for all contracts entered intoand All torts committed by other partners within the scopeof the partnership business or which are authorized.- Under ___________ liability , each partner is personallyand individually liable for the _________ amount of allpartnership obligations.
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A387.- PERSONALLY LIABLE- JOINT AND SEVERAL- ENTIRE AMOUNT - 100%
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Q388.- Each partner owes a _________ DUTY to GP and is boundto use P-p property and his best efforts for the benefit ofthe Partnership.
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A388.- FUDUCIARY
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Q389.- LLP ________ have a perpetual life, unless providedotherwise.
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A389.- DOSE NOT
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Q390.- Limited partners in LLP are like _________, theycontribute capital , but _________ participate in themanagement of the partnership.
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A390.- SHAREHOLDERS- DO NOT
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Q391.- Unlike a GP, if there is No agreement, Profit and Lossallocations in LP are based on ____________
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A391.- CAPITAL CONTRIBUTIONS
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Q392.- ________ is a form of business entity that offers itsowners ( called members) one of the main advantages ofthe corporate form of business - they are not personallyliable for the obligations of the company and all of the taxadvantages of a partnership - flow though taxation.
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A392.- LIMITED LIABILITY COMPANY
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Q393.- A LLC is a __________ business that combinescharacteristics of corporations, partnership and LP.
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A393.- HYBRID
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Q394.- Generally, ________ may participate in management ofLLC
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A394.- ALL MEMBERS - each member will be an agent of theLLC.
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Q395.- An LLC is formed by filing ___________ with the secretaryof state.
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A395.- ARTICLES OF ORGANIZATION
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Q396.- Voting strength of LLC members are _________ and isbased on ___________
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A396.- NOT EQUAL- CAPITAL
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Q397.- Profit and loss allocation for the LLC members is basedon __________ and is similar to LP.
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A397.- CAPITAL- GP and LLP - is EQUAL , unless otherwise agreed
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Q398.- List advantages and disadvantages of the LLC
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A398.- Advantages: Limited liability of members, liable only forhis own torts- Disadvantages: may NOT transfer all of his interestwithout the consent
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Q399.- _________ is a legal entity distinct from its owners -called Shareholders, and menages.
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A399.- A CORPORATION
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Q400.- Creation of the Corp. requires filing a document called____________ with the state.
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A400.- THE ARTICLES OF INCORPORATION
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Q401.- _________ do not have the power to manage the day-to-day operations of a Corp.- Management power is vested in ___________.- They usually delegate their power to run the day-to-dayoperations to __________, whom they select.
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A401.- STOCKHOLDERS- DIRECTORS- OFFICERS
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Q402.- List advantages (3) and disadvantage of Corp.
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A402.- Advantages:- 1. Not personally liable- 2. perpetual life- 3. easy to transfer interest in the Corp. - sell- Double Taxation is main disadvantage
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Q403.- The tax laws permit certain Corp. to elect to be Taxed likepartnerships and yet retain the other advantages of theCorp. form
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A403.- S corp.
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Q404.- There are number of restrictions on S Corp. (5)
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A404.- 1. No more than 100 members- 2. Shareholders must be individuals, estates, or certaintrusts- 3. must be domestic corp.- 4. one class of stock- 5. foreign shareholders are not allowed.
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Q405.- An agreement among the third party, the corp. and thepromoter that the third party will release the promoter andsubstitute the Corp.
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A405.- NOVATION
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Q406.- _____ are the rules for running the corp.
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A406.- BYLAWS
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Q407.- If the incorporators made a good Faith attempt toincorporate - the doctrine is called
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A407.- De Facto
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Q408.- Foreign corp. is a corp that is ___________- It must obtain a ____________ to transact business.
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A408.- not incorporated within the state- Certificate of Authority
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Q409.- Individually _________ have no right or power to act -they are not agents but do owe a fiduciary duty
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A409.- DIRECTORS- CAN ACT AS A GROUP
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Q410.- Corporations need _________ profits and losses amongtheir shareholders
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A410.- NOT allocate
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Q411.- GR, Shareholder ________ the right to a dividendUNLESS and until the dividend is __________ by the board.
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A411.- DO NOT HAVE- DECLARED
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Q412.- What is preemptive rights?
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A412.- Right to purchase some shares to maintain theirproportional voting strength
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Q413.- What is Dissenting shareholder appraisal rights?
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A413.- Shareholder who is dissatisfied with most fundamentalcorp.- changes have an opportunity to "dissent" and demandthat the corp. pay them the Fair value of their shares ratherthan remain shareholders of a fundamentally changedcorp.
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Q414.- A partnership that has no stated duration is called a__________
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A414.- Partnership at will
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Q415.- A Corp. may be authorized to- __________ its officers for liability incurred in a Suit ofStockholders.
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A415.- INDEMNIFY
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Q416.- a partnership that has no stated duration is called
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A416.- a partnership at will
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Q417.- A limited partnership and a corp. are both createdunder_______ and must __________
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A417.- a statute- and must file a copy of their certificate with the properstate authorities.
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Q418.- In general, the shareholders must approve any MERGERor CONSOLIDATION except for
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A418.- a Short-form merger - if 90% of the stock was acquired.
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Q419.- Economic profit =
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A419.- revenue - explicit cost - implicit cost
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Q420.- Short-Run Aggregate Supply Curve is ____________
![Page 840: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/840.jpg)
A420.- UPWARD SLOPING
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Q421.- Long-Run Aggregate Supply Curve is ____________
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A421.- VERTICAL
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Q422.- During a recession there is _______________ demand.- An Expansionary policy would ___________ gov.spending or ___________ taxes., both of which would___________ the level of aggregate demand.- An expansionary monetary policy would attempt to____________ interest rates.
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A422.- insufficient aggregate- increase- cut taxes- increase demand- decrease
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Q423.- In a MONOPOLISTICALLY competitive industry, firmsonly earn _________ profits in the long-run. When there isan equilibrium, a firm will operate INEFFICIENTLY withPrice _____________ than MR
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A423.- NORMAL- GREATER- P>MR
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Q424.- As FULL EMPLOYMENT approaches, demand for goodsand services is rising. This increased Demand usuallycauses and ___________ in Price level . The result is__________
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A424.- INCREASE- INFLATION
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Q425.- Price freezing would cause ___________
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A425.- DEMAND TO EXCEED SUPPLY
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Q426.- Reserve ratio =
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A426.- RESERVES / TOTAL DEMAND DEPOSITS
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Q427.- ____________ is the appropriate index for measuring thechanges in a COMPANY'S PURCHASING POWER
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A427.- PPI or WHOLESALE INDEX
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Q428.- The mopoly can increase profits by increasing output anddecreasing price as long as ___________. The firm willmaximize profits by continuing to the point at the givenoutput ___________
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A428.- MR>MC- MR=MC
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Q429.- Firms in a monopolistically competitive industry produce_________products, engage in _________ competition, andface a ____________ demand curve, there are__________to enter the market.
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A429.- differentiated- non-price- downward sloping- NO barriers
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Q430.- Firms in a porfectly competitive industry porduce a__________ product, engage in _________ competition,and face a ___________ demand curve, thereare__________ to enter the market.
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A430.- standardized- price- perfectly elastic- NO barriers
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Q431.- Induced investment is the investment made in aneconomy in response to ______________
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A431.- CHANGES IN THE LEVEL OF NATIONAL INCOME
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Q432.- If inflation in Russia is 10% and in US is 5% , the RussianRuble will___________
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A432.- depreciate by 5% and- US $ appreciate by 5%
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Q433.- If someone purchases a CALL option, he expects pricesto ____________- If someone purchases a PUT option, he expects prices to____________
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A433.- RISE- DECREASE
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Q434.- ___________ are the reduction in average total cost ofproduction when a firm expands plant production.
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A434.- ECONOMIES OF SCALE
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Q435.- Normal profit is
![Page 870: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/870.jpg)
A435.- a cost of resources from an economic perspective- it is a point where, Revenue = Implicit + Explicit costs- Economic profit < accounting profit
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Q436.- Net realizable value =
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A436.- Sale value - separable costs
![Page 873: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/873.jpg)
Q437.- Economic cost is
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A437.- the sum of all explicit and implicit costs of the businessfirm
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Q438.- Imputed costs are ________ costs; they are not knownand must be ________.
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A438.- implied- estimated
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Q439.- A normal profit is
![Page 878: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/878.jpg)
A439.- a cost of resources from an economic perspective.- the amount necessary for the firm to be willing to keepthe resources deployed in the firm.
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Q440.- The US balance of trade is decreased by
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A440.- US imports.- A favorable balance of trade occurs when exports exceedimports.
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Q441.- Natural rate of unemployment - is the rate that
![Page 882: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/882.jpg)
A441.- occurs when there is no cyclical unemployment and theeconomy is producing its potential output
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Q442.- Economic profit =
![Page 884: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/884.jpg)
A442.- Total Revenue - Total costs
![Page 885: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/885.jpg)
Q443.- The use of SL vs MACRS depreciation would result in?
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A443.- a slightly lower net cash flow- lower NPV- less desirable investment
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Q444.- A favorable debt-to-equity ratio means -?
![Page 888: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/888.jpg)
A444.- a higher bond rating -> means lower interest rates forbonds being sold, which lowers the cost of capital forfuture bond issuances.- need to lower % of long-term debt.
![Page 889: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/889.jpg)
Q445.- The marketability of investment-?
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A445.- the ability to sell a security for its face market valuequickly
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Q446.- What are general characteristics of debt and equityfinancing?- Flexibility- Tax deductibility- EPS Dilution- Increased Risk- Cost (high or low?)- Return (fixed or variable?)
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A446.- Debt Equity- Flexibility no yes- Tax deductibility yes no- EPS Dilution no yes- Increased Risk yes no- Cost low high- Return fixed variable
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Q447.- Aggressive WC management- more risk
![Page 894: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/894.jpg)
A447.- ↑CL ratio to non-current liabilities- low current ratio- Focus on high profitability potential, despite the cost ofhigh risk and low liquidity
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Q448.- Conservative WC Management- less risk
![Page 896: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/896.jpg)
A448.- ↑CA ratio to non-current assets- high current ratio, long operating cycle
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Q449.- Net working capital
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A449.- (Current assets) - (Current liabilities)- Liquidity
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Q450.- The average inventory level when the EOQ model andSafety Stock is used = ?
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A450.- 1/2 of the EOQ + SS
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Q451.- Absorption costing assigns the fixed costs as
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A451.- a product costs.
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Q452.- Variable costing considers the fixed costs as
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A452.- expense in the period incurred
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Q453.- A/R are at the optimal level when
![Page 906: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/906.jpg)
A453.- Carrying costs = Opportunity costs
![Page 907: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/907.jpg)
Q454.- Annual carrying cost for inventory =
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A454.- average inventory x Carrying cost per unit
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Q455.- Bond/ stock order in case of default (5 items)
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A455.- 1Corporate bonds- 2 Convertible bonds- 3 Preferred stock- 4 Convertible preferred stock- 5 Common stock
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Q456.- Weighted Average Cost Of Capital - WACC=
![Page 912: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/912.jpg)
A456.- All else equal, the WACC of a firm increases as the beta and rate ofreturn on equity increases, as an increase in WACC notes a decreasein valuation and a higher risk.- The WACC equation is the cost of each capital componentmultiplied by its proportional weight and then summing:= E/V × Re + D/V × Rd × (1- Tax)- Where:- Re = cost of equity- Rd = cost of debt- E = market value of the firm's equity- D = market value of the firm's debt- V = E + D- E/V = percentage of financing that is equity- D/V = percentage of financing that is debt- Tax = corporate tax rate
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Q457.- What Does Capital Structure Mean?
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A457.- A mix of a company's long-term debt, specific short-term debt,common equity and preferred equity. The capital structure is how afirm finances its overall operations and growth by using differentsources of funds.- Debt comes in the form of bond issues or long-term notes payable,while equity is classified as common stock, preferred stock orretained earnings. Short-term debt such as working capitalrequirements is also considered to be part of the capital structure.- A company's proportion of short and long-term debt is consideredwhen analyzing capital structure. When people refer to capitalstructure they are most likely referring to a firm's debt-to-equity ratio,which provides insight into how risky a company is. Usually acompany more heavily financed by debt poses greater risk, as thisfirm is relatively highly levered.
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Q458.- Cost of capital decrease, The return on capital
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A458.- increase
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Q459.- Debt carries the_______cost of capital and is tax_______
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A459.- lowest- deductable
![Page 919: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/919.jpg)
Q460.- The higher the tax rate the incentive to use _______financing
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A460.- Debt
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Q461.- Classify risk into two broad categories -
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A461.- D Diversifiable risk- U Unsystimatic ( non-market specific)- N Nondiversifiable Risk- S Systematic (Market)
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Q462.- A Poison pur clause is a covenant that obliges theborrower to
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A462.- to repay the bonds if a large quantity of common stock isheld by a single investor and the bond rating isdowngraded.
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Q463.- Opportunity costs are part of _________ cost.- Explicit costs are ___________ costs.
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A463.- IMPLICIT- NOT IMPLICIT
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Q464.- Calculate the DISCOUNTED NET-OF-TAX amount thatrelates to disposal of the asset sold at GAIN.
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A464.- Cash received- less- Gain amount X PFV of 1 yr 1 X tax rate
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Q465.- To RANK different investments use __________
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A465.- PROFITABILITY INDEX
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Q466.- CONTRIBUTION MARGIN =
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A466.- SALES REV - VARIABLE COSTS
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Q467.- CAPITAL STRUCTURE is defined as _________
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A467.- the % of debt, preferred stock, and common stock usedfor financing a firms assets.
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Q468.- The firm's MARGINAL cost of capital is __________
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A468.- a Weighted average of the investors' required returns ofdebt and equity
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Q469.- When Corp. is earning EXCESS PROFITS. __________STOCK acts more like ____________
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A469.- PARTICIPATING PREFERRED STOCK- EQUITY THAN CUMULATIVE PREFERRED STOCK
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Q470.- Cost of retained earnings =
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A470.- Dividend 1 / Market Price of the stock +G
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Q471.- An indenture is a legal document specifying the_______________
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A471.- terms and conditions of a bond issue
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Q472.- The firm's FINANCIAL LEVERAGE ___________ whenDEBT-TO-EQUITY RATIO______
![Page 944: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/944.jpg)
A472.- increases- INCREASES,- Repurchase of the Treasury stocks - Decreases EQ.
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Q473.- If a company ignores the payment discount (2/10, net 30)what is daily interest rate it is paying ?
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A473.- 1. Discount / 100%- discount- 2% / 98%
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Q474.- To calculate the cost of a NEW common stock issue use___________Dividend
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A474.- Next period dividend -- Current year dividend X (1+G rate)
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Q475.- Bonds are issued at PREMIUM if _______
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A475.- STATED RATE IS > THAN YIELD TO MATURITY (EFFECTIVE RATE)
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Q476.- CAPM Capital Asset Pricing Model =- - is used to estimate the required return on a firm's costof Equity.
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A476.- Rfree + Beta (Rmarket - Rfree)
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Q477.- A noncollectable bond is _________ risky and sold at___________ yield (price)
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A477.- less- lower
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Q478.- LETTERS OF CREDIT reduce the risk of loss to Exportersof goods. This is accomplished by having the bankguarantee payment to the ___________. A draft is drawn onthe _________ .
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A478.- EXPORTER- IMPORTER
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Q479.- Cost per check cleared =
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A479.- DSi- D- days saved- S - size of the check- i - daily Interest rate %/360OR- Days saved x Check perDay x Annual % rate
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Q480.- CURRENT ASSETS ARE :
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A480.- CASH- MRK SEC- A/R- INVENTORY
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Q481.- Gross margin =- GM ratio =
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A481.- SALES - COGS- GM / SALES
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Q482.- Firm's average GROSS RECEIVABLE BALANCE = ?
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A482.- average daily sales x average collection period
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Q483.- Transfer amount ( principal ) =
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A483.- INTEREST EARNED / INTEREST RATE
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Q484.- QUICK or ACID-TEST RATIO =
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A484.- (CA – INVENTORY) / CL
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Q485.- Cash conversion cycle
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A485.- Payable – inventory - receivable - collect= Inventory conversion period + Receivables conversionperiod – Payables conversion period
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Q486.- Cash conversion cycle
![Page 972: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/972.jpg)
A486.- = inventory conversion period (low)- +Receivable collection period (low)- - payables deferral period (high - delay)
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Q487.- inventory conversion period
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A487.- average inventory / average cost of sales per day
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Q488.- Receivable collection period
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A488.- Days sales outstanding = average. Res/ average. salesper day
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Q489.- payables deferral period
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A489.- average payables / average purchases per day
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Q490.- Days sales outstanding DSO (Receivable collectionperiod)?
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A490.- DSO = (average Receivables/Sales)×DaysOR- Receivable collection period= average Res/ average salesper day
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Q491.- DSO Days sales outstanding?- used for
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A491.- 360/ A/R Turnoveror- average A/R / (credit sale / 360 )or- average A/R / average sales per day- The average # of days required to collect A/R
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Q492.- CCC (in days) = Inventory conversion period +Receivables conversion period – Payables conversionperiod
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A492.- "Payables conversion period" (or "Days payablesoutstanding") refers to the time "accounts payable" is held(from inventory delivery until cash disbursal).- "Inventory conversion period" (or "Days inventoryoutstanding") refers to the time inventory is held(beginning at the same moment as the "payablesconversion period," i.e. the inventory delivery, and endingwith its sale for a receivable).- "Receivables conversion period" (or "Days salesoutstanding") refers to how long inventory is held (fromthe end of the "inventory conversion period," i.e. the saleof inventory, until cash collection).
![Page 985: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/985.jpg)
Q493.- Payables conversion period =
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A493.- (average Accounts Payable / [+∆inventory +COGS])×365 =days holding accounts payable until it's all paid in cash(i.e. time before inventory growth hits cash)= average payables / average purchase per day
![Page 987: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/987.jpg)
Q494.- Inventory conversion period =- OR Inventory T/Over in Days
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A494.- average Inventory / (COGS /365)OR- (average Inventory/COGS)×365 = days holding inventoryuntil it's all sold- The average # of days required to sell inventory. ORaverage days sales in Inventory
![Page 989: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/989.jpg)
Q495.- Receivables conversion period =
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A495.- average Accounts Rec / (net Sales/ 365)OR- 365/ A/R Turnover= days holding receivables until the last cash collection
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Q496.- Inventory Turnover- is indicator of __________- The higher the T/Over ->- It would assist w/identifying______________
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A496.- COGoodsS / average Inventory- How quickly inventory is sold is an indicator of Co'sperformance.- The higher the T/Over -> the better the performance- It would assist w/identifying slow-moving & obsoleteinventory.- average Inventory = (Beg + End)/2- End Inventory = Beg + Purchases - GOGS
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Q497.- Receivables Turnover Ratio =- is indicator of ____________- Faster T/Over gives credibility to the ______________- Low T/Over -______________- High T/Over -______________
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A497.- Net sales / Average net receivables- Quality of A/R and the success of the firm in collectingoutstanding A/R.- Faster T/Over gives credibility to the Current and Acid-Test ratios.- Low T/Over - Collection problems- High T/Over - Collections are good
![Page 995: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/995.jpg)
Q498.- (Days Sales Outstanding) Average Collection Period =
![Page 996: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/996.jpg)
A498.- 365 / Receivables Turnover Ratio= average AR /credit sales/ 360
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Q499.- days sales in Inventory- OR average age of inventory =
![Page 998: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/998.jpg)
A499.- 360 / inventory turnover,- Inventory T/over=COGS/ average inventory= (average inventory / COGS) × 360 = average Inventory /sales cost per day
![Page 999: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/999.jpg)
Q500.- Residual income RI =
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A500.- Reported net income- (Desired rate of return x Invested Capital)
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Q501.- return on sale OR NET Profit margin=- GROSS (profit) margin =
![Page 1002: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1002.jpg)
A501.- net income / sales revenue.- GROSS (profit) margin = (sales - COGS) / sales
![Page 1003: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1003.jpg)
Q502.- capital turnover
![Page 1004: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1004.jpg)
A502.- sales / Capital
![Page 1005: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1005.jpg)
Q503.- 1.Cost of common stock - Ks?- 2. Cost of preferred stock ?- 3.Cost of retained earnings =
![Page 1006: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1006.jpg)
A503.- Dividend / Net Proceeds + G,- G - is a growth rate- Net Proceeds = Price x (1-flotation %) - other charges- 2. Dividend 1 / Market price (1-flotation%) - underpricing- 3.Dividend 1/ Market Price of the stock +G
![Page 1007: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1007.jpg)
Q504.- Current Ratio- is indicator of ____________- Selling Inventory on Account will _________ this ratiob/se ______________- The higher - ________
![Page 1008: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1008.jpg)
A504.- CA/CL- The ability to generate cash to meet short-termobligations- Selling Inventory on Account will INCREASE this ratiob/se A/R > Inventory => CA ↑- The higher - the better
![Page 1009: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1009.jpg)
Q505.- Safety stock =
![Page 1010: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1010.jpg)
A505.- (max lead time - average lead time) x usage,- Usage = annual demand / business days
![Page 1011: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1011.jpg)
Q506.- Reoder Purchase point =
![Page 1012: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1012.jpg)
A506.- average lead time x usage + safety stock
![Page 1013: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1013.jpg)
Q507.- Degree of total leverage =
![Page 1014: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1014.jpg)
A507.- = % change in NI / % change in Sales= DOL x DFL= Degree of Operating Leverage x Degree of FinancialLeverage
![Page 1015: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1015.jpg)
Q508.- Annual Percentage Rate - APR
![Page 1016: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1016.jpg)
A508.- By law, credit card companies and loan issuers mustshow customers the APR- For example, a credit card company might charge 1% amonth,- but the APR is 1% x 12 months = 12%.- APR= Effective periodic rate * # of periods
![Page 1017: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1017.jpg)
Q509.- compound interest
![Page 1018: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1018.jpg)
A509.- FV = Principal × (1+i)^n,- where n = number of periods- i - PERIODIC RATE - annual rate/ n
![Page 1019: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1019.jpg)
Q510.- DOL = ?
![Page 1020: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1020.jpg)
A510.- (% Δ in EBIT) / (% Δ in SALES)- High degree of operating- leverage - firm's profits more sensitive to Δ in SALES- Operating leverage involves using a large proportion offixed costs to variable costs in the operations of the firm.The higher the degree of operating leverage, the morevolatile the EBIT figure will be relative to a given change insales, all other things remaining the same.
![Page 1021: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1021.jpg)
Q511.- DFL=?
![Page 1022: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1022.jpg)
A511.- [% Δ in EPS (or % Δ in NI)] / (% Δ in EBIT)
![Page 1023: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1023.jpg)
Q512.- Effective Interest Rate =
![Page 1024: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1024.jpg)
A512.- Interest / net proceeds,- net proceeds = principal - Interest- COMPENSATINGbalance
![Page 1025: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1025.jpg)
Q513.- To calculate factoring the receivables -
![Page 1026: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1026.jpg)
A513.- 1. annual cost = interest + fees to factor - savings- 2. annual cost / usable funds
![Page 1027: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1027.jpg)
Q514.- Cost of factoring =
![Page 1028: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1028.jpg)
A514.- (interest charged + monthly fees *12 - $$ saved)/ $$$received
![Page 1029: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1029.jpg)
Q515.- Discount CF from Depreciation of an asset
![Page 1030: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1030.jpg)
A515.- CF= cost of an asset x MACRS depreciation rate x tax ratex PV factor of 1
![Page 1031: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1031.jpg)
Q516.- the cost of the bond =
![Page 1032: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1032.jpg)
A516.- interest / $$ received- After tax cost = interest / $$ received * ( 1-tax rate)- Or- [interest payment - tax savings ( interest X tax rate)] / $$received
![Page 1033: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1033.jpg)
Q517.- The effective annualized % cost of financing =
![Page 1034: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1034.jpg)
A517.- {[(Face value + transaction costs)/ borrowed amount]- 1}x periods- (interest + transaction costs) / usable funds × periods
![Page 1035: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1035.jpg)
Q518.- What is the calculation for the interest payment on abond?
![Page 1036: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1036.jpg)
A518.- Stated rate of interest X Par value
![Page 1037: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1037.jpg)
Q519.- ROI is affected by
![Page 1038: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1038.jpg)
A519.- Profit margin= NI / Sales- and- Capital Turnover rate = Sales/ Invested capital- ROI = NI / average invested Capital
![Page 1039: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1039.jpg)
Q520.- Reorder Purchase point =- SStock =
![Page 1040: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1040.jpg)
A520.- = average lead time x usage + safety stock (SS)= (Max - average lead time) x usage
![Page 1041: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1041.jpg)
Q521.- The Effective Annualized % cost of financing =
![Page 1042: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1042.jpg)
A521.- ((Face value + transaction cost) / amount borrowed) - 1) xperiods
![Page 1043: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1043.jpg)
Q522.- A bank charges a rate of 1.5% per month on their creditcard. What Effective Annual Rate (EAR) are they chargingtheir customers.
![Page 1044: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1044.jpg)
A522.- EAR is equal to (1+ APR/12) to the 12th power minus 1.(1+.18/12) to 12th power minus 1.- 19.6% APR is the periodic rate (1.5) times the number ofperiods per year (12) or 18%
![Page 1045: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1045.jpg)
Q523.- NPV vs IRR methods
![Page 1046: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1046.jpg)
A523.- NPV - highlights amounts, more conservative, assumesreinvestment at hurdle rate- IRR - focuses decision makers on %, more aggressive,assumes reinvestment at IRR, less reliable.
![Page 1047: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1047.jpg)
Q524.- Pay Back period (present value factor) =
![Page 1048: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1048.jpg)
A524.- net incremental investment/ net annual cash flows- No consideration of time
![Page 1049: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1049.jpg)
Q525.- When do you accept IRR?
![Page 1050: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1050.jpg)
A525.- when IRR>hurdle (targeted RRR) rate- Reject when IRR< or = hurdle (targeted) rate- IRR> RRR when NPV =0
![Page 1051: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1051.jpg)
Q526.- Compute after tax cash flow
![Page 1052: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1052.jpg)
A526.- = Pre-tax cash flow x (1- tax rate)
![Page 1053: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1053.jpg)
Q527.- 4 steps to calculate NPV
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A527.- 1. Compute after tax cash flow= Pre-tax cash flow x (1- taxrate)- 2. Add depreciation benefit = Depreciation x tax rate- 3. Multiply result by appropriate present value of annuity.- 4 Subtract initial Cash outflow- (Investment)
![Page 1055: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1055.jpg)
Q528.- Pay back period =
![Page 1056: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1056.jpg)
A528.- Net initial investment / Increase in annual net after - taxcash flow- or = Net initial investment / (operating savings + savingsgenerated by depreciation)= Net initial investment / [Operating savings x (1-tax rate) +depreciation exp x tax rate]- Increase in annual net after - tax cash flow = initialinvestment / payback period
![Page 1057: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1057.jpg)
Q529.- When do you accept NPV?
![Page 1058: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1058.jpg)
A529.- Investment should be made if NPV >0.- If company has unlimited funds- NPV > or =0.
![Page 1059: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1059.jpg)
Q530.- NPV is superior to IRR because
![Page 1060: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1060.jpg)
A530.- it is flexible enough to consistently handle either unevencash flows or inconsistent rates of return for each year ofthe project.
![Page 1061: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1061.jpg)
Q531.- Accounting rate of return =
![Page 1062: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1062.jpg)
A531.- (annual savings - Depreciation)/ Required investment
![Page 1063: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1063.jpg)
Q532.- Profitability index =
![Page 1064: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1064.jpg)
A532.- (PV of cash flows) / Initial investment- If Profitability index > 1 --> NPV > 0- It provides the means to rank capital projects w/ differentamounts of investment
![Page 1065: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1065.jpg)
Q533.- What Does Present Value Interest Factor Of Annuity -PVIFA Mean?
![Page 1066: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1066.jpg)
A533.- A factor which can be used to calculate the present valueof a series of annuities.- The initial deposit, earning interest at the periodic rate (r),perfectly finances a series of (N) consecutive dollarwithdrawals.- PVIFA is also a variable used when calculating thepresent value of an ordinary annuity (is an annuity whosepayments are made at the end of each period).- PVIFA = [- (1 + r)^-N]/r
![Page 1067: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1067.jpg)
Q534.- What Does Present Value Interest Factor - PVIF Mean?
![Page 1068: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1068.jpg)
A534.- Using the PVIF works best when you are attempting todiscount one value in the future.
![Page 1069: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1069.jpg)
Q535.- What Does Internal Rate Of Return - IRR Mean?
![Page 1070: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1070.jpg)
A535.- The discount rate often used in capital budgeting thatmakes the net present value of all cash flows from aparticular project equal to zero.- => PV factor x cash inflows = cash investment, solve forPV factor
![Page 1071: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1071.jpg)
Q536.- Popular methods of capital budgeting include
![Page 1072: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1072.jpg)
A536.- net present value (NPV), internal rate of return (IRR),discounted cash flow (DCF) and payback period.
![Page 1073: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1073.jpg)
Q537.- accounting rate of return (ARR)
![Page 1074: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1074.jpg)
A537.- = (Net Cash flow - Depreciation) / investment- - Does not consider the time value of money, It focuseson income and not CFlow- Definition 1: Straight-line' method of estimating averagereturns from an investment, it uses accrual based financialstatements instead of compounded or discounted cashflows. Also called book value method, financial statementmethod, or simple rate of return.- Definition 2: Ratio that expresses the earnings beforeinterest and taxes (EBIT) as a percentage of the capitalemployed at the end of an accounting period.
![Page 1075: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1075.jpg)
Q538.- Return on investment ROI ?
![Page 1076: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1076.jpg)
A538.- Income / Invested Capital- OR- Return on Sales (Profit Margin) x Capital Turnover= Net income/Sales x Sales / Invested capital- Disadvantage - may lead to rejecting projects that yieldpositive cash flows.
![Page 1077: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1077.jpg)
Q539.- Net Present Value =
![Page 1078: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1078.jpg)
A539.- = the PV of an investment's future net cash flows minusthe initial investment.- If positive, the investment should be made (unless aneven better investment exists), otherwise it should not.- the method that recognizes the time value of money bydiscounting the after- tax cash flows over the life of aproject, given the company's minimum desired rate ofreturn.
![Page 1079: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1079.jpg)
Q540.- The payback period serves as a fair approximation of ?
![Page 1080: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1080.jpg)
A540.- of the annuity factor value used in estimating the IRR
![Page 1081: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1081.jpg)
Q541.- ROI return on investment =- Disadvantage -
![Page 1082: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1082.jpg)
A541.- net income/ Invested capitalOR- profit margin (return on Sale) x investment Turnover- Disadvantage - may lead to rejecting projects that yieldpositive cash flows.
![Page 1083: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1083.jpg)
Q542.- NPV =
![Page 1084: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1084.jpg)
A542.- CF- investment
![Page 1085: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1085.jpg)
Q543.- Probability formula
![Page 1086: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1086.jpg)
A543.- 1) find Change in Market Value- 2) Probability factor X Change in value = Cost ofinvestment
![Page 1087: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1087.jpg)
Q544.- The method that recognizes the time value of money bydiscounting the after-tax cash flows over life of a project,given the company's minimum rate of return is
![Page 1088: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1088.jpg)
A544.- NET PRESENT VALUE METHOD
![Page 1089: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1089.jpg)
Q545.- The discounted payback period id the length of the timerequired
![Page 1090: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1090.jpg)
A545.- for discounted cash flows to recover the cost of theinvestment.- Investment = PVF year1 x CF year1 + PVF year2 x CFyear2...
![Page 1091: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1091.jpg)
Q546.- If the discount rate is increased, the PV of the future cashflows will ________
![Page 1092: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1092.jpg)
A546.- decrease
![Page 1093: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1093.jpg)
Q547.- The profitability index is also known as
![Page 1094: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1094.jpg)
A547.- the excess present value index.- it is a variation of NPV
![Page 1095: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1095.jpg)
Q548.- Short-term interest rates are generally ______ than long-term rates
![Page 1096: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1096.jpg)
A548.- LOWER
![Page 1097: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1097.jpg)
Q549.- The payback method doesn't take into account__________
![Page 1098: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1098.jpg)
A549.- the life of the asset, its salvage value or depreciation.
![Page 1099: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1099.jpg)
Q550.- Profitability index =- NPV =- PROJECT Profitability index =
![Page 1100: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1100.jpg)
A550.- PV of CF / Investment- PV of CF - Investment- NPV/ Investment
![Page 1101: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1101.jpg)
Q551.- As Interest Rate get higher, the PV FACTOR for the samenumber of periods becomes ___________
![Page 1102: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1102.jpg)
A551.- smaller.- Smaller FVFactor - HIGHER % RATE
![Page 1103: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1103.jpg)
Q552.- The DISCOUNTED PAYBACK PERIOD is the length oftime required for discounted cash flows to recover the costof the investment. If the DCB is 3 years than INVESTMENT=
![Page 1104: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1104.jpg)
A552.- RV of CF YEAR 1 + PV of CF YEAR 2 + PV of CF YEAR 3
![Page 1105: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1105.jpg)
Q553.- A program that converts a source program intoinstruction codes that the central processing unit canexecute is called
![Page 1106: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1106.jpg)
A553.- A language processor
![Page 1107: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1107.jpg)
Q554.- Central element of Management Information System MISis
![Page 1108: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1108.jpg)
A554.- Processing of data items is based on decision models.
![Page 1109: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1109.jpg)
Q555.- One reason to use RAID - array of inexpensive disks - isto ensure that
![Page 1110: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1110.jpg)
A555.- if one drive fail, all data can still be reconstructed
![Page 1111: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1111.jpg)
Q556.- Critical software application programs should be storedon the server in
![Page 1112: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1112.jpg)
A556.- Object code
![Page 1113: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1113.jpg)
Q557.- ____________ provides instructions to perform a task orjob. It would tell the operating system how to schedule,allocate resources and retrieve data.
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A557.- Job control language
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Q558.- A program that converts PROCEDURE-ORIENTEDlanguage to machine language is
![Page 1116: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1116.jpg)
A558.- A compiler
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Q559.- A distributed/decentralized processing environmentworks best when
![Page 1118: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1118.jpg)
A559.- significant volumes of data are generated at many remotelocations and the user requires immediate access to thedata.
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Q560.- Specialized programs that perform routine and repetitivefunctions are called
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A560.- Service programs
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Q561.- Cyclical fluctuations, random variations, seasonalvariations and secular trend are all components of
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A561.- time series analysis
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Q562.- ID of users who have permission to access data elementsin database is found in the
![Page 1124: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1124.jpg)
A562.- database schema
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Q563.- Which method would provide the best data security for afirm that uses a wide area network WAN?
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A563.- End-to-end encryption
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Q564.- implementing locking procedure could lead to
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A564.- Deadly embraces.- Data locking ensures consistent processing
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Q565.- Exponential smoothing is a statistical method that isuseful as a sales forecasting technique.- Exponential smoothing weights current data heavier than
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A565.- older data- It is used to smooth forecast variation.
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Q566.- ___________ usually involves two or more computersfunctioning simultaneously and allows the sharing of acentral memory during processing
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A566.- Multiprocessing
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Q567.- ___________ allows multiple programs to be executed atexactly the same time
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A567.- Multiprogramming
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Q568.- In the systems development cycle, coding is part of the
![Page 1136: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1136.jpg)
A568.- detailed design phase
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Q569.- The system development cycle consists of (5)
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A569.- analysis- conceptual design- detailed design- implementation- operation
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Q570.- Which characteristic distinguishes electronic datainterchange (EDI) from other forms of electroniccommerce?
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A570.- EDI transactions are formatted using STANDARDS thatare uniform worldwide
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Q571.- Online access controls include :
![Page 1142: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1142.jpg)
A571.- authorized user code numbers- passwords- list of all files and programs and a record of the type ofaccess each user is entitled to have for each file andprogram
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Q572.- A computer system flowchart provides the overall view ofthe inputs, processes and outputs of __________
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A572.- an information system.
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Q573.- When evaluating internal control of an entity thatprocesses sales transactions on the internet, an auditorwould most concern about the:
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A573.- potential for computer disruption in recording sales
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Q574.- One of the risks in distributed system is
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A574.- database INTEGRITY (unity, wholeness ) might not bepreserved during a network or computer failure
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Q575.- Who is responsible for authorizing transactions and forcorrecting errors?
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A575.- Users
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Q576.- Who is responsible for preventing unauthourized physicaland logical access to the system?
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A576.- Security management
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Q577.- Routines that utilize the computer to check the validityand accuracy of TRANSACTION data during input arecalled
![Page 1154: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1154.jpg)
A577.- edit programs- they reject those transactions whose data do not meetpreestablished standards of data quality
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Q578.- The computer operating system performs scheduling,resource allocation and date retrieval functions based on aset of instructions provided by the
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A578.- JOB CONTROL LANGUAGE
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Q579.- Librarian and production control are most likely to beincluded w/in
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A579.- the Operation area of the system department
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Q580.- A decision table indicates the
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A580.- Alternative logic conditions and actions to be taken in aprogram
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Q581.- Operating documentation includes
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A581.- equipment configuration, program and data files, anddescription of conditions that may require programinterruption.
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Q582.- Intranets ( private networks) are characterized by
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A582.- higher security risk and lower costs
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Q583.- Managing the IS function includes
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A583.- charging user departments for computer services, projectdevelopment planning and responsibility accountingprinciples
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Q584.- Validity check use when
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A584.- the data is misspelled of transposed- has typing errors
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Q585.- Optical character recognition OCR software
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A585.- converts images of paper documents as read by scanningdevice into text computer files
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Q586.- Shareware is
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A586.- a program that can be freely copied and tested beforepurchase.- It does NOT transfer data
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Q587.- Linked list is a file structure that
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A587.- has a field that has the address of the next record
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Q588.- Components of the data processing cycle?
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A588.- Collection- refinement (classifying and/or batching)- processing- maintenance (calculation and storage)- output
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Q589.- Authorization controls are implemented usingCOMPATIBILITY TESTS and ACCESS CONTROLMATRICES
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A589.- COMPATIBILITY TESTS - determine if the user isauthorized to perform the desired action.- ACCESS CONTROL MATRICES- 1) is a list of authorized user ID and passwords and- 2) a list of all files, data and programs and the accesseach user has to them
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Q590.- The implementation phase of an acct. softwareapplication would include :
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A590.- obtaining and installing hardware, documenting userprocedures, training users, and entering test data.
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Q591.- A DBMS (database management system) are complexsoftware package which permits users to
![Page 1182: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1182.jpg)
A591.- access information From data base.- DBMS provides for access and identification security,concurrent use of data and backup and recovery.- It DOES NOT run application programs.
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Q592.- The TRANSFORMATION component of IS has which ofthree subsystems?
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A592.- Storage, arithmetic-logic, control subsystem.
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Q593.- If a database has integrity,
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A593.- this means that the database has only CONSISTENT data.
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Q594.- The purpose of a cycle processing control is to mitigatethe risk of :
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A594.- missing or improper transactions
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Q595.- REMOTE BACH processing avoids the need of having
![Page 1190: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1190.jpg)
A595.- a CPU at each user location
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Q596.- Systems analysis is assigned to
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A596.- SYSTEM ANALYST- who helps users to analyze their infoand design IS
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Q597.- Computer operations are assigned to
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A597.- Computer OPERATORS.- Programmers should never have access to computeroperations
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Q598.- Operating systems and compilers assigned to
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A598.- SYSTEM PROGRAMMERS, who use the design developedby the analysts to develop an IS and write the computerprograms.
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Q599.- 5 components of an IT system are:
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A599.- people- procedures- data- software- IT infrastructure
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Q600.- Help desks are usually a responsibility of ____________
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A600.- computer operations
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Q601.- How makes sure that :- a log is kept of all inputs, data processing operation,stored data, and system output- source data have been properly approved- transactions are processed correctly- inputs and outputs are reconciled- records of input errors are maintained- data-related errors are sent to the users who originatedthe transaction fro correction- there is adequate rotation of operator duties
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A601.- CONTROL GROUP
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Q602.- ____________ authorize and record transactions, usesystem output and are responsible for CORRECTINGERRORS.
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A602.- USERS
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Q603.- An IS's _________ is a committee that establish overallpolicy and directions for an organization’s IS.
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A603.- STEERING COMMITTEE
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Q604.- Initiating input/output operations, allocating memory andresponding to interrupts is a functions of- ______________- 2. Translating source code to object code is a functionsof _________- 3. Creating load module libraries is a functions of_________- 4. Mapping virtual views onto base tables is a functions of_________
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A604.- 1. OPERATING SYSTEM- 2. COMPILERS AND INTERPRETERS- 3 LINKAGE EDITOR- 4 DATABASE MANAGEMENT SYSTEM
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Q605.- Knowledge-based systems use symbolic processingbased on ___________ - rules-of-thumb.
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A605.- HEURISTICS
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Q606.- A computer system that allows management to makeunstructured decisions concerning company futureis___________
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A606.- A STRATEGIC INFORMATION SYSTEM
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Q607.- _____________ connects dissimilar networks- _____________ connects network segments
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A607.- GATEWAY- BRIDGE
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Q608.- A program that converts a source program intoinstruction codes that CPU can execute is called
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A608.- LANGUAGE PROCESSOR
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Q609.- Sales Volume variance =
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A609.- (Actual units sold - Budgeted sales units) x Standardcontribution per unit- Like Q variance : AQ x SP - SQ x SP
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Q610.- Prime costs are ________ costs
![Page 1220: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1220.jpg)
A610.- variable
![Page 1221: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1221.jpg)
Q611.- Sale in UNITS =
![Page 1222: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1222.jpg)
A611.- sale / sale per unit
![Page 1223: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1223.jpg)
Q612.- Summary:- What are the six main formulas for calculatingbreakeven?
![Page 1224: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1224.jpg)
A612.- CM = SRev - Var Costs- CMU = SPU - VCU- BPU = TFC/CMU- BPD = TFC/CMR- CMR = CM/SRev- BP w/Targeted Profit = TFC/CMU or CMR
![Page 1225: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1225.jpg)
Q613.- Calculate Equivalent units W-average and FIFO
![Page 1226: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1226.jpg)
A613.- Units completed ___________ XXX- Ending WIP % x completed + XXX- Weighted-average Equivalent units =XXX- Beginning WIP % x completed - XXX- FIFO Equivalent units ________=XXX
![Page 1227: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1227.jpg)
Q614.- PRICE VARIANCE?
![Page 1228: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1228.jpg)
A614.- (1) AQ X AP ____(2)AQ x SP_____ (3) SQ x SP- PRICE VARIANCE = (1) – (2)- Materials purchase price variance- Labor rate variances- Variable OH spending variance
![Page 1229: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1229.jpg)
Q615.- QUANTITY VARIANCE?
![Page 1230: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1230.jpg)
A615.- QUANTITY VARIANCE = (2) – (3)- Materials quantity variance- Labor efficiency variances- Variable OH efficiency variance- (1) AQ X AP ____(2)AQ x SP_____ (3) SQ x SP
![Page 1231: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1231.jpg)
Q616.- To calculate the difference in NI using Variable costing VSAbsorption costing:
![Page 1232: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1232.jpg)
A616.- If level of Production if > than level of sale -> NI underVariable costing is < than under Absorption costing.To calculate- 1) Difference in units = Production – sale units.- 2) Difference in NI = (1) X Fixed cost / production units.- Variable costing = DL + DM + Variable OH.
![Page 1233: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1233.jpg)
Q617.- Formation of General Partnership
![Page 1234: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1234.jpg)
A617.- No formalities.- Can be formed by verbal or written agreement, or mereconduct.
![Page 1235: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1235.jpg)
Q618.- Liability of Owners of a General Partnership
![Page 1236: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1236.jpg)
A618.- Unlimited personal liability for all partnership obligations.
![Page 1237: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1237.jpg)
Q619.- Management of General Partnership
![Page 1238: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1238.jpg)
A619.- Owners can manage directly or can agree to appoint amanaging partner.
![Page 1239: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1239.jpg)
Q620.- Transferability of a General Partnership
![Page 1240: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1240.jpg)
A620.- Partnership cannot transfer ownership interest withoutunanimous consent.
![Page 1241: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1241.jpg)
Q621.- Taxation of a General Partnership
![Page 1242: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1242.jpg)
A621.- "flow through" taxation.
![Page 1243: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1243.jpg)
Q622.- Formation of a Limited Partnership
![Page 1244: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1244.jpg)
A622.- Formalities:- File Certificate of Limited Partnership with state.
![Page 1245: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1245.jpg)
Q623.- Liability of owners of a Limited Partnership
![Page 1246: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1246.jpg)
A623.- General Partner: unlimited personal liability- Limited Partner: Only investment is at risk.
![Page 1247: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1247.jpg)
Q624.- Management of Limited Partnership
![Page 1248: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1248.jpg)
A624.- General Partner(s) is(are) exclusive manager(s)- Limited Partners cannot manage.
![Page 1249: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1249.jpg)
Q625.- Transferability of Limited Partnership
![Page 1250: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1250.jpg)
A625.- Partners cannot transfer ownership without unanimousconsent.
![Page 1251: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1251.jpg)
Q626.- Taxation of Limited Partnership
![Page 1252: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1252.jpg)
A626.- "flow through" taxation, but limited partners have passiveloss restrictions.
![Page 1253: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1253.jpg)
Q627.- Formation of a Corporation
![Page 1254: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1254.jpg)
A627.- Formalities:- File Articles of Incorporation or Corporate Charter withstate
![Page 1255: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1255.jpg)
Q628.- Liability of owners of a Corporation
![Page 1256: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1256.jpg)
A628.- Shareholders generally not personally liable beyond theirinvestment.
![Page 1257: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1257.jpg)
Q629.- Management of a Corporation
![Page 1258: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1258.jpg)
A629.- Managed by Board of Directors, who appoint officers torun day-to-day operations.
![Page 1259: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1259.jpg)
Q630.- Transferability of Corporation
![Page 1260: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1260.jpg)
A630.- Shareholders are free to transfer ownership interestunless they agree otherwise.
![Page 1261: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1261.jpg)
Q631.- Taxation of corporation
![Page 1262: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1262.jpg)
A631.- Income taxed at corporate level and taxed again toshareholders when dividends are distributed.
![Page 1263: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1263.jpg)
Q632.- Formation of S Corp
![Page 1264: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1264.jpg)
A632.- Formalities:- File Articles of Incorporation or Corporate Charter withstate.- File 'S' election
![Page 1265: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1265.jpg)
Q633.- Liability of owners of S Corp
![Page 1266: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1266.jpg)
A633.- shareholders generally not personally liable beyond theirinvestment
![Page 1267: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1267.jpg)
Q634.- Management of S Corp
![Page 1268: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1268.jpg)
A634.- Managed by Board of Directors, who appoint officers torun day-to-day operations.
![Page 1269: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1269.jpg)
Q635.- Transferability of S Corp
![Page 1270: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1270.jpg)
A635.- Shareholders may transfer ownership unless they agreeotherwise, but can't transfer to foreign or entityshareholders
![Page 1271: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1271.jpg)
Q636.- Taxation of S Corp
![Page 1272: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1272.jpg)
A636.- "Flow through" taxation but shareholders NOT managinghave passive loss restrictions.
![Page 1273: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1273.jpg)
Q637.- Formation of LLC
![Page 1274: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1274.jpg)
A637.- Formalities:- File Articles of Organization with state
![Page 1275: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1275.jpg)
Q638.- Liability of owners of LLC
![Page 1276: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1276.jpg)
A638.- Members generally not personally liable beyond theirinvestment
![Page 1277: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1277.jpg)
Q639.- Management of LLC
![Page 1278: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1278.jpg)
A639.- Members manage directly or can agree to appoint amanager
![Page 1279: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1279.jpg)
Q640.- Transferability of LLC
![Page 1280: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1280.jpg)
A640.- Absent agreement otherwise, members cannot transferownership without unanimous consent.
![Page 1281: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1281.jpg)
Q641.- Taxation of LLC
![Page 1282: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1282.jpg)
A641.- "Flow through" taxation but members not managing havepassive loss restrictions.
![Page 1283: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1283.jpg)
Q642.- Formation of LLP
![Page 1284: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1284.jpg)
A642.- Formalities:- File Statement of Qualification with state
![Page 1285: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1285.jpg)
Q643.- Liability of owners of LLP
![Page 1286: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1286.jpg)
A643.- Partners are generally not liable for partnershipobligations unless caused by their own negligence.
![Page 1287: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1287.jpg)
Q644.- Management of LLP
![Page 1288: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1288.jpg)
A644.- Partners manage directly or can agree to appoint amanaging partner
![Page 1289: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1289.jpg)
Q645.- Transferability
![Page 1290: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1290.jpg)
A645.- Partners cannot transfer ownership interest withoutunanimous consent.
![Page 1291: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1291.jpg)
Q646.- Taxation of LLP
![Page 1292: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1292.jpg)
A646.- "Flow through" taxation but partners not managing havepassive loss restrictions.
![Page 1293: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1293.jpg)
Q647.- Formation of Sole Prop
![Page 1294: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1294.jpg)
A647.- Nothing need be filed.
![Page 1295: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1295.jpg)
Q648.- Liability of owner of Sole Prop
![Page 1296: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1296.jpg)
A648.- Personally liable for ALL obligations of the business.
![Page 1297: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1297.jpg)
Q649.- Life of Sole Prop
![Page 1298: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1298.jpg)
A649.- Limited.
![Page 1299: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1299.jpg)
Q650.- Tax treatment of Sole Prop
![Page 1300: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1300.jpg)
A650.- Flow through
![Page 1301: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1301.jpg)
Q651.- Transferability of Sole Prop
![Page 1302: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1302.jpg)
A651.- free to transfer interest at will
![Page 1303: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1303.jpg)
Q652.- Macroeconomics
![Page 1304: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1304.jpg)
A652.- Study of they economy as a whole
![Page 1305: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1305.jpg)
Q653.- Microeconomics
![Page 1306: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1306.jpg)
A653.- Study of consumers, producers, and suppliers operatingin a narrowly defined market.
![Page 1307: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1307.jpg)
Q654.- GDP
![Page 1308: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1308.jpg)
A654.- The total market value of all final goods and servicesproduced within the borders of a nation in a particular timeperiod.
![Page 1309: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1309.jpg)
Q655.- Nominal GDP
![Page 1310: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1310.jpg)
A655.- Measures the value of all final goods and services incurrent prices - no inflation adjustment.
![Page 1311: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1311.jpg)
Q656.- Real GDP
![Page 1312: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1312.jpg)
A656.- Adjusted to account for changes in the price level (itremoves the effects of inflation using a price index)
![Page 1313: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1313.jpg)
Q657.- Price Index/GDP Deflator- (Equation for Real GDP)
![Page 1314: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1314.jpg)
A657.- Nominal GDP/GDP Deflator X 100
![Page 1315: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1315.jpg)
Q658.- Expansionary Phase
![Page 1316: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1316.jpg)
A658.- Rising economic activity (real GDP) and growth.
![Page 1317: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1317.jpg)
Q659.- Peak
![Page 1318: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1318.jpg)
A659.- A high point of economic activity.
![Page 1319: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1319.jpg)
Q660.- Contractionary Phase
![Page 1320: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1320.jpg)
A660.- Falling economic activity and growth and follows a peak.
![Page 1321: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1321.jpg)
Q661.- Trough
![Page 1322: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1322.jpg)
A661.- A low point of economic activity.
![Page 1323: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1323.jpg)
Q662.- Recovery Phase
![Page 1324: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1324.jpg)
A662.- Follows a trough.- Economic activity begins to increase and return to itslong-term growth trend.- AKA - expansionary phase
![Page 1325: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1325.jpg)
Q663.- Recession
![Page 1326: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1326.jpg)
A663.- Two consecutive quarters of falling national output.
![Page 1327: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1327.jpg)
Q664.- Depression
![Page 1328: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1328.jpg)
A664.- A very severe recession.
![Page 1329: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1329.jpg)
Q665.- What are three economic indicators?
![Page 1330: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1330.jpg)
A665.- 1. leading indicators- 2. lagging indicators- 3. coincident indicators
![Page 1331: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1331.jpg)
Q666.- Leading Indicators
![Page 1332: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1332.jpg)
A666.- Tend to predict economic activity...- average new unemployment claims, building permits forresidences, average length of the workweek, moneysupply, prices of selected stocks, orders for goods, pricechanges of materials, index of consumer expectations.
![Page 1333: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1333.jpg)
Q667.- Lagging Indicators
![Page 1334: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1334.jpg)
A667.- Tend to follow economic activity...- Prime rate charged by banks, average duration ofunemployment, bank loans outstanding.
![Page 1335: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1335.jpg)
Q668.- Coincident Indicators
![Page 1336: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1336.jpg)
A668.- Tend to occur coincident to economic activity...- Industrial production, manufacturing and trade sales.
![Page 1337: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1337.jpg)
Q669.- Business cycles result from...
![Page 1338: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1338.jpg)
A669.- shifts in aggregate demand and/or aggregate supply.
![Page 1339: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1339.jpg)
Q670.- What is the effect of a REDUCTION in demand on GDPand Prices?
![Page 1340: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1340.jpg)
A670.- AD curve shifts left.- AD decreases.- GDP decreases.- Price decreases.
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Q671.- What is the effect of an INCREASE in demand on GDPand Prices?
![Page 1342: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1342.jpg)
A671.- AD curve shifts right.- AD increases.- GDP increases.- Price increases.
![Page 1343: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1343.jpg)
Q672.- What is the effect of a REDUCTION of supply on GDP andPrices?
![Page 1344: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1344.jpg)
A672.- SRAS shifts left (decreases)- GDP decreases.- Price increases.
![Page 1345: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1345.jpg)
Q673.- What is the effect of an INCREASE of supply on GDP andPrices?
![Page 1346: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1346.jpg)
A673.- SRAS shifts right (increase)- GDP increases.- Price decreases.
![Page 1347: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1347.jpg)
Q674.- What are SIX factors that shift aggregate demand?
![Page 1348: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1348.jpg)
A674.- 1. Changes in Wealth- 2. Changes in real interest rates- 3. changes in consumer confidence- 4. Changes in exchange rates- 5. Changes in govt. spending- 6. Changes in consumer taxes.
![Page 1349: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1349.jpg)
Q675.- Multiplier effect
![Page 1350: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1350.jpg)
A675.- An increase in consumer, firm, or government spending,produces a multiplied increase in the level of economicactivity.
![Page 1351: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1351.jpg)
Q676.- Formula for the Multiplier Effect
![Page 1352: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1352.jpg)
A676.- 1 / (1-MPC) x Change in Spending- MPC-Marginal Propensity to Consume- MPS-Marginal Propensity to Save- MPS= 1 - MPC
![Page 1353: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1353.jpg)
Q677.- What are TWO factors that shift short-run aggregatesupply?
![Page 1354: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1354.jpg)
A677.- 1. Changes in input (resource) prices- 2. Supply Shocks
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Q678.- Four most commonly cited economic measures.
![Page 1356: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1356.jpg)
A678.- 1. real GDP- 2. unemployment rate- 3. inflation rate- 4. interest rates
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Q679.- Two methods of measuring/calculating GDP.
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A679.- 1. Expenditure Approach- 2. Income Approach
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Q680.- Under the expenditure approach, GDP is the sum of whatfour components?- "GICE"
![Page 1360: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1360.jpg)
A680.- Government purchases- Investment- Consumption (personal)- net Exports (exports minus imports)
![Page 1361: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1361.jpg)
Q681.- Under the income approach, GDP is the sum of what eightcomponents?- "I PIRATED"
![Page 1362: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1362.jpg)
A681.- Income of proprietors- Profits of corporations- Interest (net)- Rental income- Adjustments for net foreign income- Taxes (indirect business taxes)- Employee wages- Depreciation
![Page 1363: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1363.jpg)
Q682.- Gross National Product
![Page 1364: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1364.jpg)
A682.- The market value of final goods and services produced byRESIDENTS of a country in a given time period.
![Page 1365: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1365.jpg)
Q683.- Unemployment Rate
![Page 1366: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1366.jpg)
A683.- Measures the ratio of the number of people classified asunemployed to the total labor force.
![Page 1367: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1367.jpg)
Q684.- Total labor force.
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A684.- Includes all non-institutionalized individuals 16 years ofage or older who are either working or actively looking forwork.
![Page 1369: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1369.jpg)
Q685.- Formula for unemployment rate.
![Page 1370: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1370.jpg)
A685.- #unemployed/total labor force x 100
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Q686.- Four types of unemployment.
![Page 1372: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1372.jpg)
A686.- 1. frictional- 2. structural- 3. seasonal- 4. cyclical
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Q687.- Frictional unemployment
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A687.- Normal unemployment resulting from workers routinelychanging jobs or from workers being temporarily laid off.
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Q688.- Structural Unemployment
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A688.- Jobs available in the market do not correspond to theskills of the work force AND unemployed workers do notlive where the jobs are located.
![Page 1377: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1377.jpg)
Q689.- Seasonal Unemployment
![Page 1378: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1378.jpg)
A689.- The result of seasonal changes in demand and supply oflabor.
![Page 1379: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1379.jpg)
Q690.- Cyclical Unemployment
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A690.- The amount of unemployment resulting from declines inread GDP during periods of contraction or recession or inany period when the economy fails to operate at itspotential.
![Page 1381: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1381.jpg)
Q691.- Natural rate of unemployment
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A691.- The normal rate of unemployment.- Sum of frictional, structural, and seasonal unemployment.
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Q692.- Full employment
![Page 1384: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1384.jpg)
A692.- Level of unemployment when there is no cyclicalunemployment. Does not mean zero unemployment.
![Page 1385: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1385.jpg)
Q693.- Relationship between unemployment and output/realGDP.
![Page 1386: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1386.jpg)
A693.- Move in opposite directions.
![Page 1387: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1387.jpg)
Q694.- Inflation.
![Page 1388: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1388.jpg)
A694.- A sustained increase in the general prices of goods andservices.- It occurs when prices on average are increasing overtime.
![Page 1389: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1389.jpg)
Q695.- Deflation
![Page 1390: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1390.jpg)
A695.- A sustained decrease in the general prices of goods andservices.- It occurs when prices on average are falling over time.Bigger problem than inflation.
![Page 1391: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1391.jpg)
Q696.- Inflation/Deflation Rate is measure as...
![Page 1392: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1392.jpg)
A696.- % change in Consumer Price Index
![Page 1393: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1393.jpg)
Q697.- Consumer Price Index
![Page 1394: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1394.jpg)
A697.- A measure of the overall cost of a fixed basket of goodsand services purchased by an average household.
![Page 1395: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1395.jpg)
Q698.- Formula for Inflation Rate- (change in CPI)
![Page 1396: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1396.jpg)
A698.- (CPI this period - CPI last period)- Divided by CPI last period- Multiply by 100
![Page 1397: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1397.jpg)
Q699.- Inflation and Deflation are caused by...
![Page 1398: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1398.jpg)
A699.- ...shifts in the aggregate demand and short-run aggregatesupply curves.
![Page 1399: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1399.jpg)
Q700.- Demand-Pull Inflation
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A700.- Caused by increases in aggregate demand.
![Page 1401: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1401.jpg)
Q701.- Cost-Push Inflation
![Page 1402: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1402.jpg)
A701.- Caused be reductions in short-run aggregate supply.
![Page 1403: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1403.jpg)
Q702.- Relationship of Inflation and Purchasing Power
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A702.- Inverse relationship.
![Page 1405: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1405.jpg)
Q703.- During a period of inflation, holding monetary assets...
![Page 1406: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1406.jpg)
A703.- will hurt those with a fixed amount of money or income.
![Page 1407: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1407.jpg)
Q704.- During a period of inflation, holding monetary liabilities...
![Page 1408: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1408.jpg)
A704.- will aid those with a fixed amount of debt.
![Page 1409: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1409.jpg)
Q705.- Nominal interest rate
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A705.- The amount of interest paid or earned measured incurrent dollars.
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Q706.- Real interest rate
![Page 1412: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1412.jpg)
A706.- the nominal interest rate minus the inflation rate.
![Page 1413: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1413.jpg)
Q707.- Money
![Page 1414: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1414.jpg)
A707.- Set of liquid assets that are generally accepted inexchange for goods and services.
![Page 1415: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1415.jpg)
Q708.- Money Supply
![Page 1416: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1416.jpg)
A708.- The stock of all liquid assets available for transactions inthe economy at any given point in time.
![Page 1417: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1417.jpg)
Q709.- M1
![Page 1418: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1418.jpg)
A709.- Money that is used for purchases of goods and services.Typically does NOT include savings accounts or CDs.
![Page 1419: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1419.jpg)
Q710.- M2
![Page 1420: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1420.jpg)
A710.- M1 plus liquid assets that cannot be used as a medium ofexchange but that can be converted easily into checkabledeposits or other components of M1.
![Page 1421: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1421.jpg)
Q711.- M3
![Page 1422: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1422.jpg)
A711.- M2 plus time CDs in excess of $100,000.
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Q712.- Monetary Policy
![Page 1424: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1424.jpg)
A712.- The use of the money supply to stabilize the economy.
![Page 1425: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1425.jpg)
Q713.- Three ways the Fed controls the money supply.
![Page 1426: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1426.jpg)
A713.- 1. Open Market Operations (OMO)- 2. Changes in the Discount Rate- 3. Changes in the Required Reserve Rate (RRR)
![Page 1427: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1427.jpg)
Q714.- Open Market Operations
![Page 1428: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1428.jpg)
A714.- Purchase and sale of government securities in the openmarket.
![Page 1429: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1429.jpg)
Q715.- Changes in the Discount Rate
![Page 1430: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1430.jpg)
A715.- The interest rate the Fed charges member banks forshort-term (normally overnight) loans.
![Page 1431: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1431.jpg)
Q716.- Changes in the Required Reserve Ratio
![Page 1432: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1432.jpg)
A716.- Fraction of total deposits banks must hold in reserve.
![Page 1433: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1433.jpg)
Q717.- Eight Steps in Strategic Management
![Page 1434: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1434.jpg)
A717.- 1. Define the firm's vision and mission statements- 2. Set the goals of the firm- 3. Define the objectives of the firm- 4. Decide what to measure and take a baselinemeasurement- 5. Strategic analysis (SWOT)- 6. Create the strategic plan- 7. Implement the strategic plan- 8. Evaluate and revise the plan as necessary
![Page 1435: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1435.jpg)
Q718.- Two broad and distinct paths for achieving organizationgoals
![Page 1436: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1436.jpg)
A718.- 1. cost leadership- 2. differentiation
![Page 1437: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1437.jpg)
Q719.- Financial objectives
![Page 1438: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1438.jpg)
A719.- The improvement of the overall financial outcomes of afirm's strategy.
![Page 1439: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1439.jpg)
Q720.- Non-financial objectives
![Page 1440: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1440.jpg)
A720.- The improvement of the overall ability of the firm tocompete in the market in the long run, which is the ultimatefocus for overall shareholder wealth maximization.
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Q721.- SWOT analysis
![Page 1442: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1442.jpg)
A721.- Strengths (internal)- Weaknesses (internal)- Opportunities (external)- Threats (external)
![Page 1443: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1443.jpg)
Q722.- Change in Quantity Demanded
![Page 1444: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1444.jpg)
A722.- A change in the amount of a good demanded resultingsolely from a change in price - movements along thedemand curve (D).
![Page 1445: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1445.jpg)
Q723.- Change in Demand
![Page 1446: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1446.jpg)
A723.- A change in the amount of a good demanded resultingfrom a change in something other than the price of thegood - shift of the demand curve.
![Page 1447: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1447.jpg)
Q724.- Demand Curve
![Page 1448: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1448.jpg)
A724.- The maximum quantity of good consumers is willing andable to purchase at each and every price, all else equal.
![Page 1449: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1449.jpg)
Q725.- Fundamental Law of Demand
![Page 1450: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1450.jpg)
A725.- Quantity demanded is inversely related to price.
![Page 1451: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1451.jpg)
Q726.- Two reasons quantity demanded is inversely related toprice.
![Page 1452: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1452.jpg)
A726.- 1. substitution effect- 2. income effect
![Page 1453: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1453.jpg)
Q727.- Substitution Effect
![Page 1454: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1454.jpg)
A727.- Consumers tend to purchase more/less of a good whenits price falls/rises in relation to the price of other goods.
![Page 1455: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1455.jpg)
Q728.- Income Effect
![Page 1456: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1456.jpg)
A728.- As prices are lowered with income remaining constant,people will purchase more of all of the lower pricedproducts.
![Page 1457: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1457.jpg)
Q729.- Factors that Shift Demand Curves- (WRITEN)
![Page 1458: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1458.jpg)
A729.- Changes in Wealth- Change in the price of Related Goods- Changes in Consumer Income- Changes in Consumer Tastes- Changes in Consumer Expectations- Changes in the Number of buyers
![Page 1459: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1459.jpg)
Q730.- Fundamental Law of Supply
![Page 1460: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1460.jpg)
A730.- Price and Quantity supplied are positively related.
![Page 1461: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1461.jpg)
Q731.- Supply Curve
![Page 1462: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1462.jpg)
A731.- The maximum quantity of good sellers is willing and ableto produce at each and every price, all else equal.
![Page 1463: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1463.jpg)
Q732.- Quantity supplied
![Page 1464: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1464.jpg)
A732.- Quantity supplied is the amount of a good that producersare willing and able to produce at each and every price, allelse equal.
![Page 1465: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1465.jpg)
Q733.- Change in Quantity Supplied
![Page 1466: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1466.jpg)
A733.- A change in the amount producers are willing and able toproduce resulting solely from a change in price -movement along the supply curve.
![Page 1467: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1467.jpg)
Q734.- Change in Supply
![Page 1468: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1468.jpg)
A734.- A change in the amount of a good supplied resulting froma change in something other than the price of a good - shiftin the supply curve.
![Page 1469: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1469.jpg)
Q735.- Factors that shift supply curves- (ECOST)
![Page 1470: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1470.jpg)
A735.- Changes in price Expectations of the supplying firm.- Changes in production Costs- Changes in the price or demand for Other goods- Changes in Subsidies or taxes- Changes in production Technology
![Page 1471: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1471.jpg)
Q736.- Market Equilibrium
![Page 1472: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1472.jpg)
A736.- There are no forces acting to change the currentprice/quantity combination. The market's equilibrium priceand output/qty is the point where the supply and demandcurves intersect.
![Page 1473: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1473.jpg)
Q737.- Elasticity
![Page 1474: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1474.jpg)
A737.- A measure of how sensitive the demand for or the supplyof a products is to a change in its price.
![Page 1475: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1475.jpg)
Q738.- Two ways to measure Price Elasticity of Demand
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A738.- 1. Point Method- 2. Midpoint Method
![Page 1477: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1477.jpg)
Q739.- Point Method
![Page 1478: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1478.jpg)
A739.- %change in qty demanded/%change in price
![Page 1479: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1479.jpg)
Q740.- Midpoint Method
![Page 1480: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1480.jpg)
A740.- [(Q2-Q1) / (Q2+Q1)] Divided By [(P2-P1) / (P2+P1)]
![Page 1481: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1481.jpg)
Q741.- If absolute value of Price Elasticity of demand is < 1.0
![Page 1482: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1482.jpg)
A741.- Inelastic
![Page 1483: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1483.jpg)
Q742.- If absolute value of Price Elasticity of demand is > 1.0
![Page 1484: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1484.jpg)
A742.- Elastic
![Page 1485: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1485.jpg)
Q743.- Four market structures
![Page 1486: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1486.jpg)
A743.- 1. Perfect/Pure Competition- 2. Monopolistic Competition- 3. Oligopoly- 4. Monopoly
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Q744.- Characteristics of Perfect/Pure Competition
![Page 1488: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1488.jpg)
A744.- very competitive- no individual firm can influence market price- large number of suppliers and customers actingindependently- very little product differentiation- no barriers to entry- Example: bottled water
![Page 1489: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1489.jpg)
Q745.- Characteristics of a Monopoly
![Page 1490: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1490.jpg)
A745.- least competitive- strategic plans ignore market share and focus onprofitability- concentration of supply in the hands of a single firm- single firm with unique product- significant barriers to market entry- firm has ability to set output and prices- no substitute products
![Page 1491: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1491.jpg)
Q746.- Characteristics of Monopolistic Competition
![Page 1492: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1492.jpg)
A746.- plan for enhanced product differentiation and extensiveallocation of resources to advertising, marketing, productresearch, etc.- many sellers compete to sell a differentiated product in amarket- numerous firms w/ differentiated products- few barriers to entry- exert some influence over price and market- significant non-price competition in the market (brandawareness/loyalty)
![Page 1493: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1493.jpg)
Q747.- Characteristics of an Oligopoly
![Page 1494: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1494.jpg)
A747.- few firms with differentiated products- fairly significant barriers to entry- strongly independent firms- prices tend to be fixed- face a kinked demand curve
![Page 1495: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1495.jpg)
Q748.- Kinked Demand Curve
![Page 1496: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1496.jpg)
A748.- Firm match price cuts of competitors, but ignore priceincreases- different slopes above and below the prevailing price
![Page 1497: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1497.jpg)
Q749.- Five forces that affect the competitive environment
![Page 1498: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1498.jpg)
A749.- 1. Barriers to Entry- 2. Market competitiveness (intensity)- 3. Existence of substitute products- 4. Bargaining power of customers- 5. Bargaining power of suppliers
![Page 1499: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1499.jpg)
Q750.- Five basic types of competitive strategies
![Page 1500: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1500.jpg)
A750.- 1. Cost leadership focused on a broad range of buyers- 2. cost leadership focused on a narrow range (niche) ofbuyers- 3. Differentiation focused on a broad range of buyers- 4. differentiation focused on a narrow range (niche) ofbuyers- 5. Best cost provider (combo)
![Page 1501: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1501.jpg)
Q751.- Transaction Exposure
![Page 1502: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1502.jpg)
A751.- The potential that an organization could suffer economicloss or experience economic gain upon settlement ofindividual transactions as a result of changes in theexchange rates.
![Page 1503: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1503.jpg)
Q752.- Economic Exposure
![Page 1504: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1504.jpg)
A752.- The potential that the PV of an organization's cash flowscould increase or decrease as a result of changes in theexchange rates.
![Page 1505: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1505.jpg)
Q753.- Translation Exposure
![Page 1506: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1506.jpg)
A753.- The potential that assets, liabilities, equity, or income of aconsolidated organization that includes foreignsubsidiaries will change as a result of changes in theexchange rates and defines the effect of exchange ratefluctuations on financial position and operations.
![Page 1507: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1507.jpg)
Q754.- Futures Hedge
![Page 1508: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1508.jpg)
A754.- Entitles its holder to either purchase or sell a particularnumber of currency units of an identified currency for anegotiated price on a stated date.
![Page 1509: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1509.jpg)
Q755.- Forward Hedge
![Page 1510: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1510.jpg)
A755.- Same as futures hedge, but much larger amounts.
![Page 1511: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1511.jpg)
Q756.- Money market hedge
![Page 1512: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1512.jpg)
A756.- Uses international money markets to plan to meet futurecurrency requirements.
![Page 1513: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1513.jpg)
Q757.- Transfer Pricing
![Page 1514: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1514.jpg)
A757.- Claim profits in the country with the lowest tax rate.
![Page 1515: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1515.jpg)
Q758.- How to calculate NPV?
![Page 1516: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1516.jpg)
A758.- 1. calc after tax cash flows=annual net cash flow x (1-taxrate)- 2. add depr benefit =depr x tax rate- 3. multiply result by appropriate PV of an annuity- 4. subtract initial cash outflow- Result=Net Present Value
![Page 1517: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1517.jpg)
Q759.- How to calculate payback period?
![Page 1518: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1518.jpg)
A759.- net initial investment / increase in annual net after - taxcash flow
![Page 1519: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1519.jpg)
Q760.- What are the two advantages of the Payback method?
![Page 1520: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1520.jpg)
A760.- 1. easy to use and understand- 2. emphasis on liquidity
![Page 1521: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1521.jpg)
Q761.- What are the four limitations of the payback method?
![Page 1522: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1522.jpg)
A761.- 1. time value of money is ignored- 2. projected cash flows after initial investment is requiredare not considered- 3. reinvestment of cash flows is not considered- 4. total project profitability is neglected.
![Page 1523: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1523.jpg)
Q762.- Describe the Discounted Payback Method.
![Page 1524: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1524.jpg)
A762.- Computes the payback period using expected cash flowsthat are discounted by the project's cost of capital (alsoreferred to as "breakeven time method" or BET)
![Page 1525: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1525.jpg)
Q763.- What are the two advantages of the NPV method?
![Page 1526: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1526.jpg)
A763.- 1. flexible- 2. can be used when there is no constant rate of returnrequired for each year of the project
![Page 1527: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1527.jpg)
Q764.- What is the limitation of the NPV method?
![Page 1528: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1528.jpg)
A764.- Does not provide the true rate of return on theinvestment.
![Page 1529: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1529.jpg)
Q765.- What are the 5 steps to determine IRR?
![Page 1530: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1530.jpg)
A765.- 1. determine life of asset (#periods)- 2. calc payback period- 3. determine which table to use PV of annuity or PV of $1- 4. find closest factor to payback period using the numberof periods- 5. interest rate that corresponds is IRR.
![Page 1531: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1531.jpg)
Q766.- What are the three limitations of IRR?
![Page 1532: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1532.jpg)
A766.- 1. unreasonable reinvestment assumption- 2. inflexible cash flow assumptions- 3. evaluates alternatives only based on interest rates
![Page 1533: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1533.jpg)
Q767.- What is the profitability index?
![Page 1534: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1534.jpg)
A767.- PV net future CF/PV net initial investment
![Page 1535: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1535.jpg)
Q768.- Formula: Working Capital
![Page 1536: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1536.jpg)
A768.- CA-CL=WC
![Page 1537: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1537.jpg)
Q769.- Current ratio
![Page 1538: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1538.jpg)
A769.- CA/CL
![Page 1539: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1539.jpg)
Q770.- Quick (Acid Test) ratio
![Page 1540: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1540.jpg)
A770.- (Cash + market securities + receivables) divide by CL
![Page 1541: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1541.jpg)
Q771.- What are three motives for holding cash?
![Page 1542: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1542.jpg)
A771.- 1. transaction motive- 2. speculative motive- 3. precautionary motive
![Page 1543: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1543.jpg)
Q772.- What are three disadvantages of high cash levels?
![Page 1544: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1544.jpg)
A772.- 1. negative arbitrage effect- 2. increased attractiveness as a takeover target- 3. investor dissatisfaction w/ allocation of assets
![Page 1545: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1545.jpg)
Q773.- What is the formula for the annual cost/APR of a quickpayment discount?
![Page 1546: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1546.jpg)
A773.- [360 / (pay period - discount period)] × (discount / 100 –discount)
![Page 1547: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1547.jpg)
Q774.- What are two ways to expedite deposits?
![Page 1548: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1548.jpg)
A774.- 1. EFT- 2. Lock box systems
![Page 1549: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1549.jpg)
Q775.- What are four methods to delay payments?
![Page 1550: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1550.jpg)
A775.- 1. defer payments- 2. drafts (checks)- 3. line of credit- 4. zero balance accounts
![Page 1551: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1551.jpg)
Q776.- What is the cash conversion cycle formula?
![Page 1552: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1552.jpg)
A776.- inventory conversion period (low)- + receivables collection period (low)- - payables deferral period (high)
![Page 1553: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1553.jpg)
Q777.- What is the formula for the inventory conversion period?
![Page 1554: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1554.jpg)
A777.- Average inventory/average cost of sales per day
![Page 1555: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1555.jpg)
Q778.- What is the formula for the receivables collection period?Days sales outstanding (DSO)
![Page 1556: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1556.jpg)
A778.- average receivables/average sales per day
![Page 1557: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1557.jpg)
Q779.- What is the formula for the payables deferral period?
![Page 1558: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1558.jpg)
A779.- average payables/average purchases per day
![Page 1559: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1559.jpg)
Q780.- What is the computation of the annual cost of factoringA/R?
![Page 1560: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1560.jpg)
A780.- 1. AR * fee%- 2. AR-withheld * interest- 3. subtotal: cost to company- 4. subtract collections expense saved- 5. subtotal: net cost- 6. net cost/amt subject to interest- =APR
![Page 1561: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1561.jpg)
Q781.- What is the formula for # days receivables outstanding?(average collection period)
![Page 1562: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1562.jpg)
A781.- ending AR/Average daily sales
![Page 1563: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1563.jpg)
Q782.- What are the four carrying costs of inventory?
![Page 1564: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1564.jpg)
A782.- 1. storage costs- 2. insurance costs- 3. opportunity costs of inventory investment- 4. lost inventory due to obsolescence or spoilage
![Page 1565: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1565.jpg)
Q783.- What is the formula for the Re-order point?
![Page 1566: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1566.jpg)
A783.- safety stock + [lead time × #units sold per day / week]
![Page 1567: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1567.jpg)
Q784.- What is the formula for inventory turnover?- For average days sales in inventory?
![Page 1568: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1568.jpg)
A784.- COGS / Average inventory balance- 365 / inventory turnover- OR EI / COGS×365
![Page 1569: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1569.jpg)
Q785.- The Economic Order Quantity model assumes what 5carrying costs?- (SOMII)
![Page 1570: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1570.jpg)
A785.- S- Storage- O- Obsolescence- M- Materials- I- Insurance- I- Interest
![Page 1571: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1571.jpg)
Q786.- What is the formula for the EOQ Equation?
![Page 1572: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1572.jpg)
A786.- E = square root of 2SO/C- E: Order size (EOQ)- S: Annual Sales (units)- O: cost per purchase order- C: carrying cost per unit
![Page 1573: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1573.jpg)
Q787.- What is the formula for Accounting Rate of Return (ARR)?
![Page 1574: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1574.jpg)
A787.- increase in expected average annual NI- divided by:- Net initial investment
![Page 1575: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1575.jpg)
Q788.- What are the three Risk Preferences?
![Page 1576: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1576.jpg)
A788.- 1. Risk-Indifferent- 2. Risk-Averse- 3. Risk-Seeking
![Page 1577: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1577.jpg)
Q789.- What is the definition of Risk-Indifferent?
![Page 1578: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1578.jpg)
A789.- An attitude toward risk where an increase in the level ofrisk would not result in an increase in management’srequired rate of return.
![Page 1579: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1579.jpg)
Q790.- What is the definition of Risk-Averse?
![Page 1580: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1580.jpg)
A790.- An attitude toward risk where an increase in the level ofrisk would result in an increase in management’s requiredrate of return.
![Page 1581: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1581.jpg)
Q791.- What is the definition of Risk-Seeking?
![Page 1582: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1582.jpg)
A791.- An attitude toward risk where an increase in the level ofrisk would result in a decrease in management’s requiredrate of return.
![Page 1583: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1583.jpg)
Q792.- What is diversifiable risk?
![Page 1584: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1584.jpg)
A792.- Unsystematic, firm-specific (strikes, lawsuits, regulatoryactions, loss of a key account)
![Page 1585: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1585.jpg)
Q793.- What is Nondiversifiable risk?
![Page 1586: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1586.jpg)
A793.- Systematic, (war, inflation, int'l incidents, political events)
![Page 1587: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1587.jpg)
Q794.- Which risk preference?- Certainty equivalent < expected value
![Page 1588: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1588.jpg)
A794.- Risk averse
![Page 1589: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1589.jpg)
Q795.- Which risk preference?- Certainty equivalent = expected value
![Page 1590: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1590.jpg)
A795.- Risk indifferent
![Page 1591: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1591.jpg)
Q796.- Which risk preference?- certainty equivalent > expected value
![Page 1592: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1592.jpg)
A796.- Risk seeking
![Page 1593: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1593.jpg)
Q797.- Interest Rate Risk
![Page 1594: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1594.jpg)
A797.- fluctuations in the value of the instrument in response tochanges in interest rates
![Page 1595: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1595.jpg)
Q798.- Market Risk?
![Page 1596: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1596.jpg)
A798.- the exposure of a security or firm to fluctuations in valueas a result of operating w/in an economy.
![Page 1597: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1597.jpg)
Q799.- Credit Risk?
![Page 1598: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1598.jpg)
A799.- exposure to credit risk includes a company's inability tosecure financing or secure unfavorable credit terms as aresult of poor credit ratings
![Page 1599: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1599.jpg)
Q800.- Default Risk?
![Page 1600: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1600.jpg)
A800.- it is possible that its debtors may not repay the principleor interest due on their indebtedness.
![Page 1601: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1601.jpg)
Q801.- What is the stated interest rate?
![Page 1602: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1602.jpg)
A801.- The rate shown in the agreement of indebtedness.
![Page 1603: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1603.jpg)
Q802.- What is the effective interest rate?
![Page 1604: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1604.jpg)
A802.- The actual finance charge associated with a borrowingafter reducing loan proceeds for charges and fees relatedto a loan origination.
![Page 1605: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1605.jpg)
Q803.- How do you compute the effective interest rate?
![Page 1606: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1606.jpg)
A803.- Interest Paid Divided by net proceeds= effective interest rate
![Page 1607: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1607.jpg)
Q804.- How do you compute APR?
![Page 1608: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1608.jpg)
A804.- Effective interest rate X periods in a year=APR
![Page 1609: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1609.jpg)
Q805.- What is the formula for Effective APR?
![Page 1610: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1610.jpg)
A805.- I = stated interest rate- p = compounding periods per year- (1+(i/p))^p - 1
![Page 1611: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1611.jpg)
Q806.- What is operating leverage?
![Page 1612: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1612.jpg)
A806.- The degree to which a firm uses fixed operating costs.
![Page 1613: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1613.jpg)
Q807.- What is the formula for a firm's degree of operatingleverage (DOL)?
![Page 1614: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1614.jpg)
A807.- % change in EBIT/%change in sales
![Page 1615: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1615.jpg)
Q808.- The higher the operating leverage...
![Page 1616: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1616.jpg)
A808.- implies that a relatively small change in sales (increase ordecrease) will have a greater effect on profits andshareholder value.- the greater its profitability (and risk!)
![Page 1617: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1617.jpg)
Q809.- What is financial leverage?
![Page 1618: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1618.jpg)
A809.- The degree to which a firm uses fixed financial costs.
![Page 1619: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1619.jpg)
Q810.- What is the formula for a firm's degree of financialleverage (DFL)?
![Page 1620: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1620.jpg)
A810.- %change in EPS/%change in EBIT
![Page 1621: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1621.jpg)
Q811.- The higher the financial leverage...
![Page 1622: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1622.jpg)
A811.- implies that a relatively small change in EBIT (increase ordecrease) will have greater effects on profits andshareholder value.- the greater its profitability (and risk!)
![Page 1623: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1623.jpg)
Q812.- What is the formula for combined leverage (DCL)?
![Page 1624: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1624.jpg)
A812.- %change in EPS/%change in salesOR- DOL × DFL
![Page 1625: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1625.jpg)
Q813.- What is the theoretical optimal capital structure?
![Page 1626: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1626.jpg)
A813.- A mix of financing instruments that produces the lowestWACC.
![Page 1627: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1627.jpg)
Q814.- How do you compute the weighted average interest rate?
![Page 1628: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1628.jpg)
A814.- Effective annual interest payments/debt cash available
![Page 1629: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1629.jpg)
Q815.- How do you compute WACC?
![Page 1630: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1630.jpg)
A815.- (cost of equity × %equity in capital structure) + (WA costof debt × %debt in capital structure)
![Page 1631: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1631.jpg)
Q816.- What is the relevant cost of long-term debt?
![Page 1632: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1632.jpg)
A816.- kdx: the after tax cost of raising long-term funds thruborrowing.
![Page 1633: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1633.jpg)
Q817.- What are the Net Proceeds?
![Page 1634: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1634.jpg)
A817.- Nd: funds actually received by the firm from the sale ofbonds (gross-flotation costs)
![Page 1635: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1635.jpg)
Q818.- What is the Pre-tax cost of debt?
![Page 1636: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1636.jpg)
A818.- kdt: the cost of debt before considering the tax shieldingeffects of the debt= market rate= yield to maturity
![Page 1637: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1637.jpg)
Q819.- What is the formula for the Pre-tax cost of debt (kdt)?
![Page 1638: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1638.jpg)
A819.- PV = par value- I = annual interest pymts $$$- Nd = net proceeds- n = number of years to maturity- I + (PV - Nd) / n divided by (Nd + PV) / 2
![Page 1639: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1639.jpg)
Q820.- What is the formula for the after-tax cost of debt (kdx)?
![Page 1640: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1640.jpg)
A820.- KDT×(1 - tax rate)
![Page 1641: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1641.jpg)
Q821.- What is the abbreviation of cost of preferred stock?
![Page 1642: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1642.jpg)
A821.- kps
![Page 1643: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1643.jpg)
Q822.- Abbreviation of Net proceeds of preferred stock?
![Page 1644: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1644.jpg)
A822.- Nps
![Page 1645: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1645.jpg)
Q823.- Abbreviation of Preferred stock cash dividends?
![Page 1646: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1646.jpg)
A823.- Dps
![Page 1647: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1647.jpg)
Q824.- What is the formula for the cost of preferred stock (kps)?
![Page 1648: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1648.jpg)
A824.- Dps / Nps
![Page 1649: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1649.jpg)
Q825.- What is the abbreviation for cost of retained earnings?
![Page 1650: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1650.jpg)
A825.- kre
![Page 1651: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1651.jpg)
Q826.- What are the three common methods of computing kre?
![Page 1652: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1652.jpg)
A826.- 1. Capital Asset Pricing Model (CAPM)- 2. Discounted Cash Flow (DCF)- 3. Bond Yield plus Risk Premium (BYRP)
![Page 1653: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1653.jpg)
Q827.- What are the four key assumptions of the CAPM?
![Page 1654: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1654.jpg)
A827.- 1. cost of RE = risk free rate plus a risk premium- 2. risk premium = risks associated with the entire marketrisk- 3. risk premium is the product of systematic/non-diversifiable risk- 4. arbitrage pricing theory assumes multiple risks s/bconsidered as part of capital asset pricing, not simply onerisk.
![Page 1655: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1655.jpg)
Q828.- What is the risk-free rate?
![Page 1656: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1656.jpg)
A828.- krf: US T-bills
![Page 1657: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1657.jpg)
Q829.- What is the formula for the cost of RE using the CAPM?
![Page 1658: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1658.jpg)
A829.- kre = krf + [bi x (km - krf)]- km = market rate
![Page 1659: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1659.jpg)
Q830.- What is the formula for the cost of RE using theDiscounted Cash Flow (DCF)?
![Page 1660: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1660.jpg)
A830.- kre = (D1/P0) + g- D1:dividend/share @ end of 1 year- P0:current price of outstanding CS- g: constant rate of growth in dividends
![Page 1661: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1661.jpg)
Q831.- What is the formula for the cost of RE using the Bond-Yield-Plus-Risk-Premium (BYRP)?
![Page 1662: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1662.jpg)
A831.- kre = kdt + PMR- kdt: pre-tax cost of LT debt- PMR: mkt risk premium
![Page 1663: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1663.jpg)
Q832.- What are the three advantages of short-term financing?
![Page 1664: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1664.jpg)
A832.- 1. increased liquidity- 2. increased profitability- 3. decreased financing cost
![Page 1665: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1665.jpg)
Q833.- What are the two disadvantages of short-term financing?
![Page 1666: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1666.jpg)
A833.- 1. increased interest rate risk- 2. increased credit risk
![Page 1667: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1667.jpg)
Q834.- What are the two advantages of long-term financing?
![Page 1668: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1668.jpg)
A834.- 1. decreased interest rate risk- 2. decreased credit risk
![Page 1669: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1669.jpg)
Q835.- What are the three disadvantages of long-term financing?
![Page 1670: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1670.jpg)
A835.- 1. decreased profitability- 2. decreased liquidity- 3. increased financing costs
![Page 1671: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1671.jpg)
Q836.- Define: working capital financing.
![Page 1672: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1672.jpg)
A836.- contemplates the spontaneous financing of currentassets with trade accounts payable and accrued liabilitieswith the expectation that the maturities of current assetswill coincide with the maturities of current liabilities oftentermed maturity matching.
![Page 1673: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1673.jpg)
Q837.- Define: letter of credit.
![Page 1674: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1674.jpg)
A837.- represents a 3rd party guarantee, generally by a bank, ofobligations incurred by a company.
![Page 1675: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1675.jpg)
Q838.- Define: Line of credit.
![Page 1676: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1676.jpg)
A838.- represents a revolving line of credit with a bank that isgenerally renewable annually.
![Page 1677: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1677.jpg)
Q839.- Define: debenture.
![Page 1678: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1678.jpg)
A839.- an unsecured obligation of the issuing company.
![Page 1679: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1679.jpg)
Q840.- Define: subordinated debenture.
![Page 1680: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1680.jpg)
A840.- a bond issue that is unsecured and that ranks behindsenior creditors.
![Page 1681: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1681.jpg)
Q841.- Define: income bonds.
![Page 1682: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1682.jpg)
A841.- securities that pay interest only upon achievement oftarget income levels.
![Page 1683: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1683.jpg)
Q842.- Define: junk bonds.
![Page 1684: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1684.jpg)
A842.- often unsecured - both high risk and high return.
![Page 1685: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1685.jpg)
Q843.- Define: mortgage bonds.
![Page 1686: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1686.jpg)
A843.- protected from default by a lien on assets of the issuingcompany.
![Page 1687: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1687.jpg)
Q844.- What is one formula for ROI?
![Page 1688: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1688.jpg)
A844.- Income/Investment Capital- (average assets)- (average PPE + average WC)
![Page 1689: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1689.jpg)
Q845.- What is a second formula for ROI?
![Page 1690: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1690.jpg)
A845.- Profit Margin X Investment turnover
![Page 1691: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1691.jpg)
Q846.- What are two limitations of the ROI?
![Page 1692: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1692.jpg)
A846.- 1. short-term focus- 2. disincentive to invest
![Page 1693: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1693.jpg)
Q847.- Define: residual income method.
![Page 1694: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1694.jpg)
A847.- Measures the excess of actual income earned by aninvestment over the required (target or hurdle) return raterequired by the company.
![Page 1695: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1695.jpg)
Q848.- What is the formula for the required return?
![Page 1696: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1696.jpg)
A848.- NBV (Equity) X Hurdle rate (CAPM)= required return
![Page 1697: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1697.jpg)
Q849.- What is the formula for residual income?
![Page 1698: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1698.jpg)
A849.- NI - Required Return = residual income
![Page 1699: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1699.jpg)
Q850.- What are the two benefits of the Residual Incomeperformance measures?
![Page 1700: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1700.jpg)
A850.- 1. Realistic target rates- 2. focus on target return and amount
![Page 1701: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1701.jpg)
Q851.- What are the two weaknesses of Residual Incomeperformance measures?
![Page 1702: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1702.jpg)
A851.- 1. Reduced comparability- 2. target rates require judgment
![Page 1703: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1703.jpg)
Q852.- What is the formula for the debt-to-total-capital ratio?
![Page 1704: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1704.jpg)
A852.- Total Debt / Total Capital- (total capital = debt + equity)
![Page 1705: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1705.jpg)
Q853.- What is the formula for the Debt to asset ratio?
![Page 1706: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1706.jpg)
A853.- Total debt / total assets
![Page 1707: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1707.jpg)
Q854.- What is the formula for the debt-to-equity ratio?
![Page 1708: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1708.jpg)
A854.- Total debt / total shareholders' equity
![Page 1709: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1709.jpg)
Q855.- What is E-Commerce?
![Page 1710: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1710.jpg)
A855.- The electronic consummation of exchange (buying andselling) transactions.
![Page 1711: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1711.jpg)
Q856.- What is E-Business?
![Page 1712: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1712.jpg)
A856.- A more general term than e-commerce and refers to anyuse of information technology particularly networking andcommunications technology to perform businessprocesses in electronic form.
![Page 1713: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1713.jpg)
Q857.- What is EDI?
![Page 1714: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1714.jpg)
A857.- Electronic Data Interchange: computer to computerexchange of business transaction documents in structuredformats that allow the direct processing of the data by thereceiving system.
![Page 1715: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1715.jpg)
Q858.- What are the costs of EDI?
![Page 1716: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1716.jpg)
A858.- 1. Legal costs- 2. Hardware costs- 3. Costs of translation software- 4. Costs of data transmission- 5. Process reengineering and employee training costs foraffected applications- 6. Costs associated with security, monitoring, and controlprocedures.
![Page 1717: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1717.jpg)
Q859.- Audit trails in EDI systems should include:
![Page 1718: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1718.jpg)
A859.- 1. activity logs of failed transactions- 2. network and sender/recipient acknowledgments
![Page 1719: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1719.jpg)
Q860.- Compare: Cost of EDI vs. E-Commerce
![Page 1720: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1720.jpg)
A860.- EDI - more expensive- E-Commerce - less expensive
![Page 1721: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1721.jpg)
Q861.- Compare: security of EDI vs. E-Commerce
![Page 1722: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1722.jpg)
A861.- EDI - more secure- E-commerce -less secure
![Page 1723: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1723.jpg)
Q862.- Compare: speed of EDI vs. E-Commerce
![Page 1724: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1724.jpg)
A862.- EDI - slower (batch)- E-commerce - Faster (OLRT)
![Page 1725: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1725.jpg)
Q863.- Compare: network of EDI vs. E-commerce
![Page 1726: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1726.jpg)
A863.- EDI - VAN (private)- E-commerce - Internet (public)
![Page 1727: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1727.jpg)
Q864.- What is the importance of B2B?
![Page 1728: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1728.jpg)
A864.- 1. speed- 2. timing- 3. personalization- 4. security- 5. reliability
![Page 1729: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1729.jpg)
Q865.- What are Enterprise Resource Planning Systems? (ERP)
![Page 1730: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1730.jpg)
A865.- A cross-functional enterprise system that integrates andautomates the many business processes that must worktogether in the manufacturing, logistics, distribution,accounting, finance, and HR functions of the business.- Comprised of a number of modules (Peoplesoft)
![Page 1731: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1731.jpg)
Q866.- What four characteristics is Supply Chain Managementconcerned with?
![Page 1732: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1732.jpg)
A866.- 1. what- 2. when- 3. where- 4. how much
![Page 1733: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1733.jpg)
Q867.- What is a Customer Relationship Management System(CRM)?
![Page 1734: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1734.jpg)
A867.- Provide sales force automation and customer services inan attempt to manage customer relationships.
![Page 1735: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1735.jpg)
Q868.- What are the objectives of CRM?
![Page 1736: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1736.jpg)
A868.- 1. increase customer satisfaction- 2. increase revenue/profitability
![Page 1737: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1737.jpg)
Q869.- What is an Electronic Funds Transfer (EFT)?
![Page 1738: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1738.jpg)
A869.- A form of electronic payment for banking and retailingindustries.
![Page 1739: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1739.jpg)
Q870.- What are Application Service Providers (ASP)?
![Page 1740: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1740.jpg)
A870.- Provide access to application programs on a rental basis.
![Page 1741: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1741.jpg)
Q871.- What are the advantages of ASP?
![Page 1742: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1742.jpg)
A871.- 1. lower costs (hw, sw, people)- 2. greater flexibility
![Page 1743: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1743.jpg)
Q872.- What are the disadvantages of ASP?
![Page 1744: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1744.jpg)
A872.- 1. Possible risks to security and privacy- 2. Possible poor support by the ASP
![Page 1745: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1745.jpg)
Q873.- What are the five components of InformationTechnology?
![Page 1746: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1746.jpg)
A873.- 1. Hardware- 2. Software- 3. Data- 4. Network- 5. People
![Page 1747: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1747.jpg)
Q874.- What is a Business Information System?
![Page 1748: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1748.jpg)
A874.- A computer system that can accurately record andsummarize business transactions.
![Page 1749: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1749.jpg)
Q875.- What are the five categories of Business InformationSystems?
![Page 1750: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1750.jpg)
A875.- 1. Transaction processing systems- 2. Knowledge systems- 3. Management Information Systems- 4. Decision Support Systems- 5. Executive Information Systems
![Page 1751: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1751.jpg)
Q876.- What are the three primary roles of Business InformationSystems?
![Page 1752: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1752.jpg)
A876.- 1. Process detailed data- 2. Assist in making daily decisions- 3. Assist in developing business strategies
![Page 1753: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1753.jpg)
Q877.- Define hardware.
![Page 1754: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1754.jpg)
A877.- The actual physical computer or computer peripheraldevice.
![Page 1755: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1755.jpg)
Q878.- Define software.
![Page 1756: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1756.jpg)
A878.- The systems and programs that process data and turnthat data into information.
![Page 1757: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1757.jpg)
Q879.- Define network.
![Page 1758: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1758.jpg)
A879.- Made up of the communication media that allows multiplecomputers to share data and information simultaneously.
![Page 1759: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1759.jpg)
Q880.- Define people.
![Page 1760: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1760.jpg)
A880.- The various job titles and job descriptions associatedwith BIS.
![Page 1761: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1761.jpg)
Q881.- Define data.
![Page 1762: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1762.jpg)
A881.- Data is raw facts.
![Page 1763: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1763.jpg)
Q882.- Define production data.
![Page 1764: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1764.jpg)
A882.- Production data is live/real data.
![Page 1765: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1765.jpg)
Q883.- Define test data.
![Page 1766: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1766.jpg)
A883.- Staging/fake data for testing purposes.
![Page 1767: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1767.jpg)
Q884.- Define information.
![Page 1768: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1768.jpg)
A884.- Information is organized and processed data that ismeaningful to somebody.
![Page 1769: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1769.jpg)
Q885.- What are the five functions performed on data?
![Page 1770: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1770.jpg)
A885.- 1. collect- 2. process- 3. store- 4. transform- 5. distribute
![Page 1771: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1771.jpg)
Q886.- What is an Accounting Information System (AIS)?
![Page 1772: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1772.jpg)
A886.- A type of MIS - also partly a TPS and partly a KS.
![Page 1773: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1773.jpg)
Q887.- What are the objectives of an AIS?
![Page 1774: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1774.jpg)
A887.- 1. record valid transactions- 2. properly classify those transactions- 3. record transactions at proper values- 4. record transactions in proper accounting period- 5. properly present transactions and related info in thefinancial statements.
![Page 1775: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1775.jpg)
Q888.- What are Transaction Processing System (TPS)?
![Page 1776: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1776.jpg)
A888.- The systems that process and record the routine dailytransactions necessary to conduct the business.
![Page 1777: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1777.jpg)
Q889.- What are Decision Support Systems (DSS)?
![Page 1778: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1778.jpg)
A889.- A computer based information system that providesinteractive support for managers during the decisionmaking process. Sometimes called expert systems.
![Page 1779: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1779.jpg)
Q890.- What are Management Information Systems (MIS)?
![Page 1780: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1780.jpg)
A890.- Provides managerial and other end users withreports/information.
![Page 1781: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1781.jpg)
Q891.- What are Executive Information Systems (EIS)?
![Page 1782: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1782.jpg)
A891.- Provide senior executives with immediate and easyaccess to internal and external information to assist theexecutives in monitoring business conditions in general.- Assist in strategic (long-term), not daily, decision making.
![Page 1783: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1783.jpg)
Q892.- What are the five types of reports?
![Page 1784: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1784.jpg)
A892.- 1. Periodic Scheduled Reports- 2. Exception Reports- 3. Demand Reports (pull reports)- 4. Ad Hoc Reports- 5. Push Reports
![Page 1785: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1785.jpg)
Q893.- What are Periodic Scheduled Reports?
![Page 1786: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1786.jpg)
A893.- Traditional reports that display information in apredefined format and are made available on a regularbasis to end users of the system.
![Page 1787: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1787.jpg)
Q894.- What are Exception Reports?
![Page 1788: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1788.jpg)
A894.- Produced when a specific condition or exceptions occurs- "Red Flag Reports"
![Page 1789: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1789.jpg)
Q895.- What are Demand Reports?
![Page 1790: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1790.jpg)
A895.- Information from MIS available on demand - "PullReports"
![Page 1791: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1791.jpg)
Q896.- What are Ad Hoc Reports?
![Page 1792: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1792.jpg)
A896.- A report that does not currently exist but that can becreated on demand, without having to get a SW developeror programmer involved.
![Page 1793: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1793.jpg)
Q897.- What is a Query?
![Page 1794: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1794.jpg)
A897.- A specific question made up of various criteria that theend user can pose to the MIS and extract all transactionsor other info that meet those criteria.
![Page 1795: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1795.jpg)
Q898.- What are Push Reports?
![Page 1796: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1796.jpg)
A898.- Sent to a computer screen or desktop.
![Page 1797: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1797.jpg)
Q899.- What is the central processing unit (CPU)?
![Page 1798: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1798.jpg)
A899.- The control center of the computer system.
![Page 1799: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1799.jpg)
Q900.- What are the two principle components of a CPU?
![Page 1800: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1800.jpg)
A900.- 1. The Processor/chip- 2. Primary Storage
![Page 1801: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1801.jpg)
Q901.- What is the processor?
![Page 1802: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1802.jpg)
A901.- Interprets program instructions and coordinates input,output, and storage devices and performs arithmeticcalculations.
![Page 1803: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1803.jpg)
Q902.- What is primary storage?
![Page 1804: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1804.jpg)
A902.- Used to store program instructions and data until theprogram instructions can be executed.
![Page 1805: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1805.jpg)
Q903.- What are the two components of primary storage?
![Page 1806: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1806.jpg)
A903.- 1. random access memory (RAM)- 2. read-only memory (ROM)
![Page 1807: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1807.jpg)
Q904.- What is random access memory?
![Page 1808: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1808.jpg)
A904.- stores data temporarily while it is being processed.
![Page 1809: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1809.jpg)
Q905.- What is read-only memory?
![Page 1810: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1810.jpg)
A905.- Permanently store data needed to power the computer
![Page 1811: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1811.jpg)
Q906.- What are secondary storage devices? Examples?
![Page 1812: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1812.jpg)
A906.- A means to permanently store programs and data.- Ex: hard drives, CD-ROM, magnetic tapes.
![Page 1813: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1813.jpg)
Q907.- What are peripherals?
![Page 1814: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1814.jpg)
A907.- Devices that transfer data to or from the CPU but that donot take part in the actual processing of the data.
![Page 1815: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1815.jpg)
Q908.- What are the two components of peripherals?
![Page 1816: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1816.jpg)
A908.- 1. input devices- 2. output devices
![Page 1817: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1817.jpg)
Q909.- What are input devices? Examples?
![Page 1818: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1818.jpg)
A909.- Supply data to be processed.- Ex: keyboards, mice, scanners, microphones.
![Page 1819: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1819.jpg)
Q910.- What are output devices? Examples?
![Page 1820: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1820.jpg)
A910.- Transfer data from the processing unit to various outputmedia.- Ex: printers, speakers, monitors.
![Page 1821: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1821.jpg)
Q911.- What is system software?
![Page 1822: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1822.jpg)
A911.- Programs that run the computer and support systemmanagement operations.
![Page 1823: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1823.jpg)
Q912.- What is an Operating System?
![Page 1824: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1824.jpg)
A912.- Provides the interface between the user and thehardware.- It defines what commands can be issued and how theyare issued.
![Page 1825: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1825.jpg)
Q913.- What is a Database Management System (DBMS)?
![Page 1826: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1826.jpg)
A913.- A separate computer program that allows an organizationto create new database and use and work with the data inthe databases after the databases have been created.- It also allows for maintenance.
![Page 1827: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1827.jpg)
Q914.- What is a bit?
![Page 1828: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1828.jpg)
A914.- A binary digit (0 or 1) with which all computer data isstored.
![Page 1829: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1829.jpg)
Q915.- What is a byte?
![Page 1830: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1830.jpg)
A915.- A byte is a group of normally 8 bits that can represent aletter or number.- Also called a character.
![Page 1831: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1831.jpg)
Q916.- What is a Field?
![Page 1832: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1832.jpg)
A916.- A group of bytes in which a specific data element such asan employee number or name is stored - vertical column.
![Page 1833: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1833.jpg)
Q917.- What is a record?
![Page 1834: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1834.jpg)
A917.- A group of fields that represents the data that is beingstored for a particular entity such as customer or anaccount receivable - horizontal row.
![Page 1835: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1835.jpg)
Q918.- What is a file?
![Page 1836: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1836.jpg)
A918.- A collection of related records often arranged in somekind of sequence, such as a customer file made up ofcustomer records and organized by customer number.
![Page 1837: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1837.jpg)
Q919.- What is a database?
![Page 1838: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1838.jpg)
A919.- An integrated collection of data records and data files.- It is comprised of nothing more than stored data.
![Page 1839: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1839.jpg)
Q920.- What is database development?
![Page 1840: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1840.jpg)
A920.- Procedure where a DBA uses the DBMS to create a new,empty database.
![Page 1841: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1841.jpg)
Q921.- What is a database query?
![Page 1842: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1842.jpg)
A921.- The process where end users can retrieve specific data orinfo from the database by running a query.
![Page 1843: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1843.jpg)
Q922.- What are the two components of database maintenance?
![Page 1844: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1844.jpg)
A922.- 1. Effectiveness-function properly- 2. Efficiency-working fast enough
![Page 1845: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1845.jpg)
Q923.- What are the five types of databases?
![Page 1846: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1846.jpg)
A923.- 1. operational databases- 2. analytical databases- 3. data warehouses- 4. distributed databases- 5. end-user databases
![Page 1847: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1847.jpg)
Q924.- What is a data warehouse?
![Page 1848: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1848.jpg)
A924.- Stores data from current and previous years often fromboth operational and management databases - data mart.
![Page 1849: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1849.jpg)
Q925.- What are the advantages of a DBMS?
![Page 1850: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1850.jpg)
A925.- 1. reduction of data redundancy and inconsistency- 2. potential for data sharing- 3. data independence- 4. data standardization- 5. improved data security- 6. expanded data fields- 7. enhanced information timeliness, effectiveness, andavailability
![Page 1851: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1851.jpg)
Q926.- What are the disadvantages of a DBMS?
![Page 1852: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1852.jpg)
A926.- 1. cost- 2. highly trained personnel are necessary.- 3. increased chances of breakdowns.- 4. possible obscuring of the audit trail- 5. specialized backup and recovery procedures required.
![Page 1853: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1853.jpg)
Q927.- What are the two types of networks?
![Page 1854: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1854.jpg)
A927.- 1. Local Area Network (LAN)- 2. Wide Area Network (WAN)
![Page 1855: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1855.jpg)
Q928.- What is a local area network?
![Page 1856: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1856.jpg)
A928.- Permit shared resources (software, hardware, data)among computers within a limited area.
![Page 1857: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1857.jpg)
Q929.- What is a node?
![Page 1858: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1858.jpg)
A929.- Any device connected to a network.
![Page 1859: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1859.jpg)
Q930.- What is a workstation?
![Page 1860: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1860.jpg)
A930.- A node (usually a PC) that is used by end users.
![Page 1861: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1861.jpg)
Q931.- What is a server?
![Page 1862: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1862.jpg)
A931.- A node dedicated to providing services or resources tothe rest of the network.
![Page 1863: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1863.jpg)
Q932.- What is a Network Interface Card (NIC)?
![Page 1864: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1864.jpg)
A932.- A circuit board installed on a node that allows the node toconnect with and communicate over the network - Ethernetcard.
![Page 1865: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1865.jpg)
Q933.- What is transmission media?
![Page 1866: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1866.jpg)
A933.- The physical path between nodes on a network.
![Page 1867: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1867.jpg)
Q934.- What is a network operating system (NOS)?
![Page 1868: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1868.jpg)
A934.- Manages communication over a network.
![Page 1869: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1869.jpg)
Q935.- What is a communications device/modem?
![Page 1870: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1870.jpg)
A935.- Provides remote access and provides a network with theability to communicate with others.
![Page 1871: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1871.jpg)
Q936.- What are the four network topologies?
![Page 1872: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1872.jpg)
A936.- 1. Bus Networks- 2. Ring Networks- 3. Start Networks- 4. Tree Networks
![Page 1873: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1873.jpg)
Q937.- What is a Bus network?
![Page 1874: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1874.jpg)
A937.- Use a common backbone to connect all of the devices onthe network.
![Page 1875: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1875.jpg)
Q938.- What is a Ring network?
![Page 1876: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1876.jpg)
A938.- Formed in a ring with each device connected to two otherdevices.
![Page 1877: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1877.jpg)
Q939.- What is a Star network?
![Page 1878: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1878.jpg)
A939.- Formed in a star with each device connected to a central"hub"
![Page 1879: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1879.jpg)
Q940.- What is a Tree network?
![Page 1880: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1880.jpg)
A940.- Connect multiple stars into a Bus.
![Page 1881: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1881.jpg)
Q941.- What is a Wide Area Network?
![Page 1882: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1882.jpg)
A941.- Allow national and international communications.
![Page 1883: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1883.jpg)
Q942.- What are two types of WANs?
![Page 1884: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1884.jpg)
A942.- 1. Value added networks (VAN)- 2. Internet based networks
![Page 1885: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1885.jpg)
Q943.- What are Value Added Networks?
![Page 1886: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1886.jpg)
A943.- Privately owned and managed communications networksthat provide additional services beyond standard datatransmission.
![Page 1887: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1887.jpg)
Q944.- What are four characteristics of VANs?
![Page 1888: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1888.jpg)
A944.- 1. private- 2. more secure- 3. expensive- 4. slow
![Page 1889: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1889.jpg)
Q945.- What are internet based networks?
![Page 1890: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1890.jpg)
A945.- Use Internet protocols and public communicationschannels to establish network communications.
![Page 1891: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1891.jpg)
Q946.- What are four characteristics of internet based networks?
![Page 1892: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1892.jpg)
A946.- 1. public- 2. less secure- 3. inexpensive- 4. fast, online real time OLRT
![Page 1893: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1893.jpg)
Q947.- What is an Intranet?
![Page 1894: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1894.jpg)
A947.- Connects geographically separate LANS within acompany (company's private web site just for employees)
![Page 1895: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1895.jpg)
Q948.- What is Extranet?
![Page 1896: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1896.jpg)
A948.- Permit others to have direct access to the company'snetwork - port/doorway thru firewall to company's intranet.
![Page 1897: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1897.jpg)
Q949.- What are transaction files?
![Page 1898: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1898.jpg)
A949.- In a computerized environment, journals are calledtransaction files.
![Page 1899: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1899.jpg)
Q950.- What are transaction files used for?
![Page 1900: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1900.jpg)
A950.- To update master files.
![Page 1901: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1901.jpg)
Q951.- What are master files?
![Page 1902: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1902.jpg)
A951.- In a computerized environment, ledgers are called masterfiles.
![Page 1903: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1903.jpg)
Q952.- What is a master file update?
![Page 1904: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1904.jpg)
A952.- In a manual system, transactions are posted from thejournal to the ledger. In a computerized system,transactions are used to update balances in the masterfiles.
![Page 1905: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1905.jpg)
Q953.- What are the two types of processing?
![Page 1906: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1906.jpg)
A953.- 1. Batch- 2. Online Real Time (OLRT)
![Page 1907: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1907.jpg)
Q954.- What is batch processing?
![Page 1908: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1908.jpg)
A954.- Input documents / transactions are collected and groupedby type of transaction.- These groups / batches are processed periodically - mayuse either sequential storage devices or random accessstorage devices.
![Page 1909: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1909.jpg)
Q955.- What are the steps in batch processing?
![Page 1910: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1910.jpg)
A955.- 1. create a transaction file- 2. update the master file
![Page 1911: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1911.jpg)
Q956.- What is online real-time processing?
![Page 1912: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1912.jpg)
A956.- Transactions are entered and the master files updated asthe transactions are entered.- OLRT systems require random access storage devices.
![Page 1913: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1913.jpg)
Q957.- What is centralized processing?
![Page 1914: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1914.jpg)
A957.- Maintain all data and perform all data processing at acentral location.
![Page 1915: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1915.jpg)
Q958.- What is decentralized (distributed) processing?
![Page 1916: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1916.jpg)
A958.- Occurs when computing power, applications, and work isspread out or distributed over many locations.
![Page 1917: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1917.jpg)
Q959.- What are the two advantages of centralized processing?
![Page 1918: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1918.jpg)
A959.- 1. enhanced security- 2. consistent processing
![Page 1919: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1919.jpg)
Q960.- What are the five disadvantages of centralizedprocessing?
![Page 1920: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1920.jpg)
A960.- 1. possible high cost- 2. increased need for processing power and data storage- 3. reduction in local accountability- 4. bottlenecks/traffic jams- 5. larger delay in response time
![Page 1921: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1921.jpg)
Q961.- What are the four main risks with respect to systems?
![Page 1922: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1922.jpg)
A961.- 1. strategic risk- 2. operating risk- 3. financial risk- 4. information risk
![Page 1923: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1923.jpg)
Q962.- What is strategic risk?
![Page 1924: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1924.jpg)
A962.- The risk of choosing inappropriate technology.
![Page 1925: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1925.jpg)
Q963.- What is operating risk?
![Page 1926: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1926.jpg)
A963.- The risk of doing the right things in the wrong way?
![Page 1927: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1927.jpg)
Q964.- What is financial risk?
![Page 1928: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1928.jpg)
A964.- The risk of having financial resources lost, wasted, orstolen.
![Page 1929: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1929.jpg)
Q965.- What is information risk?
![Page 1930: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1930.jpg)
A965.- The risk of loss of data integrity, incomplete transactions,or hackers.
![Page 1931: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1931.jpg)
Q966.- Risks can be divided into what three categories?
![Page 1932: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1932.jpg)
A966.- 1. errors- 2. intentional acts- 3. disasters
![Page 1933: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1933.jpg)
Q967.- What are errors?
![Page 1934: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1934.jpg)
A967.- Mistakes, lost or misplaced data, application or systemsoftware problems or other temporary equipmentproblems, transmission errors, and computer equipmentlost or stolen.
![Page 1935: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1935.jpg)
Q968.- What are intentional acts?
![Page 1936: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1936.jpg)
A968.- Sabotage, embezzlements, viruses, denial of serviceattacks, and other types of computer fraud.
![Page 1937: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1937.jpg)
Q969.- What are disasters?
![Page 1938: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1938.jpg)
A969.- Fire- flood- earthquakes- high winds- terrorism- war.
![Page 1939: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1939.jpg)
Q970.- In general, what is risk?
![Page 1940: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1940.jpg)
A970.- The possibility of harm or loss.
![Page 1941: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1941.jpg)
Q971.- What is a threat?
![Page 1942: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1942.jpg)
A971.- Any eventuality that represents a danger to an asset or acapability linked to hostile intent.
![Page 1943: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1943.jpg)
Q972.- What are the four types of controls?
![Page 1944: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1944.jpg)
A972.- 1. general controls- 2. application controls- 3. physical controls- 4. segregation of duties
![Page 1945: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1945.jpg)
Q973.- What are file attributes?
![Page 1946: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1946.jpg)
A973.- Set to restrict writing, reading, and/or directory privilegesfor a file.
![Page 1947: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1947.jpg)
Q974.- What are firewalls?
![Page 1948: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1948.jpg)
A974.- A system, often both hardware and software, of user IDsand authentication that prevents unauthorized users fromgaining access to network resources; acting as agatekeeper, it isolates a private network from a publicnetwork.
![Page 1949: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1949.jpg)
Q975.- What are five threats in a computerized environment?
![Page 1950: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1950.jpg)
A975.- 1. virus- 2. worm- 3. Trojan horse- 4. denial-of-service attack- 5. phishing
![Page 1951: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1951.jpg)
Q976.- What is disaster recovery?
![Page 1952: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1952.jpg)
A976.- Plans for continuing operations in the event ofdestruction of not only program and data files but alsoprocessing capability.
![Page 1953: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1953.jpg)
Q977.- What are the five steps in disaster recovery?
![Page 1954: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1954.jpg)
A977.- 1. assess the risks- 2. identify mission-critical applications and data- 3. develop a plan for handling the mission-criticalapplications- 4. determine responsibilities of the personnel involved indisaster recovery- 5. test the disaster recovery plan
![Page 1955: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1955.jpg)
Q978.- What is a cold site?
![Page 1956: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1956.jpg)
A978.- An off-site location that has all the electrical connectionsand other physical requirements for data processing, but itdoes not have the actual equipment.
![Page 1957: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1957.jpg)
Q979.- What is a hot site?
![Page 1958: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1958.jpg)
A979.- An off-site location that is "completely" equipped to"immediately" take over the company's data processing.
![Page 1959: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1959.jpg)
Q980.- Define System Analyst.
![Page 1960: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1960.jpg)
A980.- Architect of the overall computer hardware specifications.
![Page 1961: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1961.jpg)
Q981.- What are the two types of Computer Programmers?
![Page 1962: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1962.jpg)
A981.- 1. Application programmer/software developer- 2. System programmer
![Page 1963: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1963.jpg)
Q982.- What is an application programmer?
![Page 1964: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1964.jpg)
A982.- Person responsible for writing/maintaining applicationprograms.
![Page 1965: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1965.jpg)
Q983.- What is a system programmer?
![Page 1966: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1966.jpg)
A983.- Person responsible for installing, supporting, monitoring,and maintaining the operating system.
![Page 1967: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1967.jpg)
Q984.- What are the three types of System Administrators?
![Page 1968: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1968.jpg)
A984.- 1. Database Administrator (DBA)- 2. Network Administrator- 3. Web Administrator
![Page 1969: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1969.jpg)
Q985.- What is a Database Administrator?
![Page 1970: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1970.jpg)
A985.- Person responsible for maintaining and supporting thedatabase software.
![Page 1971: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1971.jpg)
Q986.- What is a Network Administrator?
![Page 1972: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1972.jpg)
A986.- Person responsible for supporting computer networks.
![Page 1973: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1973.jpg)
Q987.- What is a Web Administrator?
![Page 1974: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1974.jpg)
A987.- Person responsible for information on a web site.
![Page 1975: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1975.jpg)
Q988.- What is a Hardware Technician?
![Page 1976: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1976.jpg)
A988.- Person who sets up and configures hardware andtroubleshoots any resulting hardware problems.
![Page 1977: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1977.jpg)
Q989.- What is an End User?
![Page 1978: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1978.jpg)
A989.- Any workers in an organization who enter data into asystem or who use the information processed by thesystem.
![Page 1979: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1979.jpg)
Q990.- What is segregation of duties?
![Page 1980: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1980.jpg)
A990.- Dividing responsibilities for different portions of atransaction (authorization, recording, and custody) amongseveral different people or departments. The objective is toprevent any one person from having total control over allaspects of the transaction.
![Page 1981: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1981.jpg)
Q991.- Should the duties of system analysts and computerprogrammers be segregated?
![Page 1982: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1982.jpg)
A991.- YES!
![Page 1983: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1983.jpg)
Q992.- What is a general partnership?
![Page 1984: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1984.jpg)
A992.- An association of two or more persons to carry on as co-owners a business for profit.
![Page 1985: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1985.jpg)
Q993.- What is a joint venture?
![Page 1986: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1986.jpg)
A993.- An association of two or more persons in a singlebusiness venture.
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Q994.- What is the difference between a general partnership anda joint venture?
![Page 1988: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1988.jpg)
A994.- A general partnership can mean an ongoing relationshipwhereas a joint venture is usually for a one-shot deal.
![Page 1989: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1989.jpg)
Q995.- What is a Limited Partnership (LP) ?
![Page 1990: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1990.jpg)
A995.- A partnership with at least one general partner and onelimited partner.
![Page 1991: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1991.jpg)
Q996.- What distinguishes a Limited Partnership from a GeneralPartnership?
![Page 1992: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1992.jpg)
A996.- In a limited partnership, limited partners will enjoyLimited Liability!
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Q997.- What is a Limited Liability Partnership (LLP) ?
![Page 1994: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1994.jpg)
A997.- A partnership that CARRIES MUCH GREATERPROTECTON from liability than exists in a general orlimited partnership.
![Page 1995: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/1995.jpg)
Q998.- What does Limited Liability mean?
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A998.- Only liable up to personal investment.
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Q999.- What does Liability mean?
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A999.- Legal responsibility
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Q1000.- What is General Partnership Law governed by?
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A1000.- Model acts that the states adopt
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Q1001.- What is the Uniform Partnership Act (UPA) and RevisedUniform Partnership Act (RUPA)?
![Page 2002: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2002.jpg)
A1001.- Model acts that govern partnership law.
![Page 2003: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2003.jpg)
Q1002.- Joint ventures are essentially identical to partnershipsand are governed by what?
![Page 2004: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2004.jpg)
A1002.- UPA or RUPA, depending on the jurisdiction
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Q1003.- What law governs Limited Partnership Law in mostjurisdictions?
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A1003.- The Revised Uniform "Limited" Partnership Act (RULPA)?
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Q1004.- What act was amended to provide limited liability forpartners?
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A1004.- RUPA
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Q1005.- RUPA Is functionally a form contract and provides what?
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A1005.- Default rules
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Q1006.- By agreement, partners may vary most RUPA provisionsbut not prejudice rights of third parties. T or F
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A1006.- True
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Q1007.- Is a written agreement required in a written partnership?
![Page 2014: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2014.jpg)
A1007.- No, unless the partnership will last more than a year
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Q1008.- Is an official filing required to form a GeneralPartnership?
![Page 2016: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2016.jpg)
A1008.- No
![Page 2017: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2017.jpg)
Q1009.- What are the characteristics of a General Partnership?
![Page 2018: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2018.jpg)
A1009.- 1. Unlimited Liability for Partners- 2. Pass-thru Taxation- 3. An association of two or more persons to carry on asco-owners a business for profit.
![Page 2019: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2019.jpg)
Q1010.- Under RUPA, what is the name of the voluntary statementthat can be filed in the Secretary of State's office?
![Page 2020: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2020.jpg)
A1010.- Statement of Partnership Authority
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Q1011.- How does pass-thru taxation work?
![Page 2022: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2022.jpg)
A1011.- 1. The partnership files an informational return but paysno taxes.- 2. Individual partners pay tax on allocated income,whether or not it is distributed.
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Q1012.- When defining the term ASSOCIATION in the definition ofa general partnership, what does Delectus Personaemean?
![Page 2024: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2024.jpg)
A1012.- Voluntariness.- 1) Partners choose with whom they'll become partners.- 2) Existing partners must consent to the addition of newpartners.
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Q1013.- When defining the term ASSOCIATION in the definition ofa general partnership, what does Intent mean?
![Page 2026: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2026.jpg)
A1013.- Not an intent to be "partners", but an intent to enter intothe type of business relationship that the law deems apartnership. CONTENT CTLS FORM.
![Page 2027: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2027.jpg)
Q1014.- When defining the term ASSOCIATION in the definition ofa general partnership, what does "two or more personshaving legal capacity mean?
![Page 2028: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2028.jpg)
A1014.- Minors can become partners
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Q1015.- What does the term Business for Profit exclude?
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A1015.- Charitable, religious, & fraternal groups
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Q1016.- What does Co-ownership mean?
![Page 2032: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2032.jpg)
A1016.- Community of Interest: Sharing capital, control,profits/losses
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Q1017.- The sharing of profits and losses is prima facie evidenceof a partnership, unless the profits were received inpayment of what?
![Page 2034: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2034.jpg)
A1017.- 1. Debt- 2. Wages of an employee- 3. Rent to a landlord- 4. Annuity to a widow or rep of a deceased person- 5. Interest on a loan- 6. Consideration for the sale of goodwill
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Q1018.- What are Purported Partners?
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A1018.- Purported Partners. Where persons who are not partnersare treated as such on the estoppel theory.
![Page 2037: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2037.jpg)
Q1019.- What is partnership by Estoppel?
![Page 2038: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2038.jpg)
A1019.- Not a true partnership, but is a method of fixing liabilityon one who has held themselves out as a partner or hasallowed others to them as partners.
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Q1020.- What actions deem a partnership by estoppel?
![Page 2040: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2040.jpg)
A1020.- 1. Words or conduct that represent a partnership- 2. Detrimental actions taken by the plaintiff in reliance onthe representation- 3. Representation was reasonably believed by plaintiff
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Q1021.- What is the Aggregate Theory versus Entity Theory?
![Page 2042: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2042.jpg)
A1021.- The Aggregate Theory is held by UPA where thepartnership is not a separate entity from the partners.- The Entity Theory held by RUPA recognizes thepartnership as a separate entity for most purposes.- Pass-thru taxation still exists in both cases.
![Page 2043: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2043.jpg)
Q1022.- What does having a separate entity mean in regards to aGeneral Partnership?
![Page 2044: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2044.jpg)
A1022.- That the partnership itself continues to exist, even thoughthe partners may come and go.
![Page 2045: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2045.jpg)
Q1023.- Regarding Contractual Liability to third parties, the ACTof a partner in the ordinary course of partnership businessBINDS the partnership with what exceptions?
![Page 2046: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2046.jpg)
A1023.- A partner's act in the ordinary course of business doesnot bind the partnership when:- 1)The partner had no authority to act for the pship in theparticular matterAND- 2) The person with whom the partner was dealing knew orhad received notification that the partner lacked authority
![Page 2047: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2047.jpg)
Q1024.- If a partner does not act in the ordinary course ofpartnership business, then that act can only bind thepartnership when what occurs?
![Page 2048: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2048.jpg)
A1024.- When the other partners authorize the act
![Page 2049: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2049.jpg)
Q1025.- A partner binds the partnership and the other partners ifthe partner acts with what types of Authority?
![Page 2050: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2050.jpg)
A1025.- Actual Authority- Apparent Authority
![Page 2051: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2051.jpg)
Q1026.- What is Actual Authority?
![Page 2052: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2052.jpg)
A1026.- Expressed or Implied
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Q1027.- What is Implied Authority?
![Page 2054: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2054.jpg)
A1027.- Customary- Incidental- Emergency
![Page 2055: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2055.jpg)
Q1028.- What is Apparent Authority?
![Page 2056: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2056.jpg)
A1028.- Authority that is Clearly seen or understood
![Page 2057: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2057.jpg)
Q1029.- In what instances can Apparent Authority NOT exist?
![Page 2058: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2058.jpg)
A1029.- 1) When the third party knows of a partner's lack ofauthority, or- 2) The partner's action requires unanimity (ieextraordinary contract)
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Q1030.- What does the "Scope" of Authority mean?
![Page 2060: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2060.jpg)
A1030.- The "range" of authority covered
![Page 2061: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2061.jpg)
Q1031.- The scope of Authority in a Partnership is determined bywhat?
![Page 2062: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2062.jpg)
A1031.- 1) Past practices of the partnership- 2) Practices of similar businesses in the area
![Page 2063: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2063.jpg)
Q1032.- Give examples of Implied and Apparent Authority.
![Page 2064: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2064.jpg)
A1032.- Hire/fire employees, open bank accts, buy supplies, sellinventory, rent office space
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Q1033.- After a falling out with Partners B and C, Partner A of theABC Furniture Co. is forbidden - by majority vote - to sellany - partnership property - without the consent of theother partners. If A sells to a customer a couch and thecompany's fleet of seven delivery trucks, which of the twosales if any are within the scope of apparent authority?
![Page 2066: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2066.jpg)
A1033.- The sale of the couch is probably within the scope ofapparent authority, but the sale of the trucks probably isnot.
![Page 2067: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2067.jpg)
Q1034.- If a partner does not have actual or apparent authority,can the partnership still be liable for the act of the partner?
![Page 2068: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2068.jpg)
A1034.- Yes, if the partnership ratifies or formally approves theaction.
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Q1035.- What is a tort?
![Page 2070: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2070.jpg)
A1035.- A wrongful act
![Page 2071: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2071.jpg)
Q1036.- Generally, are Partnerships liable for the Torts of theirpartners?
![Page 2072: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2072.jpg)
A1036.- Yes
![Page 2073: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2073.jpg)
Q1037.- What is the key question when determining if a Tort hasbeen committed?
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A1037.- Was the partner acting within the scope of partnershipbusiness?
![Page 2075: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2075.jpg)
Q1038.- What are the three types of torts?
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A1038.- Intentional- Unintentional (Negligence)- Strict Liability
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Q1039.- For Intentional Torts, when is the Partnership liable forthe Torts of their partners?
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A1039.- When the partner is attempting to advance partnershipinterests
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Q1040.- Here is an example of an Intentional Tort a Partnership isprobably liable for.
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A1040.- In attempting to acquire more prominent shelf space forthe partnership's products in a grocery store carryingthose products, partner A gets into a fist fight with anemployee of a competitor also seeking the shelf space.- The partnership is probably liable.
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Q1041.- For Negligence/unintentional cases, when is apartnership liable for the Torts of their partners?
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A1041.- When the partner is performing partnership business ifusing partnership owned means to do it.- If using personal means to do partnership business, then,the partnership is liable if the business is a regular part ofpartnership business.
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Q1042.- What does RUPA impose Strict Liability on a partnershipfor?
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A1042.- Misapplication of Funds received in the course of itsbusiness
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Q1043.- Under RUPA, contract and tort liability are typically jointand several. What does this mean?
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A1043.- That a creditor may sue any partner and hold that partnercompletely liable without suing the others.
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Q1044.- RUPA and most UPA states require in cases of contractand tort liabilities that Assets of the Partnership beexhausted before the partnership creditor can proceedagainst what?
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A1044.- Individual assets of Partners
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Q1045.- If a partner joins an Existing Partnership, the new partneris generally liable for all subsequent debt, but is liable forpreexisting debt how?
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A1045.- Only out of her Firm Contribution.- In other words, liable for preexisting debt only to theextent of the amount contributed when joined thepartnership.
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Q1046.- RUPA provides that "Property transferred to or otherwiseacquired by a partnership is property of the partnershipand not of the partners individually." True or False
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A1046.- True
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Q1047.- Consistent with earlier UPA rules, RUPA provides thatproperty is Partnership Property if acquired in the name ofwhom?
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A1047.- 1. the Partnership- 2. In the name of the Partner or Partners with at least oneof the following indications:- In the instrument that transferred title:- a. The person's Capacity as partner- b. The Existence of the Partnership
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Q1048.- Property is presumed to be partnership property whenwhat occurs?
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A1048.- If purchased with Partnership Assets
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Q1049.- When is property Separate from the partnership?
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A1049.- When property is acquired in the name of one or morepartners without indication of: Partnership Capacity, orExistence of the Partnership, or without the use ofPartnership Assets.
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Q1050.- Partnerships have Entity Ownership of partnershipproperty. What is Entity Ownership?
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A1050.- Partnership Property is owned by the Partnership Entity,not by the partners in common.
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Q1051.- A partner's Partnership Interest is considered what?
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A1051.- Personal Property
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Q1052.- What does Partnership Interest give the partner the Rightto?
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A1052.- 1. Share in the partnership's Profits- 2. Share in the partnership's Net Assets upon dissolution.
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Q1053.- The Creditor Restriction relating to Partnership Propertyis what?
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A1053.- No Creditor of an Individual Partner may attachpartnership property to satisfy an Individual Debt.
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Q1054.- What is the proper approach for creditors of IndividualPartners?
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A1054.- The Charging Order
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Q1055.- What is a Charging Order?
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A1055.- The judge orders the other partners to pay anyDistribution Due to the debtor partner to that Partner'sCreditor instead.
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Q1056.- What does Assignment mean relating to IndividualPartner debt?
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A1056.- Debtor partners may Assign (or creditors may seize)ONLY the Individual Partner's Interest in the Partnership(i.e. profits and net assets)
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Q1057.- What is the rule regarding using PARTNERSHIPPROPERTY to satisfy the debts of Individual Partners?
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A1057.- Individual Partners MAY NOT ASSIGN and creditors ofIndividual Partners MAY NOT SEIZE Partnership Propertyto satisfy the debts of individual partners.
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Q1058.- Can an Individual Partner assign his Partnership Interestto an Individual Creditor?
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A1058.- Yes
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Q1059.- If an individual partner does assign to an individualcreditor his or her partnership interest, does the creditorbecome a Partner?
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A1059.- NO
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Q1060.- What is Limited Partnership Law governed by?
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A1060.- ULPA - Uniform Limited Partnership Act- RULPA - Revised Uniform Limited Partnership Act
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Q1061.- If questions regarding Limited Partnership law cannot beanswered by ULPA or RULPA, how then is the questionanswered?
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A1061.- By the General Partnership Law
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Q1062.- Important CPA Exam Note:
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A1062.- Traditionally the AICPA has not asked too manyquestions about limited partnerships specifically.
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Q1063.- Define a Limited Partnership.
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A1063.- A partnership consisting of at least one general partner(GP) and at least one limited partner (LP).
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Q1064.- Give four characteristics of a Limited Partnership.
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A1064.- 1. Limited Liability for LPs.- 2. Partnership (Pass-Through) Taxation.- 3. Transferability of LP interests.- 4. Centralized management by GPs.
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Q1065.- Regarding Limited Partnerships, what is Forfeit ofControl?
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A1065.- Limited partners forfeit right to control their investmentand, in exchange, are accorded limited liability.
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Q1066.- Regarding Limited Partnerships, how can GeneralPartners become Limited Partners?
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A1066.- By Purchasing Limited Partnership Interests
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Q1067.- Regarding Limited Partnerships, what is the governinglaw in most states?
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A1067.- RULPA
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Q1068.- Regarding Limited Partnership Formation, what is theonly way a Limited Partnership can be formed?
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A1068.- By filing the appropriate documents at the secretary ofState's Office
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Q1069.- Regarding Limited Partnerships, of the appropriatedocuments filed with the Secretary of State's office, whatmust one of those documents be?
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A1069.- A written Limited Partnership Agreement
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Q1070.- The Limited Partnership name should indicate its statusby use of what?
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A1070.- "Limited Partnership" or "L.P.," or "Ltd.," etc.
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Q1071.- Regarding the Limited Partnerships, Creditors of a limitedpartnership who go unpaid will seek to do what?
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A1071.- Impose personal liability upon limited partners.
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Q1072.- Limited Partners can, in some circumstances, forfeit theirlimited liability. How does this happen?
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A1072.- 1. Defective Formation- 2. False Statements- 3. Exercising Control- 4. Use of Name
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Q1073.- If a limited partnership is Defectively Formed, an LP maybe held liable if what occurs?
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A1073.- If he knew or should have known that no certificate hadbeen filed- OR that one erroneously referred to him as a generalpartner.
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Q1074.- Liability for a LP for forming a Defective LimitedPartnership extends only to what?
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A1074.- (a) extends only to third parties who, reasonably believedbased on the LP's conduct that he was a GP, extendedcredit to the partnership- (b) may be terminated by the filing of an appropriatecertificate with the Secretary of State's office and thewithdrawing from participation in profits.
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Q1075.- Regarding False Statements, how does a LP forfeit limitedliability?
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A1075.- Whan an LP- (a) signs an LP certificate knowing that it contains falsestatements or omissions,- or (b) learns of such misrepresentations and fails toamend or cancel it.
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Q1076.- If an LP takes part in the CONTROL of the partnershipbusiness, he may forfeit limited liability, extending ony towhat?
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A1076.- Persons who transact business with the LP believing,based on the LP's conduct, that the LP is a GP.
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Q1077.- A limited partner does not take part in control by virtue ofthe following:
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A1077.- a. being a contractor for or an agent or employee of thelimited partnership,- b. consulting with and advising a general partner,- c. acting as surety for the limited partnership orguaranteeing its loans,- d. taking any action required or permitted by law to sueon behalf of the limited partnership,- e. requesting or attending a meeting of the partners,- f. winding up the partnership,- g. exercising any right permitted to limited partners, or- h. voting on any important partnership matter.
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Q1078.- If an LP knowingly PERMITS HIS NAME to be used in thename of the limited partnership, FORFEITS his limitedliaability only extending to what?
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A1078.- Persons who extend credit to the limited partnership andhave no knowledge that the LP is not a GP.
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Q1079.- What are three rights and responsibilities of LimitedPartners?
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A1079.- 1. LP powers should be set out in LP agreement.- 2. LPs often have veto power over certain "extraordinary"acts by GPs.- 3. LPs usually have power to replace GPs.
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Q1080.- What are the Information and Inspection Rights of aLimited Partnership?
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A1080.- 1. A limited partnership must maintain and permit theinspection by limited partners of all important partnershiprecords.- 2. Access to Courts- 3. LPs have the right to file derivative suits, just likecorporate shareholders.
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Q1081.- In a Limited Partnership, what is assignable and notassignable?
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A1081.- 1. A limited partner's INTEREST (share of profits andassets on dissolution) IS ASSIGNABLE.- 2. A limited partner's rights to inspect, to bringderivatives suits, etc. are not assignable NOTASSIGNABLE, unless they are assigned to a substitutelimited partner.
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Q1082.- In a Limited Partnership, what are the general partner'sright and responsibilities?
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A1082.- A. Unlimited personal liability, and- B. Greater fiduciary (trust) duty owed to limited partners.
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Q1083.- In a Limited Partnership, how should Profits and Lossesbe allocated?
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A1083.- In the manner provided in the written partnershipagreement.
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Q1084.- How should Partners who lend money to the LimitedPartnership be repaid?
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A1084.- They should share in distributions along with outsidecreditors.
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Q1085.- Regarding allocation of Profits and Losses in a LimitedPartnership, can the partnership agreement provide thatthe LPs and GPs be treated equally?
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A1085.- Yes
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Q1086.- What are the two Fiduciary duties that a partner owes theother partners?
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A1086.- Loyalty and Care
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Q1087.- What is the Duty of Loyalty?
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A1087.- No CCAD - Can Computers Ace Deers?- 1. No Competition;- 2. No Conflicts of Interest;- 3. No Appropriation of a partnership business opportunity- 4. No Disclosure of confidential information.- Note: Appropriation = take for own use- As far as conflicts of interest, transactions between apartner and the partnership are fully permissible if certaincriteria (including notice and fairness) are met.
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Q1088.- What is Duty of Care?
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A1088.- "Refraining from engaging in:- Grossly negligent or reckless conduct- Intentional misconduct, OR- A knowing violation of law
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Q1089.- How should partners Discharge their duties to thepartnership and other partners per RUPA?
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A1089.- Consistently with the obligation of good faith and fairdealing
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Q1090.- The partners' fiduciary obligations in UPA jurisdictionsare roughly analogous to those just spelled out for RUPA.T or F
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A1090.- True
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Q1091.- Define Macroeconomics
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A1091.- Macroeconomics is the study of the economy as a whole.- It examines the determinants of national income,unemployment, and inflation and how monetary and fiscalpolicies affect economic activity.
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Q1092.- Define GDP
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A1092.- Gross Domestic Product - total market value of all finalgoods and services produced within the borders of anation.- Includes the output of foreign-owned factories in the U.A.but excludes the output of U.S. owned factories operatedabroad.
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Q1093.- Define Nominal GDP
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A1093.- the value of all final goods and services in current prices(no inflation adjustment).
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Q1094.- Define Real GDP
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A1094.- Value of goods and services in constant prices. GDP isadjusted to account for changes in the price level.Removes inflation by using a price index.
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Q1095.- Real GDP Formula
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A1095.- = ((Nominal GDP) / (GDP Deflator)) x 100- ** GDP Deflator is the price index.
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Q1096.- Real GDP per Capita
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A1096.- Real GDP divided by population.- Used to compare standards of living across countries oracross time. Measure of economic growth.
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Q1097.- What are the 5 business Cycles?
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A1097.- 1. Expansionary- 2. Peak- 3. Contractionary- 4. Trough- 5. Recovery (aka Expansionary)
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Q1098.- Definition of a Recession
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A1098.- two consecutive quarters of falling national output (GDP).
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Q1099.- Define - Depression
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A1099.- Severe recession, characterized by long periods ofstagnation in business activity and high unemploymentrates.
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Q1100.- Leading indicators (before)
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A1100.- Average unemployment claims- building permits for residences- average length of the workweek- money supply- prices of selected stocks- orders for goods- price changes of materials- index of consumer expectations
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Q1101.- Lagging indicators (after)
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A1101.- Prime rate charged by banks- average duration of unemployment- bank loans outstanding
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Q1102.- Coincident indicators (during/contemporaneously)
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A1102.- Industrial production- manufacturing and trade sales
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Q1103.- What is the effect on Aggregate Demand, GDP and pricewhen the demand curve shifts LEFT?
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A1103.- Aggregate Demand down- GDP down- Price down- **leads to contraction in economy
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Q1104.- What is the effect on Aggregate Demand, GDP and pricewhen the demand curve shifts RIGHT?
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A1104.- Aggregate Demand up- GDP up- Price up- **leads to expansion/recovery
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Q1105.- What is the effect on short run aggregate supply, GDPand price when the supply curve shifts RIGHT?
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A1105.- SRAS up- GDP up- Price down
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Q1106.- What is the effect on short run aggregate supply, GDPand price when the supply curve shifts LEFT?
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A1106.- SRAG down- GDP down- price up
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Q1107.- What are the primary factors that shift AggregateDemand?
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A1107.- Changes in:- Wealth- Real Interest Rates- Consumer Confidence (expectations about the futureoutlook)- Exchange Rates- Government Spending- Consumer Taxes
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Q1108.- Define - multiplier effect
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A1108.- Increase in consumer, firm or government spendingproduces a multiplied increase in the level of economicactivity. The muliplier effect results from the marginalpropensity to consume (MPC).
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Q1109.- Multiplier Formula
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A1109.- = (1/(1-MPC)) x change in spending- **MPC is typically less than 1 b/c ppl tend to save part oftheir income. Thus, 1-MPC is the marginal propensity tosave (MPS).
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Q1110.- Factors that shift SHORT run aggregate supply
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A1110.- 1. Changes in input (resource) prices.- 2. Supply Shocks (shortages/excess resources)
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Q1111.- What are the 2 methods for measuring GDP?
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A1111.- Expenditure Approach- Income Approach
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Q1112.- What are the Components of the Expenditure Approach?
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A1112.- G -Government purchases of goods/services- I - gross private domestic Investment- C - personal Consumption expenditures- E - net Exports (exports minus imports) - can be anegative #- **mnemonic: GICE- GPD = G + I + C + E
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Q1113.- How do you calculate GDP using the Income Approach?
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A1113.- mnemonic: IPIRATED- Income of proprietors- Profits of corporations- Interest (net)- Rental income- Adjustments for net foreign income and misc income- Taxes (indirect business taxes)- Employee compensation (wages)- Depreciation (aka capital consumption allowance)
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Q1114.- Formula for NDP
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A1114.- Net Domestic Product = GDP - Depreciation
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Q1115.- Define GNP
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A1115.- Value of final goods and services produced by residentsof a country in a given time period.- Example: BMW produces cars in U.S. - counts as GDP butnot GNP b/c it is foreign owned.
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Q1116.- Formula for NNP
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A1116.- Net National Product =- GNP - Depreciation
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Q1117.- Formula for National Income
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A1117.- NNP - Sales Tax (indirect business taxes)
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Q1118.- Formula for PI
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A1118.- Personal Income = National Income +/- various adj:- NI less:- undistributed corp profits (RE)- Net interest- Contributions for social measures (soc securitycontributions)- Corporate income taxes- Plus:- Government transfer pmts to individuals- Personal interest income- Business transfer payments/dividends
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Q1119.- Calculate Disposable Income
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A1119.- DI = PI - personal taxes- Income households have available to spend or save.
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Q1120.- Unemployment Rate Formula
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A1120.- unemployment rate = (# unemployed/total labor force) x100- Note: unemployed is a person over 16 who is available forwork and has actively sought employment- Note 2: total labor force includes all non-institutionalizedppl 16+ who were working or actively looking for work.
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Q1121.- Identify the types of unemployment
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A1121.- 1. Frictional- 2. Structural- 3. Seasonal- 4. Cyclical
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Q1122.- Define Consumer Price Index
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A1122.- CPI is a measure of the overall cost of a fixed basket ofgoods and ervices purchased by an averae household.Note: PPI is the producer price index, which focuses onpurchses by firms).
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Q1123.- Formula for Inflation Rate
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A1123.- Change in CPI = Inflation Rate- (CPI this period - CPI last period) / CPI last period x 100
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Q1124.- Formula for Real Interest Rate
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A1124.- Nominal Interest Rate - Inflation Rate
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Q1125.- M1, M2 and M3 defined (money supply)
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A1125.- M1 - $ used for the purchase of goods / services (coins,currency, and checkable deposits).- M2 - M1 plus liquid assets that cannot be used as amedium of exchange (savings, mmf, CD's less than$100,000)- M3 - M2 plus CD's greater than $100,000.
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Q1126.- Ways the FED controls the money supply
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A1126.- 1. Open Market Operations (OMO) (t-bills and bonds)- 2. Changes in Discount Rate (int rate charged to banks forST loans)- 3. Changes in the Required Reserve Ratio (RRR) (fractionof total deposits banks must hold in reserve).
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Q1127.- Identify the steps (in order) in strategic managment(strategic positioning)
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A1127.- 1. Define the firm's vision and mission statements.- 2. Set the goals of the firm- 3. Define the objectives of the firm- 4. Decide what to measure and take a baselinemeasurement (critical success factors)- 5. SWOT (strategic)- 6. Create the strategic plan- 7. Implement the strategic plan- 8. Evaluate and revise the plan as needed.
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Q1128.- Define change in demand
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A1128.- Change in the amount of good demanded resulting from achange in something OTHER THAN price. (shift in thedemand curve)
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Q1129.- Define change in QUANTITY demanded
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A1129.- Change in the amount of a good demanded resultingSOLELY from a change in price. (movement along thedemand curve)
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Q1130.- Identify the factors that shift the demand CURVE
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A1130.- Mnemonic: WRITEN- Changes in:- Wealth- price of Related goods (subs/complements)- consumer Income- Tastes/preferences- consumer Expectations- Number of buyers in a market
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Q1131.- Identify the factors that shift the supply CURVE
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A1131.- Mnemonic: ECOST- Expectations of the supplying firm (prices)- production Costs- Other goods price/demands (ie new iphone vs. oldiphone)- Subsidies/taxes- production Technology (improvements)
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Q1132.- What is the effect of a simultaneous change in demandand supply on the equilibrium?
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A1132.- Demand and Supply - Increase (Decrease)- Quantity - Increase (Decrease)- Price - Indeterminate
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Q1133.- Price Elasticity - supply/demand >1.0
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A1133.- Elastic
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Q1134.- Price Elasticity - supply/demand < 1.0
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A1134.- Inelastic
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Q1135.- Unit Elastic
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A1135.- Supply / Demand = 1
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Q1136.- Cross Elasticity
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A1136.- % change in the quantity demanded (or supplied) of onegood caused by the price change of another good.
![Page 2273: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2273.jpg)
Q1137.- Cross Elasticity: What type of good is it if the coefficientis positive, negative, or zero?
![Page 2274: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2274.jpg)
A1137.- Positive – Substitutes- Negative – Complements- Zero - Unrelated products
![Page 2275: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2275.jpg)
Q1138.- Positive Income Elasticity
![Page 2276: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2276.jpg)
A1138.- Demand increases as income decreases.- Normal Good (premium foods such as steak and lobster)
![Page 2277: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2277.jpg)
Q1139.- Negative Income Elasticity
![Page 2278: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2278.jpg)
A1139.- Demand decreases as income increases.- Inferior good (canned veggies or hamburger)
![Page 2279: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2279.jpg)
Q1140.- What are the 4 Market structures (from most competitiveto least comp.)
![Page 2280: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2280.jpg)
A1140.- 1. Perfect/Pure Competition- 2. Monopolistic- 3. Oligopoly- 4. Monopoly
![Page 2281: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2281.jpg)
Q1141.- Attributes of Perfect Competition
![Page 2282: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2282.jpg)
A1141.- 1. No barriers to entry- 2. Large # of suppliers and customers- 3. Very little product differentiation- 4. No individual firm can influence the market price of itsproduct nor shift the market supply sufficiently to make agood more scarce or abundant.
![Page 2283: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2283.jpg)
Q1142.- Attributes of a Monopoly
![Page 2284: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2284.jpg)
A1142.- 1. Strategic plans will likely focus on profitability, notmarket share- 2. Single firm w/ a unique product- 3. Significant barriers to entry- 4. set output and prices- 5. No substitute products
![Page 2285: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2285.jpg)
Q1143.- Attributes of Monopolistic Competition
![Page 2286: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2286.jpg)
A1143.- 1. Numerous firms with differentiated products- 2. Few barriers to entry- 3. Ability to exert some influence over price and market- 4. Significant non-price competition in the market (brandloyalty.
![Page 2287: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2287.jpg)
Q1144.- Attributes of an Oligopoly
![Page 2288: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2288.jpg)
A1144.- 1. Few sellers dominate the sales of a product and entryof new sellers is difficult or impossible (automobiles)- 2. Relatively few firms w/ differentiated products- 3. Fairly significant barriers to entry- 4. Prices tend to be fixed.- 5. Tend to face a kinked demand curve
![Page 2289: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2289.jpg)
Q1145.- Define: Kinked Demand Curve
![Page 2290: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2290.jpg)
A1145.- Firms match price cuts of competitors but ignore priceincreases
![Page 2291: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2291.jpg)
Q1146.- What are the characteristics of Stagflation?
![Page 2292: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2292.jpg)
A1146.- - Occurs when the economy suffers a recession,characterized by falling output, rising unemployment, andrising price levels.
![Page 2293: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2293.jpg)
Q1147.- Advantages and Disadvantages of Payback PeriodMethod
![Page 2294: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2294.jpg)
A1147.- Advantages:- Easy to Understand- Emphasis on Liquidity: how long it will take to pay backDisadvantages:- TVM is ignored- Reinvestment cash flows are not considered- Project profitability is neglected- After initial investment is recovered, cash flows after areignored.
![Page 2295: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2295.jpg)
Q1148.- Advantages and Disadvantages of DCF
![Page 2296: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2296.jpg)
A1148.- Advantages:- Best for long - run decisions- Includes TVMDisadvantages:- Single interest rate, doesn't adjust w/ time
![Page 2297: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2297.jpg)
Q1149.- Objective of Payback Period:- Objective of Discounted Payback Period:
![Page 2298: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2298.jpg)
A1149.- - After tax cash inflow to recover the initial investment.- Evaluate how quickly new ideas are converted intoprofitable ideas.- **Often used in companies that experience rapid tech.changes.
![Page 2299: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2299.jpg)
Q1150.- Advantages and Disadvantages of Discounted Payback:
![Page 2300: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2300.jpg)
A1150.- Same as payback period method:- **EXCEPT** it includes TVM
![Page 2301: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2301.jpg)
Q1151.- Objective of Net Present Value Method:
![Page 2302: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2302.jpg)
A1151.- It focuses an investment that will yield returns in anamount in excess of a management designated hurdle rate.- If NPV is positive = accept
![Page 2303: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2303.jpg)
Q1152.- What does NPV ignore?
![Page 2304: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2304.jpg)
A1152.- Depreciation (unless it is a tax shield)And- Method of Funding
![Page 2305: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2305.jpg)
Q1153.- Which is better NPV or IRR?
![Page 2306: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2306.jpg)
A1153.- NPV is considered better b/c it is flexible enough toconsistently handle uneven cash flows or inconsistentrates of return for each year.
![Page 2307: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2307.jpg)
Q1154.- Advantages and Disadvantages of NPV:
![Page 2308: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2308.jpg)
A1154.- Advantages:- Very flexible and can be used when there is no constantrate of return required for each year of the project- Best SINGLE technique for cap. budgeting.Disadvantage- Does not provide true rate of return on investment, it usesthe management hurdle rate.
![Page 2309: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2309.jpg)
Q1155.- How to solve NPV?
![Page 2310: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2310.jpg)
A1155.- 1) Calculate Tax Depreciation shield (net of tax)- 2) Calculate Annual Cash Savings (net of tax)- 3) Calculate Salvage Value- (net of tax)- 4) Add inflows from Annual Savings + Tax Shield +Salvage value- 5) Multiply by discount rate ** If annual savings isconstant use OA / if not use PV of $1- 6) Subtract outflow --> Inflow = if positive ACCEPT.
![Page 2311: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2311.jpg)
Q1156.- Objective of IRR?
![Page 2312: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2312.jpg)
A1156.- IRR is expected rate of return of a project.- "Time adjusted rate of return"
![Page 2313: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2313.jpg)
Q1157.- How to solve IRR?
![Page 2314: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2314.jpg)
A1157.- 1) Determine life of the Asset- 2) Calculate Payback Period:- Net incremental investment /- Net annual cash flows- 3) Find Proper PV Table- 4) Use your U/L and PP to find IRR
![Page 2315: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2315.jpg)
Q1158.- Disadvantages of IRR
![Page 2316: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2316.jpg)
A1158.- - Unreasonable reinvestment assumption: assumed toreinvested at IRR, but that is difficult to predict if it willreach the IRR- Inflexible Cash Flow Assumption: IRR is less reliable thanNPV b/c when there are several alternating periods of netcash inflows and net cash outflows or the amounts of thecash flows differ significantly- Evaluates only based on interest rates
![Page 2317: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2317.jpg)
Q1159.- What is Capital Rationing?
![Page 2318: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2318.jpg)
A1159.- when you have a LIMITED CAPITAL:- You rank projects b/t:- 1) Importance- 2. Ranking and Acceptance: managers will allocatecapital to the combination of projects with max NPV
![Page 2319: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2319.jpg)
Q1160.- Three types of Risk Preferences
![Page 2320: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2320.jpg)
A1160.- 1) Risk - Indifferent- 2) Risk - Averse- 3) Risk - Seeking
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Q1161.- Attributes of Risk - Indifferent
![Page 2322: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2322.jpg)
A1161.- Increase in risk would NOT increase required rate ofreturn
![Page 2323: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2323.jpg)
Q1162.- Attributes of Risk - Averse
![Page 2324: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2324.jpg)
A1162.- Increase in risk would increase required rate of return
![Page 2325: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2325.jpg)
Q1163.- Attributes of Risk - Seeking
![Page 2326: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2326.jpg)
A1163.- Increase in risk would DECREASE required rate of return
![Page 2327: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2327.jpg)
Q1164.- Diversifiable vs. Nondiversifiable Risk
![Page 2328: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2328.jpg)
A1164.- Diverse: non-market / unsystematic / firm specific: riskcan be eliminated by diversification- Non-Diversifiable: Market/Systematic Risk Cannot beeliminated through diversification
![Page 2329: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2329.jpg)
Q1165.- Accrued L + A/P + Current portion of long-term notepayable =
![Page 2330: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2330.jpg)
A1165.- Current liabilities
![Page 2331: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2331.jpg)
Q1166.- Cash+ A/R + inventory =
![Page 2332: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2332.jpg)
A1166.- Current Assets- Prepaid assets - not CA
![Page 2333: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2333.jpg)
Q1167.- Avg. Gross Receivable balance =
![Page 2334: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2334.jpg)
A1167.- AVG daily sales x Average collection period
![Page 2335: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2335.jpg)
Q1168.- Gross Margin =
![Page 2336: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2336.jpg)
A1168.- = ( unit price - unit cost ) x number of units
![Page 2337: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2337.jpg)
Q1169.- The debt-to-equity ratio measures the
![Page 2338: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2338.jpg)
A1169.- % of total financing provided by creditors (debt)compared to financing by owners.
![Page 2339: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2339.jpg)
Q1170.- The interest coverage ratio measures the
![Page 2340: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2340.jpg)
A1170.- firm's ability to make required interest payments.- The higher - the greater ability to repay the debt.
![Page 2341: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2341.jpg)
Q1171.- The return on Equity reflects the
![Page 2342: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2342.jpg)
A1171.- net income that accrued to owners
![Page 2343: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2343.jpg)
Q1172.- If there is no provision for allocating losses ->
![Page 2344: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2344.jpg)
A1172.- the method used to allocate profits will be used
![Page 2345: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2345.jpg)
Q1173.- Inventory T/Over ratio
![Page 2346: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2346.jpg)
A1173.- COGS / AVG inventory
![Page 2347: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2347.jpg)
Q1174.- List major risks associated with the A/R component of thesystem?
![Page 2348: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2348.jpg)
A1174.- Credit may be applied to improper accounts- Updates of credit ratings may be untimely- Financial or management reporting may be inaccurate
![Page 2349: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2349.jpg)
Q1175.- EVA % =
![Page 2350: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2350.jpg)
A1175.- RCOE % - WACC %,- where RCOE = Oper. income / capital,- WACC = Cost of debt + cost of equity
![Page 2351: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2351.jpg)
Q1176.- What costs are relevant in decision making?
![Page 2352: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2352.jpg)
A1176.- only INCREMENTAL (fixed or variable)
![Page 2353: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2353.jpg)
Q1177.- Seasonality in data may be removed by calculating a
![Page 2354: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2354.jpg)
A1177.- WEIGHTED AVERAGE of the data for the four seasonaltime periods
![Page 2355: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2355.jpg)
Q1178.- Treating dividends as a residual part of a financialdecision assumes that
![Page 2356: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2356.jpg)
A1178.- earnings should be retained and reinvested as long asprofitable projects are available
![Page 2357: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2357.jpg)
Q1179.- Interest on long-term debt costs ______ than interest onshort-term debt because
![Page 2358: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2358.jpg)
A1179.- more- of risk associated with longer maturity dates
![Page 2359: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2359.jpg)
Q1180.- The intercept value is where the line crosses the _____axis.
![Page 2360: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2360.jpg)
A1180.- Y axis
![Page 2361: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2361.jpg)
Q1181.- The implicit cost of debt financing is the
![Page 2362: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2362.jpg)
A1181.- increase in the cost of debt and equity as the debt-to-equity ratio increases
![Page 2363: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2363.jpg)
Q1182.- ADRs are receipts issued by a US bank which representsownership rights in
![Page 2364: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2364.jpg)
A1182.- a foreign corporation
![Page 2365: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2365.jpg)
Q1183.- Cost of asset + increase in WC - tax saved - cash receivedfrom sale of old asset =
![Page 2366: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2366.jpg)
A1183.- NET OF INVESTMENT
![Page 2367: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2367.jpg)
Q1184.- EBIT=
![Page 2368: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2368.jpg)
A1184.- Total revenue - total Var. costs- total Fixed Costs
![Page 2369: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2369.jpg)
Q1185.- At what rate company would be INDIFFERENT to theinvestment?
![Page 2370: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2370.jpg)
A1185.- at the IRR- CF * IRR ( or annuity factor)= PV of initial investment
![Page 2371: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2371.jpg)
Q1186.- How do you solve the problem if CL is known and CurrentRatio will change from 1.75 to 1.5 to 1?
![Page 2372: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2372.jpg)
A1186.- CA + incease in Inv / CL + incease in Inv. = 1.5
![Page 2373: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2373.jpg)
Q1187.- How to calculate conversion costs transferred to seconddepartment using WA method and normal spoilage isgiven?
![Page 2374: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2374.jpg)
A1187.- 1) calc. Equivalent units= completed + spoiled + %completed of end units- 2) Cost per Eq. unit = Total conversion costs / Eq. units- 3) Conversion costs transferred = Cost per unit x ( Goodunits + Normal spoilage)
![Page 2375: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2375.jpg)
Q1188.- Leverage refers to the amount of _________ in the firm'sstructure
![Page 2376: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2376.jpg)
A1188.- Debt
![Page 2377: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2377.jpg)
Q1189.- FIXED OVERHEAD is a Product cost for ABSORPTIONCOSTING at the time of _________ and- a PERIOD COST under Variable costing at time of________
![Page 2378: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2378.jpg)
A1189.- SALE- PRODUCTION
![Page 2379: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2379.jpg)
Q1190.- What is Job Order Costing?
![Page 2380: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2380.jpg)
A1190.- A costing technique used to accumulate costs related tothe production of large, expensive, homogeneous (custom)items. -- Can be used for Service items.
![Page 2381: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2381.jpg)
Q1191.- Describe the process of accumulating costs in a job ordercosting system.
![Page 2382: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2382.jpg)
A1191.- 1. The costs are accumulated in individual WIP accounts,also called job order cost sheets. The TOTAL of each job(WIP acct) is transferred to the WIP-Control account.- 2. Overhead is applied based on a predetermined rate- 3. When job is complete, the total cost is transferred toFinished Goods.- 4. When sold, costs flow to CGS.
![Page 2383: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2383.jpg)
Q1192.- What is Cost of Goods Completed?
![Page 2384: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2384.jpg)
A1192.- It is the same as the Cost of Goods Manufactured.
![Page 2385: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2385.jpg)
Q1193.- What is Factory Overhead Applied (FOA)?
![Page 2386: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2386.jpg)
A1193.- It is the estimated overhead for the period.- This amount is calculated at the beg of the period andthen charged to WIP.- Actual Overhead costs are kept separately and expensed.- Any difference between applied and actual is under oroverapplied overhead.- Under/Over applied overhead is charged to WIP and whensold, to CGS.
![Page 2387: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2387.jpg)
Q1194.- How is Factory Overhead calculated?
![Page 2388: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2388.jpg)
A1194.- By applying the PDRate to the actual activity units used inproduction.
![Page 2389: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2389.jpg)
Q1195.- What is the calculation for the predetermined rate foroverhead?
![Page 2390: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2390.jpg)
A1195.- PDR = Estimated Total Manf Cost/Estimated Norm ActivityVolume- * The estimates must be based on attainable standards.
![Page 2391: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2391.jpg)
Q1196.- What is Process Costing?
![Page 2392: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2392.jpg)
A1196.- A costing technique used to accumulate costs for mass-produced, continuous, homogeneous items which areoften small and inexpensive.
![Page 2393: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2393.jpg)
Q1197.- What is the problem that occurs with process costing?
![Page 2394: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2394.jpg)
A1197.- Since costs are not accumulated for individual items theproblem becomes one of TRACKING the # of units movingthru WIP into FG and allocating the costs incurred to theseunits on a rational basis.
![Page 2395: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2395.jpg)
Q1198.- What complicates the process costing?
![Page 2396: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2396.jpg)
A1198.- 1. There may be partially completed goods in beg and endinventories.- 2. Each of the 3 factors of production (DM, DL, FO) maybe at different levels of completion.- 3. Some costs do not occur uniformly across the process;esp DM.- 4. There are two methods for calculating "equivalentunits," FIFO and Weighted Avg. (These are not the same asthe cost flow assumptions in financial acctg0
![Page 2397: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2397.jpg)
Q1199.- What is breakeven analysis?
![Page 2398: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2398.jpg)
A1199.- The sales level at which sales revenue exactly offsetstotal costs, both variable and fixed.
![Page 2399: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2399.jpg)
Q1200.- What is meant by Total Costs in breakeven analysis?
![Page 2400: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2400.jpg)
A1200.- Fixed and variable costs, manufacturing andselling/administrative costs
![Page 2401: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2401.jpg)
Q1201.- The breakeven point is usually expressed in what?
![Page 2402: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2402.jpg)
A1201.- Sales Units or Dollars
![Page 2403: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2403.jpg)
Q1202.- What approach is used to calculate breakeven in units?
![Page 2404: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2404.jpg)
A1202.- Contribution Margin per Unit Approach
![Page 2405: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2405.jpg)
Q1203.- What is contribution margin?
![Page 2406: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2406.jpg)
A1203.- The portion of revenues available to cover fixed costs.
![Page 2407: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2407.jpg)
Q1204.- What is the formula for calculating contribution margin?
![Page 2408: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2408.jpg)
A1204.- Sales Revenue - Variable Costs
![Page 2409: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2409.jpg)
Q1205.- What is contribution margin per unit?
![Page 2410: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2410.jpg)
A1205.- The dollar amount of the sale an individual unitcontributes to covering fixed costs.
![Page 2411: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2411.jpg)
Q1206.- What's the formula for calculating contribution margin perunit?
![Page 2412: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2412.jpg)
A1206.- CMU = SPU – VCU- CM = Sales Price per Unit - Variable Costs per Unit
![Page 2413: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2413.jpg)
Q1207.- Besides the dollar amount per unit needed to breakeven,what other information can the contribution margin perunit provide?
![Page 2414: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2414.jpg)
A1207.- Can provide the # of units needed to breakeven.
![Page 2415: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2415.jpg)
Q1208.- How is Sales Price per Unit (SPU) calculated?
![Page 2416: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2416.jpg)
A1208.- SPU = Total Sales/# Units Sold
![Page 2417: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2417.jpg)
Q1209.- How is Variable Cost per Unit (VCU) calculated?
![Page 2418: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2418.jpg)
A1209.- VCU = Total Sales - Fixed Costs/# Units Sold
![Page 2419: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2419.jpg)
Q1210.- What is the formula for calculating the breakeven point indollars (BPD)?
![Page 2420: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2420.jpg)
A1210.- BPD = BPU x SPU- Breakeven pt in units * Sales Price per unit
![Page 2421: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2421.jpg)
Q1211.- When no sales price per unit or variable cost per unit isavailable, what can be used to calculate breakeven point indollars?
![Page 2422: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2422.jpg)
A1211.- Contribution Margin Ratio Approach
![Page 2423: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2423.jpg)
Q1212.- What three elements must be available to calculate theContribution Margin Ratio?
![Page 2424: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2424.jpg)
A1212.- Sales Revenue, total variable costs, total fixed costs
![Page 2425: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2425.jpg)
Q1213.- What's the formula for calculating CMR?
![Page 2426: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2426.jpg)
A1213.- CMR = (SRev – Vcosts) / SRev
![Page 2427: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2427.jpg)
Q1214.- What is the contribution margin ratio?
![Page 2428: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2428.jpg)
A1214.- The % of each sales dollar that is available to cover fixedcosts.
![Page 2429: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2429.jpg)
Q1215.- Virtually all breakeven questions on the CPA exam can besolved by what two formulas?
![Page 2430: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2430.jpg)
A1215.- Breakeven Point in Units &- Breakeven Point in Dollars- BPU - TFC/CMU- BPD - TFC/CMR
![Page 2431: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2431.jpg)
Q1216.- What is targeted profit?
![Page 2432: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2432.jpg)
A1216.- When you want to sales revenue to cover more thant totalcosts but to also provide a profit.
![Page 2433: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2433.jpg)
Q1217.- What is the formula for calculating targeted profit (TP)?
![Page 2434: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2434.jpg)
A1217.- TP = TFC + Targeted Profit / CMU or CMR
![Page 2435: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2435.jpg)
Q1218.- Breakeven Analysis~~- What is a good way to think about how the contributionmargin approach calculates breakeven?
![Page 2436: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2436.jpg)
A1218.- The CM in the denominator must cover the amount in thenumerator.
![Page 2437: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2437.jpg)
Q1219.- Summary:- What are the six main formulas for calculatingbreakeven?
![Page 2438: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2438.jpg)
A1219.- CM = SRev - Var Costs- CMU = SPU – VCU- BPU = TFC/CMU- BPD = TFC/CMR- CMR = CM/SRev- BP w/Targeted Profit = TFC/CMU or CMR
![Page 2439: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2439.jpg)
Q1220.- What is the margin of safety?
![Page 2440: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2440.jpg)
A1220.- The diff between budgeted and actual sales (units ordollars) and breakeven sales (units or dollars).
![Page 2441: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2441.jpg)
Q1221.- Define Sunk Costs
![Page 2442: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2442.jpg)
A1221.- Sunk costs are those that have already been incurred, areunavoidable in the future, and will not vary with the courseof action taken
![Page 2443: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2443.jpg)
Q1222.- What is the general definition of opportunity cost?
![Page 2444: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2444.jpg)
A1222.- Opportunity cost is the potential benefit lost by selectinga particular course of action.
![Page 2445: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2445.jpg)
Q1223.- Define opportunity costs evaluated in considering anopportunity when the firm is operating at capacity.
![Page 2446: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2446.jpg)
A1223.- Opportunity cost at full capacity is defined as the netbenefit given up from the best alternative use of thecapacity.
![Page 2447: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2447.jpg)
Q1224.- What is the formula for after-tax cost?
![Page 2448: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2448.jpg)
A1224.- (1.00-tax rate) × tax deductible cash expense = after taxcost aka net cash outflow.
![Page 2449: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2449.jpg)
Q1225.- What is the formula for after-tax benefit?
![Page 2450: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2450.jpg)
A1225.- (1.00-tax rate) × tax cash receipt = after tax benefit aka netcash inflow.
![Page 2451: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2451.jpg)
Q1226.- The formula for computing a depreciation tax shield is:
![Page 2452: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2452.jpg)
A1226.- Tax rate × depreciation deduction = tax savings from thedepreciated tax shield.
![Page 2453: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2453.jpg)
Q1227.- What is the formula for the contribution approach?
![Page 2454: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2454.jpg)
A1227.- Revenue- Less: Variable Cost- CONTRIBUTION MARGIN- Less: Fixed Costs- NET INCOME
![Page 2455: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2455.jpg)
Q1228.- Contribution margin ratio formula:
![Page 2456: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2456.jpg)
A1228.- Contribution margin / revenue
![Page 2457: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2457.jpg)
Q1229.- What is the absorption formula?
![Page 2458: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2458.jpg)
A1229.- Revenue- Less: COGS- GROSS MARGIN- Less: Oper. Exp.- NET INCOME
![Page 2459: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2459.jpg)
Q1230.- Formula for breakeven point in units:
![Page 2460: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2460.jpg)
A1230.- Total fixed costs / CM per Unit = Breakeven point in units
![Page 2461: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2461.jpg)
Q1231.- Formula for breakeven point in dollars:
![Page 2462: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2462.jpg)
A1231.- Total Fixed Costs / CM Ratio = Breakeven point in dollars
![Page 2463: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2463.jpg)
Q1232.- What is the margin of safety formula?
![Page 2464: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2464.jpg)
A1232.- Total Sales - Breakeven Sales = Margin of safety
![Page 2465: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2465.jpg)
Q1233.- Define the steps and formula for economic value added.
![Page 2466: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2466.jpg)
A1233.- Step 1: Calculate the required amount of return andincome after taxes- Investment * Cost of Capital = Required Return- Step 2: Compare to the required return- Income after taxes - required return = economic valueadded
![Page 2467: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2467.jpg)
Q1234.- What is the payback method formula?
![Page 2468: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2468.jpg)
A1234.- Net initial investment / Incease in annual net after taxcash flow = payback period
![Page 2469: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2469.jpg)
Q1235.- What is risk averse behavior?
![Page 2470: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2470.jpg)
A1235.- Risk averse behavior exists when the certainty equivalent< expected value.
![Page 2471: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2471.jpg)
Q1236.- What is risk seeking behavior?
![Page 2472: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2472.jpg)
A1236.- Risk seeking behavior exists when the certaintyequivalent > expected value.
![Page 2473: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2473.jpg)
Q1237.- What is risk indifferent behavior?
![Page 2474: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2474.jpg)
A1237.- Risk seeking behavior exists when the certaintyequivalent = expected value.
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Q1238.- Distinguish between diversifiable and non-diversifiablerisk.
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A1238.- D Diversifiable Risk- U Unsystematic Risk (Non-Market / Firm Specific)- N Nondiversifiable Risk- S Systematic Risk (Mkt)
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Q1239.- What is the degree of operating leverage formula?
![Page 2478: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2478.jpg)
A1239.- DOL = % Chg in EBIT / % Chg in Sales
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Q1240.- What is the degree of financial leverage formula?
![Page 2480: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2480.jpg)
A1240.- DFL = % Chg in EPS / % Chg in EBIT
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Q1241.- What is the degree of combined leverage formula?
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A1241.- DCL = % Chg in EPS / % Chg in Sales
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Q1242.- Define Weighted Average Cost of Capital
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A1242.- The Weighted Average Cost of Capital (WACC) is theaverage cost of debt & equity associated with the firm'sexisting assets and operations.
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Q1243.- What is the pre-tax cost of debt formula (kdt)?
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A1243.- kdt = (I+(PV-Nd)/N) / ((Nd+PV)/2)- PV = Par value of the bonds- I = Annual Int payments in $- Nd = Net proceeds from the sale of bonds- n = # of yrs to the bond's maturity
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Q1244.- What is the cost of preferred stock formula (kps)?
![Page 2488: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2488.jpg)
A1244.- kps = Dps / Nps- Dps = Preferred stock cash dividends- Nps = Net proceeds of preferred stock
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Q1245.- What is the cost of retained earnings (Kre), using theCAPM formula?
![Page 2490: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2490.jpg)
A1245.- Kre = krf + [bi×(km-kf)]- krf= risk free rate- bi = beta coefficient of the stock- PMR = Market risk premium- km = Market rate
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Q1246.- Define the Weighted Average Cost of Capital (retainedearnings) by formula
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A1246.- Below is terminology used in the cost of capital and arepart of the WACC formula:- wdx = (weight for) long-term debt- wps = (weight for) preferred stock- wcs = (weight for) common stock equity- kwc = weighted average cost of capital- "k" stands for the specific COST of each type of capital;"w" stands for the WEIGHT of each. So, WACC would be...- kwc = (kdx×wdx) + (kps×wps) + (kcs×wcs)
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Q1247.- What is the formula for working capital?
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A1247.- CA - CL = WC
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Q1248.- What are the three (3) motivations for holding cash?
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A1248.- 1. TRANSACTION MOTIVE- A transaction motive for holding cash is concerned withhaving enough cash to meet payments arising from theordinary course of business.- 2. SPECULATIVE MOTIVE- A speculative motive for holding cash is concerned withhaving enough cash to take advantage of temporaryopportunities.- 3. PRECAUTIONARY MOTIVE- A precautionary motive for holding cash is concernedwith having enough cash to maintain a safety cushion sothat unexpected needs may be met.
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Q1249.- What is the formula for computing the annual percentagerate of quick payment discounts?
![Page 2498: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2498.jpg)
A1249.- (360 / (pay period - discount period)) ×(Discount % / (100%- Discount%))
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Q1250.- What is the cash conversion cycle formula?
![Page 2500: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2500.jpg)
A1250.- inventory conversion period + receivables collectionperiod - payables deferral period
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Q1251.- What is the equation for economic order quantity?
![Page 2502: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2502.jpg)
A1251.- Mnemonic: e = (2soc)- or- e = square root of (2so/c)
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Q1252.- Name and briefly describe the five major components thatcomprise the information technology of an organization.
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A1252.- 1. Hardware- 2. Network- 3. Software- 4. Data- 5. People
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Q1253.- Describe the normal series of events in an AccountingInformation System (AIS):
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A1253.- 1. Transaction data from source documents is enteredinto the AIS by the end user.- 2. The original paper source documents are filed.- 3. These transactions are recorded in the appro. journal.- 4. The transactions are posted in the general andsubsidiary ledgers.- 5. TBs are prepared- 6. Financial reports are generated.
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Q1254.- Name and briefly describe five different types of MISreports.
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A1254.- 1. Periodic Scheduled Reports- 2. Exception Reports- 3. Demand Reports- 4. Ad Hoc Reports- 5. Push Reports
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Q1255.- What are the various categories of the BusinessInformation Systems?
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A1255.- 1. Transactional processing systems.- 2. Knowledge systems.- 3. Mgmt information systems.- 4. Decision support systems.- 5. Executive information systems.
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Q1256.- What are the primary roles of the Biz Info Systems (BIS)?
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A1256.- 1. Process detail data- 2. Assist in making daily decisions, and- 3. Assist in developing business strategies
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Q1257.- What are the reporting risks in a BIS?
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A1257.- 1) Strategic Risk- 2) Operating Risk- 3) Financial Risk- 4) Information Risk
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Q1258.- Identify functions that should be segregated in an ITdepartment.
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A1258.- The duties of systems analysts, computer programmers,and computer operators should be segregated.
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Q1259.- Identify the four functions of a DBMS:
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A1259.- 1. Database Development- 2. Database Query- 3. Database Maintenance- 4. Application Development
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Q1260.- Identify the seven components of a LAN.
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A1260.- 1. NODE- 2. Workstation- 3. Server- 4. Network Interface Card (NIC)- 5. Transmission Media- 6. Network Operating System (NOS)- 7. Communications Device.
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Q1261.- Identify the two types of networks that can be used toprovide WAN Communications services.
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A1261.- VAN - privately own communications networks thatprovide additional services beyond standard datatransmissions- Internet based networks - use internet protocols andpublic communications channels to establish networkcommunications.
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Q1262.- List some of the features of the value added network.
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A1262.- VAN:- is privately owned- provides additional services- provides good security- uses periodic (batch) processing- may be expensive.
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Q1263.- List some of the features of an internet-based network.
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A1263.- An internet based network:- uses public communication channels- transmits transactions immediately- is relatively affordable- increases the number of potential trading partners.
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Q1264.- What is the difference between the intranet and theextranet?
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A1264.- An intranet connects geographically separate LANswithin a company, whereas an extranet permits specifiedexternal parties to access the company's network.
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Q1265.- Describe two types of processing used in thecomputerized environment.
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A1265.- Batch processing – processing- On-line, real-time (OLRT) processing - immediateprocessing
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Q1266.- Identify three types of computer software.
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A1266.- System software (programs that run the computer).- Programming languages (generate computer processinginstructions)- Application software (end user programs)
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Q1267.- What is a batch control total?
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A1267.- A batch control total is a manually calculated total that iscompared to a computer generated total as a means oftesting accuracy and completeness.
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Q1268.- What are the advantages and disadvantages ofcentralized processing?
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A1268.- Advantages:- Data is secured better, once received.- Processing is consistent (decentralized systems may result ininconsistent processing among regional offices).- Disadvantages:- cost of transmitting large numbers of detailed transaction canbe high- there are increasing processing power and data storageneeds at the central location.- there is a reduction in local accountability- input/output bottlenecks may occur at high traffic times.- there may be a lack of ability to respond in a timely manner toinformation requests from remote locations
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Q1269.- Identify some differences and problems that one needs tobe aware of when auditing in a computer environmentrather than in a manual environment.
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A1269.- 1. Disappear Audit Trail- 2. Uniform Transaction Processing- 3. Computer Initiated Transactions- 4. Potential for Increased Errors and Irregularities- 5. Potential for Increased Supervision and Review.
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Q1270.- List and explain the steps in batch processing.
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A1270.- Batch processing is accomplished in two steps:- 1. Create a transaction file: the first step is to create atransaction file by manually (usually) keying the data (dataentry), editing the data for completeness and accuracy,and making any necessary corrections.- 2. Update the Master File: the second step is to updatethe master file by sorting the transaction file into the sameorder as the master file and then updating the relevantrecords in the master file from the transaction file.
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Q1271.- What is the basic difference between a databasemanagement system and a database?
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A1271.- A database is an integrated collection of data records anddata files.- A database management system (DBMS) is the softwarethat allows an organization to create, use, and maintain adatabase.
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Q1272.- What is a data warehouse and what is data mining?
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A1272.- A data warehouse is a collection of databases that storeboth operations and management data.- Data mining is the processing of data in a data warehouseto attempt to identify trends and patterns of businessactivity.
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Q1273.- What are some advantages of a DBMS?
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A1273.- Advantages of a DBMS include:- 1. Data redundancy & inconsistency are reduced.- 2. Data sharing exits- 3. Data independence exists- 4. Data standardization exits- 5. Data security is improved, and- 6. Data fields can be expanded without adverse effects onapplication programs.
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Q1274.- What is the basic difference between WANs and LANs?
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A1274.- The basic difference between WANs and LANs isdistance.- LANs normally are within a fairly limited distance, andWANs allow much longer distance.
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Q1275.- How can the internet be defined?
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A1275.- The internet is an international network composed ofservers around the world that communicate with eachother.
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Q1276.- What are some of the similarities and differences betweenthe internet, intranets, and extranets?
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A1276.- The internet, intranets, and extranets all use internetprotocols and public communication networks rather thanproprietary protocols and networks so that the samebrowsers can be used.- Intranets connect LANs within a company- Extranets allow a company's customers and suppliers toaccess the company's network.
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Q1277.- What are three types of programmed controls?
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A1277.- 1. input controls- 2. processing controls- 3. output controls
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Q1278.- What is the major distinction between batch processingand online processing?
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A1278.- The major distinction between batch processing andonline processing is that transactions in a bath processingsystem are processed in batches and not necessarily atthe time those transactions are submitted.- In online processing, transactions are processed as thetransactions are entered.
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Q1279.- What is the distinction between centralized anddistributed process?
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A1279.- Central processing maintains data and performs dataprocessing at one or more central locations.- Decentralized processing occurs when computing powerand processing are spread out over many locations.
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Q1280.- What characteristics of a computerized system might leadto a higher potential for errors and irregularities than inmanual systems?
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A1280.- The following:- 1. the opportunity for remote access increases thelikelihood for unauthorized access.- 2. concentration of information means that once securityis breached, the potential for damage is higher- 3. decreased human involvement in processing results ina decreased opportunity for observation of errors- 4. errors of fraud might occur in the design ormaintenance of application programs
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Q1281.- What are access controls?
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A1281.- Access controls limit access to program documentation,data files, programs, and computer hardware to authorizedpersonnel.- Examples include locks, passwords, user id codes,assignment of security levels, call backs on dial upsystems, setting of file attributes, and use of firewalls.
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Q1282.- What is a firewall?
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A1282.- A firewall is a system of user identification andauthorization that prevents unauthorized users formgaining access to network controls.
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Q1283.- What is disaster recovery and what is the differencebetween a hot site and a cold site?
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A1283.- Disaster recovery consists of plans for continuingoperations in the event of destruction of not only programand data files but also processing capability.- A hot site is an offsite location that is completelyequipped to immediately take over a company's dataprocessing.- A cold site is an offsite location that has all the electricalconnections and other physical requirements for dataprocessing, but does not have the actual equipment.
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Q1284.- Identify the costs associated with implementing EDI.
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A1284.- 1. Legal Costs- 2. Hardware Costs- 3. Costs of translation software- 4. Costs of Data Transmission- 5. Process reengineering and employee training costs foraffected applications- 6. Costs associated with security, monitoring, and controlprocedures.
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Q1285.- Define B2B transactions and identify the three differentmarkets.
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A1285.- When a biz sells its products or services to otherbusinesses, it is called a B2B transaction.- B2B E-commerce: many businesses buy, sell, trade theirproducts & services w/ other businesses.- Electronic Market: it is very common for B2B transactionsto occur electronically via the internet.- Direct Market: it is also very common for b2b transactionsto occur electronically between businesses where there isa pre-existing relationship.
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Q1286.- Identify some advantages of B2B e-commerce.
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A1286.- speed- timing- personalization- security- reliability
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Q1287.- Define electronic funds transfer (EFT).
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A1287.- EFT systems are a major form of electronic payment forbanking and retailing industries.- EFT uses a variety of technologies to transact, process,and verify money transfers and credits between banks,businesses, and consumers.- The FED wire system is used very frequently in EFT toreduce the time and expense required to process cks andcredit transactions.
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Q1288.- Define EDI
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A1288.- EDI is computer to computer exchange of businesstransactions documents.
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Q1289.- How are EDI transactions submitted, and what ismapping?
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A1289.- EDI transactions are submitted ina standard data format- Mapping is the process of determining thecorrespondence between elements in a company'sterminology and elements in standard EDI terminology.
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Q1290.- What are the characteristics / features of EDI?
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A1290.- 1. EDI allows the transmission of electronic documentsbetween computer systems in different orgs.- 2. EDI reduces handling costs and speeds transactionprocessing.- 3. EDI requires that all transactions be submitted in astandard format.- 4. EDI can be implemented using direct links, VANs, orover the internet.
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Q1291.- What are some controls for and EDI system?
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A1291.- Encryption of data- Activity logs of failed transactions- Network and sender / recipient acknowledgments.
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Q1292.- What is e-commerce?
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A1292.- E-commerce involves electronic consummation ofexchange transactions.- E-commerce normally implies the use of the internet.
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Q1293.- What is B2B?
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A1293.- B2B is e-commerce between businesses.
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Q1294.- What is supply chain mgmt?
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A1294.- supply chain mgmt is the mgmt of an organization'ssupply chain including what, when, where, and how muchfor every sale.
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Q1295.- Name the three components of product costs.
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A1295.- Direct Materials (DM)- Direct Labor (DL)- Manufacturing Overhead (MO)- Prime Costs = DM + Dl- Conversion costs = DL + MO
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Q1296.- Distinguish between product & period cost.
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A1296.- Product costs are inventoriable; they become cost ofgoods sold when sold.- Period costs are- expensed in the period incurred.
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Q1297.- Determine the standard overhead rate.
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A1297.- Standard OH rate = Est. total mfg OH costs / Est. totalactivity level of cost driver.
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Q1298.- Define: Executional Cost Driver
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A1298.- executional cost drivers are factors that are helpful to thefirm in managing the short term costs of the firm (egrelationships with suppliers, enhancements to productionprocesses, etc.)
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Q1299.- Define: Structural Cost Drivers
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A1299.- Structural cost drivers are strategic decisions or plansmade by the firm that have a long-term effect on the cost(eg., experience, available technology, etc.)
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Q1300.- Define: Relevant Range
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A1300.- The relevant range is the range of volume for which theassumptions of the cost driver (ie linear relationship withthe costs incurred) are valid and in which the actual valueof the cost driver exists.
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Q1301.- With joint products, what is the treatment of costsincurred before the split-off point?
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A1301.- Costs incurred before split off point are sunk costs, notrelevant to further processing decisions.- Joint costs are allocated using one of the followingmethods. Use % of product to total based on a ratio of:- Relative sales value- Net realizable value- Physical units
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Q1302.- What type of costs does a standard cost measurementsystem use for determination of manufacturing costs?
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A1302.- Standard cost systems use standard costs for allmanufacturing costs (ie raw materials, direct labor andmanufacturing overhead).
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Q1303.- What is the difference between job and process costing?
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A1303.- Job Costing: With job costing, each unit/batch is uniqueand easily identifiable costs determined by each job.- Example: We print your resume in our print shop.- Processing: With processing costing, continuous massproduced identical units are manufactured and costs aredetermined by activity / process / department.- Example: We process crude oil into gasoloine.
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Q1304.- What is an equivalent unit?
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A1304.- Used in process costing, equivalent units are fullycompleted and partially completed units during the period.- In applying costs, determine the units, then costs, thenapply then apply the cost flow for cost per unit andallocation of costs.
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Q1305.- Name the types of spoilage and indicate the appropriateaccounting treatment.
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A1305.- Abnormal: Charge to income of the current period.- Normal: Increase the cost of the product produced (ie.,inventorable).
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Q1306.- Define: Activity Base Costing (ABC)
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A1306.- ABC is a costing theory that assumes that resourceconsuming activities cause costs and that costs should beassigned to benefiting products based on the activitiesperformed and the resources consumed.- ABC systems often divide costs into multiple activitycenters and identify the activities that drive the costs ineach cost center. Costs are then assigned based upon thevolume of cost drivers at the determined rate per costdriver.
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Q1307.- List and define the types of economic costs.
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A1307.- Explicit Costs:- Explicit costs are documented out of pocket expenses.- Implicit Costs:- Implicit costs are opportunity costs of inputs supplied bythe owners (equity contributions).
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Q1308.- Distinguish between accounting and economic costs.
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A1308.- Accounting Costs:- Accounting costs are explicit costs.- Economic Costs:- 1. Economic costs combined accounting (explicit) costsand opportunity (implicit) costs.- 2. Economic costs is a broader concept than accountingcosts.
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Q1309.- List and define the three main production concepts.
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A1309.- Total Product:- Total product equals the total amount of output "Q".- Marginal Product- Marginal product equals the change in total productresulting from one unti increase in quantity of an inputemployed.- Average Product:- Average product equals the total product divided by thequantity of an input.
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Q1310.- Define: Diminishing Marginal Returns
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A1310.- Diminishing marginal returns is sometimes referred to asdiminishing marginal product.- The concept refers to the fact that marginal product of aninput typically falls as the quantity of the input increase.
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Q1311.- Define: Economies of Scale
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A1311.- Economies of scale are reductions in unit costs resultingfrom increased size of operations.
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Q1312.- Define: Diseconomies of Scale
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A1312.- Diseconomies of sale are increases in average costs ofoperations resulting from problems in managing largescale enterprises.
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Q1313.- Define: Strategic Positioning.
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A1313.- During strategic positioning, a firm will determine thebest manner to achieve organizational goals and assessthe quality practices of the organization.
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Q1314.- What is a Balanced Scorecard?
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A1314.- A balanced scorecard is a report a firm produces thathighlights the multiple dimensions of performance,customer satisfaction, and human resource use.
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Q1315.- Define: Ideal Standards
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A1315.- Ideal standards represent cost that result from perfectefficiency and effectiveness in job performance.
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Q1316.- Define: Currently Attainable Standards
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A1316.- Currently attainable standards represent costs that resultfrom work performed by employees with appropriatetraining and experience but without extraordinary effort.
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Q1317.- Define: Fexible Budget
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A1317.- A flexible budget is a budget that can be adjusted to anyactivity level. It shows how costs can vary with productionvolume.- Budgeted total costs = (variable cost per unit * activitylevel) + fixed costs- Fixed costs in total are constant over the relevant rangeof activity.
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Q1318.- Identify the direct material variances (two way varianceanalysis).
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A1318.- 1. Direct Materials price variance = (AP - SP) * AQ- where AP = actual price., SQ is standard price, AQ actualquantity purchased.- 2. Direct Materials quanity usuage variance = (AQ-SQ)*SP- where AQ is actual quantity used. SQ is actual quantityallowed. SP is standard price.
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Q1319.- When calculating the "difference" in variance anlysis,what is the formula?
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A1319.- It would be SAD if you forgot this formula:- S: Standard- A: <Actual>- D: DIFFERENCE
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Q1320.- Identify the direct labor variances (two way varianceanalysis).
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A1320.- 1. Direct Labor rate variance = (SR-AR)*AH- 2. Direct Labor efficiency variance = (SH-AH)*SR- where- AR=Actual Labor Hour- SR=Standard Labor Hour- AH=Actual Hours- SH=Standard Hours
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Q1321.- Define: Contribution by SBU
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A1321.- Contribution Margin- <Controllable Fixed Costs>- Contribution by SBU represents the difference betweenthe contribution margin (Fixed - Variable Costs) andcontrollable fixed costs (those costs that managers canimpact in less than one year).
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Q1322.- What is the purpose of the balanced scorecard?
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A1322.- The balanced score card displays performance relative tocritical success factors identified for multiple dimensionsof a business operaton.
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Q1323.- List the two alternate formulas of ROI.
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A1323.- ROI: Inc / Invest. Capital- ROI: PM* Invest. Turnover- Invest. Turnover = Sales / Assets
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Q1324.- Gross Profit Margin
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A1324.- Sales - Cost of goods sold)/Sales- Shows percentage of revenues available to coveroperating expenses and yield a profit. Higher is better.
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Q1325.- Define Benchmarking
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A1325.- Benchmarking is the process of identifying standards forcritical success factors for:- 1. Comparison to actual performance.- 2. Determination of gaps.- 3. Implementation of improvements.
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Q1326.- What are best practices?
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A1326.- Best practices represent externally determinedbenchmarks from workclass performers.
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Q1327.- Identify the costs of quality
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A1327.- appraisal costs- prevention costs- internal failure costs- external failure costs
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Q1328.- What is the formula for residual income?
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A1328.- Net book value- * Hurdle rate- REQUIRED RETURN- If amount of inc. from the inv. exceeds the computedrequired return, performance objectives have been met.
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Q1329.- What dimensions or categories of business operationsare frequently identified by the balanced scorecard?
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A1329.- F: Finance- I: Internal business Processes- C: Customer satisfaction- A: Advancement of human resource innovation
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Q1330.- List the 5 steps in theory of constraint analysis.
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A1330.- Mnemonic: IMAR- I: Identify the constraint- M: determine the profitable product Mix- F: maximize the Flow through the constraint- A: Add capacity to the constraint- R: Redesigning the manufacturing process for flexibilityand faster cycle time.
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Q1331.- List and define the types of responsibilty segments (orstrategic business units - SBUs) that are used to establishbusiness performance measures.
![Page 2662: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2662.jpg)
A1331.- Cost SBU: Managers are held responsible for controllingcosts.- Revenue SBU: Managers are held responsible forgenerating revenue.- Profit SBU: Managers are held responsible for producinga target profit.- Investment SBU: Managers are held responsible for ROI.
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Q1332.- Using the "PURE" mnemonic, identify the formulas for 2way variance anlaysis.
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A1332.- P: Price D*A- U: Usage D*S- R: Rate D*A- E: Efficiency D*S- D="Difference" (S-A)=D: "SAD"- A=Actual- S=Standard
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Q1333.- What is the formula for Cost of Goods Manufactured akaCOGM?
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A1333.- Mnemonic: BASE- B: WIP (begin)- A: + DM- A: + DL- A: + MO- S: - WIP (end)- E: COGM
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Q1334.- What are cost behavior patterns?
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A1334.- Process that allows us to predict how costs change inresponse to changes in production or sales.
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Q1335.- What is the goal in analyzing costs?
![Page 2670: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2670.jpg)
A1335.- To predict total costs and profit
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Q1336.- Very few costs behave consistently across a wide rangeof production or sales volumes. T or F
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A1336.- True
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Q1337.- Cost behavior patterns must be analyzed under thenotion of what concept?
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A1337.- Behavior can only be analyzed within a "relevant range"due to costs not behaving consistently over a wide range
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Q1338.- What is relevant range?
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A1338.- A range in production volumes where:- 1. Total fixed costs remain constant- 2. Unit Variable costs remain constant- 3. Unit sales price remain constant
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Q1339.- All costs behavior patterns are valid only within...
![Page 2678: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2678.jpg)
A1339.- A relevant range
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Q1340.- In a relevant range, total fixed costs remain constant andunit fix costs do what?
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A1340.- Vary inversely
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Q1341.- How do total variable costs behave when productionvolume changes?
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A1341.- Varies directly
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Q1342.- What two techniques are designed to support largeexpensive items, customized, special order, small lots ORlarge batch, homogeneous production?
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A1342.- Job Order & Process Costing
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Q1343.- What is Job Order Costing?
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A1343.- A costing technique that supports large expensiveheterogeneous items, customized special order, individualor small lots
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Q1344.- What is Process Costing?
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A1344.- A costing technique that supports large batches,homogeneous products
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Q1345.- In a job order cost system, where are costs accumulated?
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A1345.- In an individual WIP acct (job order cost sheet)
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Q1346.- What is done with the total for individual WIP accts underthe job order cost system?
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A1346.- The totals are transferred to the WIP control acct
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Q1347.- What's the process of a job order cost system?
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A1347.- 1. Accumulate costs in an individual WIP acct at theactual costs.- 2. Transfer the total from the individual WIP acct to theWIP ctrl acct.- 3. Apply FO. Charge to WIP ctl and FOA at the std costs.- 4. In over or under amounts in WIP is decreased from orcharged to CGS.- 5. Costs flow from FG to CGS.
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Q1348.- What is the acronym utilizing the job order cost system?
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A1348.- A Accumulate costs- T Transfer total- A Apply FO- C Costs flow
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Q1349.- What's the main issue in process costing?
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A1349.- Since costs of goods are not individually tracked, theproblem lies in determining how many units were productsfor the period and assigning a cost to them.
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Q1350.- JIT is a pull or push production process?
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A1350.- Pull
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Q1351.- The production schedule of the traditional "push"production is based on budgeted or actual sales?
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A1351.- Budgeted
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Q1352.- The production schedule of the "pull" production isbased on budgeted or actual sales?
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A1352.- Actual
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Q1353.- In a JIT system, as customer orders are received...
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A1353.- Goods are scheduled for production
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Q1354.- In a JIT system, later steps pull production through...
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A1354.- the later steps
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Q1355.- In a well managed JIT system, all inventories will be...
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A1355.- Eliminated
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Q1356.- Name the characteristics that must be present in order fora JIT inventory system to function properly.
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A1356.- 1. Many small orders- 2. Timely delivery- 3. Negotiate long contracts w/sm # of suppliers- 4. Raw materials always high quality- 5. Inspection of goods reduced- 6. Order & Pmt Processing costs reduced
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Q1357.- JIT production environments are characterized by:
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A1357.- 1. Set up quickly- 2. Skilled workforce that can perform multiple tasks- 3. Very low rate of defects
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Q1358.- What is backflush costing?
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A1358.- A product costing approach that delays costs until goodsare completed or sold.- Costs are not tracked from raw mat to FG/CGS becausetheoretically, in a JIT system, inventory is eliminated.
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Q1359.- What does transfer pricing mean?
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A1359.- The prices of goods transferred between organizationaldepartments.
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Q1360.- Transfer prices are determined by one of three methods.What are the methods?
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A1360.- Market Price- Cost-based Price- Negotiated Price
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Q1361.- What is Suboptimization?
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A1361.- When departmental managers seek to optimize theirindividual best interest rather than the interest of theorganization as a whole.
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Q1362.- What is Goal Incongruence?
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A1362.- When actions encouraged by the reward structure of thedept conflict with the goals of other depts or theorganization as a whole.
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Q1363.- What is Goal Congruence?
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A1363.- When the department and division managers makedecisions that are consistent with the goals and objectivesof the organization as a whole.
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Q1364.- What helps to ensure goal congruence?
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A1364.- The Transfer Pricing Rule
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Q1365.- What is the transfer pricing rule (formula)?
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A1365.- Transfer Price =- Add'l Outlay Cost per unit + Opp Cost per unit
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Q1366.- What are additional outlay costs?
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A1366.- VARIABLE Production Costs + Additional Costs to sellincurred by the selling unit- Variable Prod'n costs - DM, DL, Var FO- Other costs - storage, transportation, S&A
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Q1367.- In reference to transfer pricing, define opportunity costs.
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A1367.- The benefit foregone due to selling internally.
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Q1368.- In transfer pricing, opportunity cost only exists when...
![Page 2736: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2736.jpg)
A1368.- The selling unit is producing and selling at full capacity.
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Q1369.- What is full capacity?
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A1369.- Producing AND Selling at full capacity
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Q1370.- What is the Opportunity Cost per Unit (OCU) formula =?
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A1370.- OCU = SPU – AOU- SPU = Selling Price per unit- AOU = Add'l Outlay Cost per unit
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Q1371.- What is another definition of opportunity cost?
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A1371.- Sales given up less the add'l outlay cost to produce it
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Q1372.- When the selling unit is operating at full capacity and cansell all that it produces, what should the transfer price be?
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A1372.- Market Price
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Q1373.- What is the theoretical transfer price?
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A1373.- Market Price
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Q1374.- What should the transfer price be when the selling unithas EXCESS production capacity?
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A1374.- Additional Outlay Cost per Unit.
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Q1375.- When negotiating transfer prices among divisions, thebuying division's maximum price is?
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A1375.- The min price on the open market.
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Q1376.- When negotiating transfer prices among divisions, theselling division's minimum price will be?
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A1376.- 1) Its direct costs if it has excess capacity or- 2) Its market price if no excess capacity
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Q1377.- What are transfer prices based on when using cost-basedpricing?
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A1377.- Production Costs
![Page 2755: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2755.jpg)
Q1378.- What are the three variations of cost-based pricing whendetermining transfer prices?
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A1378.- Variable Cost Pricing- Full Cost Pricing (absorption)- Cost - Plus Pricing
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Q1379.- How is the transfer price determined when using thevariable cost pricing method?
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A1379.- The price is the cost to produce and sell the item to thepurchasing division.- DM, DL, VFO, FS&A
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Q1380.- Under the variable cost pricing method for determiningtransfer prices, should standard or actual costs be used?
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A1380.- Standard
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Q1381.- Using standard costs provides an incentive for thepurchasing or selling division?
![Page 2762: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2762.jpg)
A1381.- Purchasing
![Page 2763: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2763.jpg)
Q1382.- How are transfer prices determined when using the fullcost pricing method?
![Page 2764: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2764.jpg)
A1382.- By allocating an amount of fixed cost from the sellingdivision to the variable cost of production.
![Page 2765: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2765.jpg)
Q1383.- Why is the full cost method for determining transferprices problematic for the organization as a whole?
![Page 2766: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2766.jpg)
A1383.- Because the fixed costs become variable costs to thepurchasing division and will understate profitability whenthese costs are used in earnings analyses.
![Page 2767: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2767.jpg)
Q1384.- How are transfer prices determined when using the costplus pricing method?
![Page 2768: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2768.jpg)
A1384.- Transfer prices are based on the selling divisions add'lcosts per unit plus a fixed dollar amount or percentage ofthe cost.
![Page 2769: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2769.jpg)
Q1385.- Under transfer pricing, cost plus pricing have the sameadvantages and disadvantages as what other cost basedmethod?
![Page 2770: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2770.jpg)
A1385.- Full Cost Pricing
![Page 2771: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2771.jpg)
Q1386.- Under transfer pricing, what does dual pricing mean?
![Page 2772: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2772.jpg)
A1386.- Gives both the buying and selling division the price that"works best" for them.
![Page 2773: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2773.jpg)
Q1387.- Under dual pricing, what is the transfer price based on forthe selling and purchasing division?
![Page 2774: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2774.jpg)
A1387.- Selling Div - Transfers out at Market Price- Purchasing Div - Transfers in at Std Variable Costs
![Page 2775: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2775.jpg)
Q1388.- What happens when both the buying and selling divisionsreceive prices that enhance both their profitability?
![Page 2776: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2776.jpg)
A1388.- The value of pricing as an incentive for divisions tocontrol cost is lost
![Page 2777: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2777.jpg)
Q1389.- Transfer pricing is a useful tool in promoting what?
![Page 2778: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2778.jpg)
A1389.- Goal Congruence
![Page 2779: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2779.jpg)
Q1390.- How is transfer pricing useful in the internationalenvironment?
![Page 2780: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2780.jpg)
A1390.- It can reduce tax liability.- Relating to taxes and import duties when bring productsacross state or international lines.
![Page 2781: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2781.jpg)
Q1391.- Why is transfer pricing problematic in decentralizedorganizations?
![Page 2782: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2782.jpg)
A1391.- Managers of the buying and selling division tend to seekto maximize their own departmental revenues andminimize their own departmental costs.
![Page 2783: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2783.jpg)
Q1392.- When can the selling unit use cost based pricing?
![Page 2784: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2784.jpg)
A1392.- When the selling unit has excess capacity
![Page 2785: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2785.jpg)
Q1393.- Word of Advice
![Page 2786: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2786.jpg)
A1393.- Decisions involving relevant costs are tested lightly onthe exam - usually a single question about one of the fourtypes of decisions per exam.- This is, however, one of the few areas in Planning &Measurement for which questions tend to becomputational rather than conceptual.
![Page 2787: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2787.jpg)
Q1394.- What are relevant costs and benefits, in general?
![Page 2788: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2788.jpg)
A1394.- Costs and benefits that must be identified in makingcertain production decisions.
![Page 2789: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2789.jpg)
Q1395.- What are relevant costs and benefits more specifically?
![Page 2790: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2790.jpg)
A1395.- All future COSTS and BENEFITS that DIFFER amongalternatives.
![Page 2791: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2791.jpg)
Q1396.- What is another name for relevant costs and benefits?
![Page 2792: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2792.jpg)
A1396.- Relevant Factors
![Page 2793: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2793.jpg)
Q1397.- What are the four categories of production decisions thatfocus on identifying relevant costs?
![Page 2794: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2794.jpg)
A1397.- Please Keep My Angels- Process Further or Sell Now- Keep or Drop- Make or Buy- Accept or Reject
![Page 2795: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2795.jpg)
Q1398.- What are the two types of relevant factors?
![Page 2796: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2796.jpg)
A1398.- Avoidable Costs (costs)- Opportunity Costs (benefits)
![Page 2797: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2797.jpg)
Q1399.- What are avoidable costs?
![Page 2798: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2798.jpg)
A1399.- Costs that can be eliminated by choosing one alternativeover another.
![Page 2799: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2799.jpg)
Q1400.- What are opportunity costs?
![Page 2800: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2800.jpg)
A1400.- Benefits forgone when the selection of one course ofaction prevents another course of action.
![Page 2801: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2801.jpg)
Q1401.- What are the two general categories of unavoidable orirrelevant costs?
![Page 2802: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2802.jpg)
A1401.- Sunk Costs- Future costs and benefits that DO NOT DIFFER amongalternatives
![Page 2803: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2803.jpg)
Q1402.- What are sunk costs?
![Page 2804: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2804.jpg)
A1402.- Costs that have already occurred and cannot be changed.
![Page 2805: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2805.jpg)
Q1403.- Give examples of the unavoidable future costs andbenefits that will not differ among alternatives.
![Page 2806: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2806.jpg)
A1403.- Fixed or allocated costs
![Page 2807: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2807.jpg)
Q1404.- When making decisions to process further or sell now,what type of products does this usually involve?
![Page 2808: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2808.jpg)
A1404.- Joint products, but not always
![Page 2809: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2809.jpg)
Q1405.- What are two important things to note about the jointproduct environment?
![Page 2810: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2810.jpg)
A1405.- 1. Products are not separately identifiable until after thesplit-off point.- 2. The costs incurred up to the split-off point cannot beseparated or avoided.
![Page 2811: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2811.jpg)
Q1406.- What is the basic concept behind quality management?
![Page 2812: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2812.jpg)
A1406.- Customer Satisfaction
![Page 2813: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2813.jpg)
Q1407.- What are the three most common measures of customersatisfaction in regards to total quality management?
![Page 2814: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2814.jpg)
A1407.- sales returns- warranty costs- customer complaints
![Page 2815: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2815.jpg)
Q1408.- Give examples of measures that are NOT measures ofcustomer satisfaction.
![Page 2816: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2816.jpg)
A1408.- time required to product the product, design costs,testing costs
![Page 2817: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2817.jpg)
Q1409.- What is the definition of "Quality?"
![Page 2818: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2818.jpg)
A1409.- How well an item meets its DESIGN specifications
![Page 2819: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2819.jpg)
Q1410.- What is the term for the DEGREE to which an item meetsits design specifications and or customer expectations?
![Page 2820: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2820.jpg)
A1410.- Quality of Conformance
![Page 2821: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2821.jpg)
Q1411.- Define the term for the costs incurred by an organizationto ensure a high quality of performance.
![Page 2822: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2822.jpg)
A1411.- Costs of Quality
![Page 2823: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2823.jpg)
Q1412.- What are the four costs of quality?
![Page 2824: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2824.jpg)
A1412.- Prevention, appraisal, internal failure, external failure
![Page 2825: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2825.jpg)
Q1413.- What is strategic management?
![Page 2826: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2826.jpg)
A1413.- The process of formulating organizational goals andobjectives, developing tactics to achieve these goals, anddesigning performance measures to evaluate whether thegoals and objectives are being met.
![Page 2827: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2827.jpg)
Q1414.- What does the overall organizational strategy define?
![Page 2828: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2828.jpg)
A1414.- How the organization competes in the marketplace.
![Page 2829: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2829.jpg)
Q1415.- Name one model that has been developed to helpformulate an organization's strategy?
![Page 2830: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2830.jpg)
A1415.- "Porter's Five Forces" developed by Michael Porter
![Page 2831: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2831.jpg)
Q1416.- What does Porter's Five Forces evaluate in regards tostrategic management?
![Page 2832: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2832.jpg)
A1416.- It measures the organization's competitive intensitybased on five dimensions.
![Page 2833: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2833.jpg)
Q1417.- HOW does Porter's Five Forces measure competitiveintensity?
![Page 2834: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2834.jpg)
A1417.- Based on five dimensions of:- Bargaining power of customers- Bargaining power of suppliers- Threat of new entrants- Threat of substitute products- Intensity of competition- bargaining power of suppliers
![Page 2835: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2835.jpg)
Q1418.- Name two generic strategies from Porter's model forcompetition in broad (national & international) arenas.
![Page 2836: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2836.jpg)
A1418.- Product differentiation, Cost leadership
![Page 2837: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2837.jpg)
Q1419.- Define the third strategy under Porter's model, stemmingfrom segmenting the market.
![Page 2838: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2838.jpg)
A1419.- Focus strategy, niche marketing
![Page 2839: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2839.jpg)
Q1420.- Competition in market SEGMENTS can be based on whattwo strategies?
![Page 2840: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2840.jpg)
A1420.- Low cost (cost focus) or product differentiation (focuseddifferentiation)
![Page 2841: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2841.jpg)
Q1421.- What is responsibility accounting?
![Page 2842: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2842.jpg)
A1421.- Measurement of management performance based onwhat they can control.
![Page 2843: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2843.jpg)
Q1422.- In DECENTRALIZED organizations, management controlis ususally established by...
![Page 2844: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2844.jpg)
A1422.- Dividing the organization into segments, responsibilitycenters.
![Page 2845: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2845.jpg)
Q1423.- Name four types of responsibility centers.
![Page 2846: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2846.jpg)
A1423.- Cost center- Revenue center- Profit center- Investment center
![Page 2847: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2847.jpg)
Q1424.- What is a cost center?
![Page 2848: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2848.jpg)
A1424.- Segment of organization where NO REVENUE isgenerated & the manager is only responsible for costs.
![Page 2849: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2849.jpg)
Q1425.- Give examples of cost centers.
![Page 2850: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2850.jpg)
A1425.- Service (custodial), staff (personnel), and productioncenters.
![Page 2851: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2851.jpg)
Q1426.- What is a Revenue center?
![Page 2852: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2852.jpg)
A1426.- Organizational unit whose manager is responsible onlyfor REVENUES.
![Page 2853: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2853.jpg)
Q1427.- Give examples of revenue centers.
![Page 2854: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2854.jpg)
A1427.- Sales and Marketing depts
![Page 2855: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2855.jpg)
Q1428.- What is a Profit center?
![Page 2856: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2856.jpg)
A1428.- Organizational unit whose manager is responsible forREVENUES and COSTS.
![Page 2857: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2857.jpg)
Q1429.- Give examples of profit centers.
![Page 2858: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2858.jpg)
A1429.- Stores or product lines
![Page 2859: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2859.jpg)
Q1430.- What is an investment center?
![Page 2860: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2860.jpg)
A1430.- An organizational unit whose manager is responsible forreturn on investments (revenues, costs, & profit)...the sizeof the profit in relation to the investment.
![Page 2861: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2861.jpg)
Q1431.- What is responsibility accounting in terms of theaccounting field?
![Page 2862: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2862.jpg)
A1431.- The accounting procedures and reports used to measurethe performance of responsibility centers.
![Page 2863: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2863.jpg)
Q1432.- Management uses responsibility accounting to support...
![Page 2864: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2864.jpg)
A1432.- Goal Congruence
![Page 2865: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2865.jpg)
Q1433.- What is goal congruence?
![Page 2866: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2866.jpg)
A1433.- When the goals of individual segments/departments meetthe goals of the entire organization
![Page 2867: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2867.jpg)
Q1434.- A fundamental concept of responsibility accounting is...
![Page 2868: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2868.jpg)
A1434.- Controllability...managers should only be responsible forwhat they can control.
![Page 2869: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2869.jpg)
Q1435.- Most managers should not be held responsible for whichcosts?
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A1435.- Depreciation and Insurance exp
![Page 2871: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2871.jpg)
Q1436.- What is the definition of Business Information Systems(BIS)?
![Page 2872: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2872.jpg)
A1436.- DEFINITION is any combination of people, procedures,and computing equipment employed to pursue anorganizational objective. STAKEHOLDERS - get outputfrom system. (can be outside organization)
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Q1437.- The Four Major Tasks of any Information System is?
![Page 2874: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2874.jpg)
A1437.- The 4 elements are:- a. Input- b. Transformation- c. Output- d. Storage
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Q1438.- What is the definition of a Transaction Processing System(TPS)?
![Page 2876: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2876.jpg)
A1438.- DEFINITION is it captures the fundamental data thatreflect the economic life of an organization.
![Page 2877: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2877.jpg)
Q1439.- What is the definition of a Management InformationSystem (MIS)?
![Page 2878: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2878.jpg)
A1439.- DEFINITION is it typically receives information from aTPS, aggregates it, then reports it in a format useful tomiddle management in running the business.
![Page 2879: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2879.jpg)
Q1440.- What is a Data Warehouse?
![Page 2880: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2880.jpg)
A1440.- DEFINITION is it is a central database for transaction-level data from more than one of the organization's TPSs.- The ability of the data warehouse to relate data frommultiple systems makes it a very powerful tool for ad hocqueries.
![Page 2881: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2881.jpg)
Q1441.- What is a Data mart?
![Page 2882: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2882.jpg)
A1441.- DEFINITION is it is a subset of an enterprise-wide datawarehouse.
![Page 2883: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2883.jpg)
Q1442.- Data Mining - What is it?- What enables it?
![Page 2884: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2884.jpg)
A1442.- DEFINITION is it is the search for unexpectedrelationships between data.- It is enabled by a Data Warehouse.
![Page 2885: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2885.jpg)
Q1443.- What is a Decision Support System (DSS)?
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A1443.- DEFINITION is it is an interactive system that is useful insolving structured and semi-structured problems, that is,those requiring a management decision maker to exercisehis or her insight and judgment.
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Q1444.- Does a DSS automate a decision?
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A1444.- No.
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Q1445.- What is an Expert System (ES)?
![Page 2890: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2890.jpg)
A1445.- DEFINITION is it is an interactive system that attempts toimitate the reasoning of a human expert in a given field.- It is useful for addressing unstructured problems whenthere is a local shortage of human experts.
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Q1446.- What is Artificial Intelligence (AI)?
![Page 2892: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2892.jpg)
A1446.- DEFINITION is it attempts to imitate human decisionmaking, which hinges on a combination of knowledge andintuition.- It is more sophisticated than (ES).- It is designed to perceive, reason, and understand.
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Q1447.- What is Business Intelligence (BI)?
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A1447.- DEFINITION is it is what gives upper management theinformation it needs to know where the organization is andhow to steer it in the intended direction.- It gives an executive immediate information about anorganization's critical success factors.
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Q1448.- What is Enterprise Resource Planning (ERP)?
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A1448.- DEFINITION is it is the latest phase in the development ofcomputerized systems for managing organizationresources.- It is intended to integrate IS's all over the organization bycreating one database linked to all of an organization'sapplications.
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Q1449.- What is Office Automation Systems (OASs)
![Page 2898: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2898.jpg)
A1449.- DEFINITION is it is the word processing, spreadsheet,digital document storage, and desktop publishingapplications familiar to most office workers, that are part ofany organization's IS environment.
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Q1450.- Does it matter for a BIS if it is manual or computer-based?
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A1450.- The goals of BIS are the same. The risks are different.
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Q1451.- List typical IT Personnel titles
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A1451.- a. DBA- b. Network Tech- c. Webmaster- d. Computer Operators- e. Librarians- f. System Programmers- g. Application Programmers- h. Help Desk
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Q1452.- What is the most common method for building new IS?
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A1452.- SDLC Approach.
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Q1453.- What is Systems Development Life-Cycle (SDLC)?
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A1453.- DEFINTION is it is highly structured and if properlyfollowed it can be helping an organization deploymaintainable, well-documented systems with thefunctionality that was intended.
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Q1454.- What are the SDLC Steps?
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A1454.- Steps are:- a. Project Definition Phase- b. Feasibility Study- c. Cost Benefit Analysis- d. Project initiation Phase- e. Systems Analysis- f. Systems Design- g. Physical Database Design- h. Program Development- i. Procedure Development- j. Installation & Operation- k. System Maintenance
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Q1455.- What functions need to be segregated with IT?
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A1455.- List includes:- a. Information Security- b. Systems Development and Maintenance- c. Computer Operations- d. Data Administration- e. End Users
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Q1456.- What function does an IT Security Officer perform?
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A1456.- Function performed is:- Responsible for formulation and enforcing a formal ISpolicy for all employees and outside parties who accessthe organization's systems.
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Q1457.- What is the purpose of Systems Development andMaintenance?
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A1457.- The purpose is due to the users of an organizationrequesting new systems created & changes andenhancements to existing systems.
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Q1458.- What is the function of Computer Operations?
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A1458.- The function is for the smooth running of medium &large-scale computers.- ex) Job scheduling and out production
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Q1459.- What is the function of Data Administration?
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A1459.- The function is the determination of how theorganization's data should be stores and whatrelationships about the data best achieve theorganization's business objectives.
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Q1460.- What is the purpose of a DBA?
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A1460.- Purpose is to keep the databases running efficiently
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Q1461.- Who or what function is an end user?
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A1461.- Function:- Data BELONGS to their department.
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Q1462.- What is INPUT
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A1462.- DEFINITION is that the system must acquire (capture)data from within or outside of the entity.
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Q1463.- What is TRANSFORMATION
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A1463.- DEFINITION is that raw materials (data) are converted intoknowledge useful for decision making (information).
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Q1464.- What is OUTPUT
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A1464.- DEFINITION is that the ultimate purpose of the system iscommunication for results to internal or external users.
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Q1465.- What is STORAGE
![Page 2930: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2930.jpg)
A1465.- DEFINITION is that before, during, and after processing,data must be temporarily or permanently stored in files ordatabases.
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Q1466.- What is a TRANSACTION?
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A1466.- DEFINITION is it is a single, discrete event that can becaptured by an information system.
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Q1467.- MIS are often classified by function or activity. What arecommon activities?
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A1467.- 1. Accounting- 2. Finance- 3. Manufacturing- 4. Logistics- 5. Marketing- 6. Human Resources
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Q1468.- For function ACCOUNTING, what are the activities?
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A1468.- Activities for function are:- General Ledger- Accounts Receivable- Accounts Payable- Fixed Assets Management- Tax Accounting
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Q1469.- For function FINANCE, what are the activities?
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A1469.- Activities for function are:- Capital budgeting- Operational budgeting- Cash Management
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Q1470.- For function MANUFACTURING, what are the activities?
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A1470.- Activities for function are:- Production Planning- Cost Control- Quality Control
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Q1471.- For function LOGISTICS, what are the activities?
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A1471.- Activities for the function are:- Inventory Management- Transportation Planning
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Q1472.- For function MARKETING, what are the activities?
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A1472.- Activities for the function are:- Sales Analysis- Forecasting
![Page 2945: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2945.jpg)
Q1473.- For function HR, what are the activities?
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A1473.- Activities for the function are:- Projecting payroll- Projecting benefits obligations- Employment-level planning- Employee Evaluation tracking
![Page 2947: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2947.jpg)
Q1474.- What is a STOVEPIPE SYSTEM?
![Page 2948: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2948.jpg)
A1474.- DEFINITION is it is a single-focus system like most MISthat are classified by function or activity.
![Page 2949: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2949.jpg)
Q1475.- What is an INTEGRATED SYSTEM?
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A1475.- DEFINTION is it links multiple business activities acrossthe enterprise.
![Page 2951: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2951.jpg)
Q1476.- What do data warehouses require?
![Page 2952: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2952.jpg)
A1476.- THEY require transaction records be converted to astandard format. They are very large repositories.
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Q1477.- What is ONLINE ANALYTICAL PROCESSING (OLAP)?
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A1477.- It is when data warehouses are accessed using analyticaland graphics tools.
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Q1478.- What is an important component of OLAP?
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A1478.- Component is drill down analysis.
![Page 2957: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2957.jpg)
Q1479.- What is DRILL DOWN ANALYSIS?
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A1479.- DEFINITION is when the user is first presented with thedata at an aggregate level and then can display successivelevels of detail for a given date, region, product, etc. untilfinally reaching the original transactions.
![Page 2959: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2959.jpg)
Q1480.- What a QUERY-AND-REPORTING-SYSTEM?
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A1480.- A data warehouse.- It gets input from various TPS.- However, it does not carry on the operations of theenterprise.- DW's are optimized for retrieval and reporting. TPS is fordata entry.
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Q1481.- What are 3 components of the DSS?
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A1481.- Components are:- Database- Model- Dialog
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Q1482.- What is a DATABASE?
![Page 2964: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2964.jpg)
A1482.- DEFINITION, it consists of raw data that are relevant todecisions.- Can come from inside or outside organization.
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Q1483.- What is a MODEL?
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A1483.- DEFINITION, it is the set of equations, comparisons,graphs, conditions, assumptions into which the data willbe fed.
![Page 2967: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2967.jpg)
Q1484.- What is a DIALOG?
![Page 2968: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/2968.jpg)
A1484.- DEFINITION, it consists of the user interface which allowsthe user to specify the particular set of data to which themodel should be applied.
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Q1485.- What is a GROUP DSS?
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A1485.- DEFINITION, it aids in the collaborative solution ofunstructured problems. Users in separate areas of theorganization can specify parameters pertinent to theirfunctions.
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Q1486.- What are the components of an Expert System?
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A1486.- Components are:- Knowledge database- Inference engine- Dialog
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Q1487.- What is an ES KNOWLEDGE DATABASE?
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A1487.- DEFINITION, It consists of facts and the relationshipsamong those facts.
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Q1488.- What is an ES INFERENCE ENGINE?
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A1488.- DEFINITION, It is often a series of if/then decisions.
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Q1489.- What is an ES DIALOG?
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A1489.- DEFINITION, It allows the user to input data relevant tothe current problem which are then filtered through theinference engine and used to query the knowledgedatabase.- Optimal solution is suggested to the user - output.
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Q1490.- What are inference procedures based on?
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A1490.- The procedures are symbolic processing based onheuristics rather than algorithms.
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Q1491.- What is a HEURISTIC PROCEDURE?
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A1491.- DEFINITION, it is based on exploratory problem-solvingtechnique that uses self-education methods (feedbackevaluation) to improve performance.- Systems are interactive and provide explanations of theirproblem-solving behavior.
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Q1492.- What are FUZZY LOGIC SYSTEMS?
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A1492.- DEFINITION, is a form of AI that deals with imprecise dataand problems with multiple solutions.
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Q1493.- When are fuzzy logic systems useful?
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A1493.- They are useful in the design of industrial controls.
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Q1494.- What does fuzzy logic use?
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A1494.- It can use linguistic system variables rather than binarydecisions.
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Q1495.- What is fuzzy set theory?
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A1495.- It allows object to belong partly to multiple sets.- It is useful for the vagueness of real world items wherethey belong to a set only to a degree.
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Q1496.- What do fuzzy rule based systems apply?
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A1496.- They apply methods to solve real-world problems where asystem is difficult to model and controlled by a humanoperator and ambiguity is common.
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Q1497.- Benefits of Fuzzy Logic Systems?
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A1497.- They are:- 1. Simplified, reduced development cycle.- 2. Ease of Implementation.- 3. User-friendly, efficient performance.
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Q1498.- What are NEURAL NETWORKS?
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A1498.- DEFINITION, A collection of processing elements workingtogether to process information much like the humanbrain, including learning from previous situations andgeneralizing concepts.
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Q1499.- What are CASE-BASED REASONING SYSTEMS?
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A1499.- DEFINITION, use a process similar to that used byhumans to learn from previous, similar situations.
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Q1500.- What are RULE-BASED EXPERT SYSTEMS?
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A1500.- DEFINITION, function on the basis of set rules to arrive atan answer.- Cannot be changed by the system itself and must bechanged by an outside source aka programmer.
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Q1501.- What are INTELLIGENT AGENTS?
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A1501.- DEFINITION, programs that apply a built-in or learnedknowledge base to execute a specific, repetitive, andpredictable task.
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Q1502.- What is the purpose of BI - Business Intelligence?
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A1502.- It gives executives immediate information about criticalsuccess factors for the organization.
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Q1503.- What is a DIGITAL DASHBOARD?
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A1503.- DEFINITION, it can be displays of bar charts, graphs,other formats etc. grouped by a particular executive'sneeds.
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Q1504.- Traditional ERP system does what?
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A1504.- Subsystems share data and coordinate their activities.- These are BACK OFFICE functions (aka Internal to theorganization).- Comprehensively, this includes materials requirementplanning, manufacturing resource planning, supply chainmgt, and customer relationship mgt.
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Q1505.- What is ERP II?
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A1505.- DEFINITION, Current generation has added front officefunction to connect organization with customers,suppliers, owners, creditors, etc..- Allows for supply chain mgt, customer relationship mgt,and partner relationship mgt.
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Q1506.- What is the major disadvantage of an ERP?
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A1506.- It is complex and extensive so it is costly and difficult toimplement.- Only largest organizations can.
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Q1507.- What is Information Resource Management?
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A1507.- DEFINITION, includes the mgt of all the forms of IS (WP,Spreadsheet, digital docs, desktop publishing) and needsof users for the information holdings of the organization.(OAS)s
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Q1508.- What is the purpose of Financial Reporting systems?
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A1508.- 1. Generate information for external users (investors,regulators, creditors).- 2. Form of Financial Statements.- 3. Backward looking at historical data.
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Q1509.- General Steps of the Accounting Cycle - included in theaudit trail!
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A1509.- Cycle includes:- 1. Entry of source data and file documents (can beelectronic)- 2. Make entries in general and special journals.- 3. Post entry to GL and subsidiary ledgers accounts.- 4. Prepare Trial Balance- 5. Prepare Financial Statements for external reporting.
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Q1510.- What is the purpose of Management Reporting systems?
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A1510.- Purpose is:- 1. Internal focus on planning, control, and decisionmaking.- 2. Forward looking - forecasting.- 3. Internal uses (no need for GAAP)- 4. Nonfinancial and financial data in flexible formats.- 5. Major element = cost accounting and budgeting.
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Q1511.- BIS risks - please list?
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A1511.- Include:- 1. System availability- 2. Volatile transaction trails.- 3. Decreased human involvement.- 4. Uniform processing of transactions,- 5. Unauthorized access.- 6. Data Vulnerability- 7. Reduced segregation of duties.- 8. Reduced individual authorization of transactions.- 9. Specialized knowledge.
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Q1512.- What is a patch?
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A1512.- A patch is a chg or modification to an existing programthat may or may not be authorized.
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Q1513.- What is a Job Control Language(JCL)?
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A1513.- A JCL is a language that prioritized & controls whenapplication programs are initiated.
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Q1514.- What does virtual storage do?
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A1514.- The operation system divides a program intopgs/segments and brings only the pgs of the programrequired for execution into memory. Saves time & moneyas unneeded portions of the program remain in less expsecondary storage.
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Q1515.- What is a Enterprise Resource Planning system?
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A1515.- “Enterprise resource planning (ERP) is an enterprise-wideinformation system designed to coordinate all theresources, information, and activities needed to completebusiness processes such as order fulfillment or billing.- An ERP system supports most of the business systemthat maintains - in a single database - the data needed for avariety of business functions such as manufacturing,supply chain management, financials, projects, humanresources and customer relationship management.
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Q1516.- What is a LAN
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A1516.- Local Area Network-private computer network within asingle building or relatively small geographic area.
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Q1517.- Disaster Recovery & Business Continuation Plan
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A1517.- A Disaster Recovery & Business Continuation Planshould allow the firm to (A) Minimize the extent ofdisruption, damage and loss, (C) Resume normaloperations as quickly as possible, (D) train and familiarizepersonnel to perform emergency operations as well asestablish an alternate (temporary) method for processinginformation.
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Q1518.- Disaster Recovery & Business Continuity Plans include:
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A1518.- priorities, insurance, backup approach, specificassignments, period testing and updating anddocumentation.
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Q1519.- Two general types of computer processing systems are:
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A1519.- Transaction processing and management reporting
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Q1520.- Mgmt Info Sys(MIS) are:
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A1520.- designed to provide information for planning organizingand controlling the operations of the business.
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Q1521.- Decision Support Systems are:
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A1521.- designed to combine data and models, not resolveproblems.
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Q1522.- Expert systems:
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A1522.- apply specific models to data to provide a specific type ofrecommendation.
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Q1523.- What is the main difference between transactionprocessing and management reporting systems?
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A1523.- Transaction processing systems generally process alarge volume of transactions where management reportingsystems provide information used to support businessdecisions.
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Q1524.- Methods to control access to appropriate users include:
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A1524.- passwords and user IDs, menus for EUC accessdatabases, independent review of transactions, restrictinguser ability to load data, requirement of appropriatevalidation, authorization and reporting control when theend user uploads data and record access to companydatabases by the EUC application.
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Q1525.- Forms of physical access controls include:
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A1525.- Clamps or chains to prevent removal of hard disks orinternal boards, regular backup and control over accessfrom outside are all
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Q1526.- Risks associated w/ End User Computing(EUC) include:
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A1526.- Management often does not review the results ofapplications appropriately- More client personnel need to understand controlconcepts- End-User applications are not always adequately testedbefore being implemented .
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Q1527.- Procedures to control the small computer issue ofsoftware piracy are:
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A1527.- Establishing a corporate software policy, maintaining alog of all software purchases and auditing individualcomputers to identify installed software.
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Q1528.- What are some security consideration for smallcomputers?
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A1528.- Verification of applications being processed should bemade to prevent the system from being used for personalprojects.- Security over data and in-house developed software isimportant as most companies can easily replace hardwarebut may suffer a severe setback if the data and/or in-housedeveloped software is lost.- Purchases of hardware & software should be reviewed forcompatibility, piracy & other issues.
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Q1529.- Control implications require that:
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A1529.- Applications be adequately tested before use, backup offiles, control access to appropriate users, adequatedocumentation, & application controls & are all examplesof control implications.
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Q1530.- AICPA's Trust Services provide:
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A1530.- assurance on information systems & present oneframework for analyzing a reliable system.
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Q1531.- Physical access controls:
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A1531.- Prevent damage or other loss including theft, acts of war,weather, disgruntled employees or others.
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Q1532.- The seven factors of the control environment are:
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A1532.- Integrity and ethical values- Commitment to competence- Human resource policies and practices- Assignment of authority and responsibility- Management's philosophy and operating style- Board of director's or audit committee participation- Organization
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Q1533.- The systems analyst:
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A1533.- Analyzes the user environment & requirements & mayrecommend changes to the current system, the purchaseof a new system or design a new system.
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Q1534.- A systems flowchart:
![Page 3068: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3068.jpg)
A1534.- A tool or diagram used by the systems analyst to definesystem requirements.
![Page 3069: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3069.jpg)
Q1535.- The systems analyst is responsible for:
![Page 3070: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3070.jpg)
A1535.- ensuring programming and that end user needs are met.
![Page 3071: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3071.jpg)
Q1536.- Systems Programmer:
![Page 3072: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3072.jpg)
A1536.- is responsible for implementing, debugging andmodifying software.- E.g. include to the operating systems,telecommunications monitoring & database managementsystems.
![Page 3073: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3073.jpg)
Q1537.- The Applications Programmer:
![Page 3074: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3074.jpg)
A1537.- is responsible for writing testing & debuggingapplications software. These specifications are usuallyprovided by the Systems Analyst.
![Page 3075: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3075.jpg)
Q1538.- Program flowchart:
![Page 3076: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3076.jpg)
A1538.- is a tool or diagram used by the Applications Programmerto document program logic.
![Page 3077: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3077.jpg)
Q1539.- Database Administrator (DBA):
![Page 3078: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3078.jpg)
A1539.- is responsible for maintaining the database andrestricting access to the database to authorized users only.
![Page 3079: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3079.jpg)
Q1540.- The Operator:
![Page 3080: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3080.jpg)
A1540.- is responsible for the daily computer operations of boththe hardware and software.- The Operator mounts tapes, supervises operations on aconsole, accepts inputs and distributes outputs.- The Operator should have documentation available to runprograms but is not responsible for detailed programinformation.
![Page 3081: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3081.jpg)
Q1541.- The Librarian:
![Page 3082: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3082.jpg)
A1541.- is responsible for custody of the removable media (e.g.magnetic tape, disks) and for the maintenance of programand systems documentation.- Many of these services have been automated.
![Page 3083: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3083.jpg)
Q1542.- The Web Administrator/Web Manager:
![Page 3084: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3084.jpg)
A1542.- is responsible of overseeing the development, planningand the implementation of a website. This is generally amanagement position.
![Page 3085: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3085.jpg)
Q1543.- The Web Master:
![Page 3086: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3086.jpg)
A1543.- is responsible for providing expertise and leadership inthe development of a website, including but not limited todesign, analysis, security, maintenance, contentdevelopment and updates.
![Page 3087: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3087.jpg)
Q1544.- The Web Designer:
![Page 3088: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3088.jpg)
A1544.- is responsible for creating the visual content of thewebsite.
![Page 3089: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3089.jpg)
Q1545.- The Web Coordinator:
![Page 3090: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3090.jpg)
A1545.- is responsible for the daily operations of the website.
![Page 3091: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3091.jpg)
Q1546.- The Internet Developer:
![Page 3092: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3092.jpg)
A1546.- is responsible for writing programs for commercial use.Similar to a software engineer or a systems programmer.
![Page 3093: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3093.jpg)
Q1547.- The Intranet/Extranet Developer:
![Page 3094: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3094.jpg)
A1547.- is responsible for writing programs based on the needs ofthe company.
![Page 3095: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3095.jpg)
Q1548.- Control activities categories:
![Page 3096: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3096.jpg)
A1548.- general- application- user
![Page 3097: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3097.jpg)
Q1549.- General system control activities:
![Page 3098: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3098.jpg)
A1549.- affect all computer applications e.g.:- 1-developing new programs and systems,- 2-changing existing programs and systems,- 3-controlling access to programs and data and- 4-controlling computer operations.
![Page 3099: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3099.jpg)
Q1550.- The five components of internal control are:
![Page 3100: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3100.jpg)
A1550.- a) Control Environment - this is the foundation of all othercomponents;- b) Risk Assessment - the identification and analysis ofrelevant risks to achieve the entity's objectives- c) Control Activities - the policies and procedures toensure management directives are carried out- d) Information and Communication - identification,capture, and exchange of data in a format and time to allowproper tasks and responsibilities to be performed- e) Monitor - The process that assesses the quality ofinternal control performance over time
![Page 3101: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3101.jpg)
Q1551.- Process objectives that internal control systems shouldbe designed to achieve include:
![Page 3102: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3102.jpg)
A1551.- Operations and Information process goals.
![Page 3103: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3103.jpg)
Q1552.- Operations Process Goals should ensure:
![Page 3104: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3104.jpg)
A1552.- (1) Effectiveness of operations - Strives to ensure than anintended process is fulfilling its intended purpose (such asproper management authorization for overrides)- (2) Efficient resources - to have enough resources toensure benefits of controls exceed the costs of thosecontrols- (3) Security of resources - protect all tangible andintangible resources.
![Page 3105: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3105.jpg)
Q1553.- Information Process Control Goals should ensure:
![Page 3106: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3106.jpg)
A1553.- (1) Input validity - where input data be approved andreflect accurate economic events- (2) Input completeness - all valid events are captured- (3) Input accuracy - all events are captured correctly- (4) Update completeness - all events are reflected inrespective master files- (5) Update accuracy - all events are reflected correctlywithin master file.
![Page 3107: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3107.jpg)
Q1554.- Control Plans:
![Page 3108: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3108.jpg)
A1554.- are policies & procedures that assist in accomplishingcontrol goals.
![Page 3109: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3109.jpg)
Q1555.- A combination of control plans must be used to maximizeeffectiveness. Three levels are
![Page 3110: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3110.jpg)
A1555.- Control Environment (top level),- Pervasive Control Plans (mid-level)- Application Control (detail level) Plans.
![Page 3111: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3111.jpg)
Q1556.- Another way to view control plans is in relation to thetiming of their occurrence:
![Page 3112: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3112.jpg)
A1556.- Preventive control plans stop problems from occurring;- Detective control plans discover problems that havealready occurred;- Corrective control plans correct problems that havealready occurred.
![Page 3113: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3113.jpg)
Q1557.- Control Objectives for Information and RelatedTechnology - [cobiT] – developed by the InformationSystems Audit and Control Foundation – to provide:
![Page 3114: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3114.jpg)
A1557.- guidance on best practices for management andInformation technology.
![Page 3115: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3115.jpg)
Q1558.- [cobiT] groups IT control processes into four domains:
![Page 3116: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3116.jpg)
A1558.- a) Planning & Organization – Establish strategic vision forthe IT area; develop plan to achieve vision.- b) Acquisition & Implementation – Identify automated andIT solutions; integrate the solutions; manage changes toexisting systems; Manage Change with users.- c) Delivery & Support – Deliver required IT services;ensure security; provide on-going support.- d) Monitor operations.
![Page 3117: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3117.jpg)
Q1559.- Three main types of system documentation used byauditors and analysts are:
![Page 3118: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3118.jpg)
A1559.- (a) Data Flow Diagrams (DFDs) that illustrate the systemcomponents and functions, data flows among thecomponents and sources, destinations and storage of thedata;- (b) System Flowcharts that illustrate InformationalProcesses (such as logic flows, inputs, outputs, datastorage), Operational Processes (such as physical flows)and- (c) Entity Relationship Diagrams that illustrate the system’s key entities and the relationships among those entities.
![Page 3119: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3119.jpg)
Q1560.- Elements of Definition of Partnership
![Page 3120: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3120.jpg)
A1560.- 1. Association of agreement or contract- 2. No limit on the number of parties- 3. Persons can be any entities except as prohibited bystate law
![Page 3121: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3121.jpg)
Q1561.- Liability of a partner who joins an existing partnership
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A1561.- The partner is generally liable for all subsequently-incurred debts, but is liable for preexisting debts only outof her firm contribution
![Page 3123: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3123.jpg)
Q1562.- Partnership Interest
![Page 3124: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3124.jpg)
A1562.- Personal Property - consists of the right to share in thepartnership's profits
![Page 3125: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3125.jpg)
Q1563.- Creditor Restriction
![Page 3126: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3126.jpg)
A1563.- No creditor of an individual partner may attachpartnership property to satisfy an individual debt
![Page 3127: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3127.jpg)
Q1564.- Partnership Property
![Page 3128: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3128.jpg)
A1564.- Owned by the partnership entity, not by the partners incommon
![Page 3129: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3129.jpg)
Q1565.- Limited Partnership
![Page 3130: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3130.jpg)
A1565.- The partnership consists of at least one general partner(GP) and at least one limited partner (LP)
![Page 3131: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3131.jpg)
Q1566.- Right to Manage
![Page 3132: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3132.jpg)
A1566.- All partners have equal rights in the management andconduct of business affairs, absent agreement
![Page 3133: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3133.jpg)
Q1567.- Right to Profits
![Page 3134: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3134.jpg)
A1567.- Absent agreement, profits and losses are to be sharedequally
![Page 3135: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3135.jpg)
Q1568.- The Duty of Care
![Page 3136: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3136.jpg)
A1568.- Duty is limited to "refraining from engaging in grosslynegligent or reckless conduct, intentional misconduct, or aknowing violation of law"
![Page 3137: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3137.jpg)
Q1569.- Partnership Assets include...
![Page 3138: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3138.jpg)
A1569.- All partnership property, and any additional contributionsof partners necessary to pay obligations
![Page 3139: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3139.jpg)
Q1570.- Three distinct phases of the UPA approach
![Page 3140: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3140.jpg)
A1570.- Dissolution, Winding up, and Termination
![Page 3141: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3141.jpg)
Q1571.- LLP member liability
![Page 3142: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3142.jpg)
A1571.- Liable for their own torts and for the torts of those theysupervise
![Page 3143: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3143.jpg)
Q1572.- Formation of Limited Liability Partnerships (LLPs)
![Page 3144: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3144.jpg)
A1572.- Must be formed by filing appropriate documents with theSecretary of State
![Page 3145: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3145.jpg)
Q1573.- Joint stock companies
![Page 3146: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3146.jpg)
A1573.- Organized under a contract normally called the articles ofassociation
![Page 3147: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3147.jpg)
Q1574.- Persons Liable for Stock Sold Below Par or AuthorizedPrice
![Page 3148: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3148.jpg)
A1574.- 1. The board who allowed the sale- 2. The buyer who paid too little- 3. Transferees who know the buyer paid too little and whopay too little themselves
![Page 3149: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3149.jpg)
Q1575.- Redeemable
![Page 3150: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3150.jpg)
A1575.- Must be purchased by corporation under specificcircumstances if shareholder requests
![Page 3151: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3151.jpg)
Q1576.- Bonds
![Page 3152: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3152.jpg)
A1576.- Debt secured by corporate property
![Page 3153: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3153.jpg)
Q1577.- Factors Necessary to Overcome Presumption of BoardDiscretion in Issuing Dividends
![Page 3154: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3154.jpg)
A1577.- 1. The board acted in bad faith- 2. Funds to pay dividends existed in a legally availablesource
![Page 3155: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3155.jpg)
Q1578.- Proper payment of dividends
![Page 3156: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3156.jpg)
A1578.- 1. Only out of legally available funds- 2. Only in accordance with applicable preferences
![Page 3157: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3157.jpg)
Q1579.- When Dividends Cannot be Distributed
![Page 3158: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3158.jpg)
A1579.- 1. If it would make the corporation insolvent, or- 2. If the distribution exceeds the surplus of thecorporation
![Page 3159: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3159.jpg)
Q1580.- Common Law Rights
![Page 3160: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3160.jpg)
A1580.- General Rule -- shareholders may inspect at proper timesin proper places for proper purposes
![Page 3161: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3161.jpg)
Q1581.- Proxies
![Page 3162: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3162.jpg)
A1581.- Granting others the right to cast their votes atshareholder meetings
![Page 3163: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3163.jpg)
Q1582.- Types of Economic Systems
![Page 3164: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3164.jpg)
A1582.- 1. Command Economic System (Communism orSocialism)- 2. Market (Free-enterprise) Economic System
![Page 3165: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3165.jpg)
Q1583.- Characteristics of Free-Market Economy
![Page 3166: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3166.jpg)
A1583.- 1. Interdependent relationship between individuals andbusiness firms- 2. Production depends on preferences of individuals withability to pay for goods and services- 3. Production depends on availability of economicresources, level of technology, and how business firmschoose to use them- 4. Production depends on sale price being at least equalto production cost
![Page 3167: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3167.jpg)
Q1584.- Causes for Change in Aggregate Demand
![Page 3168: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3168.jpg)
A1584.- 1. Size of market- 2. Income or wealth of market participants- 3. Preferences of market participants- 4. Change in prices of other goods and services
![Page 3169: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3169.jpg)
Q1585.- Principle of Increasing Cost
![Page 3170: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3170.jpg)
A1585.- Production costs increase in the short-run as the quantityproduced increases because new resources are not usedas efficiently as those previously used.
![Page 3171: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3171.jpg)
Q1586.- What are the variables that change aggregate supply?
![Page 3172: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3172.jpg)
A1586.- Changes in:- 1. Number of providers- 2. Cost of inputs- 3. Government taxation or subsidization- 4. Technological advances
![Page 3173: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3173.jpg)
Q1587.- What is the slope of a normal supply curve?
![Page 3174: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3174.jpg)
A1587.- A normal supply curve has a positive slope - the higherprice the greater the quantity that will be supplied.
![Page 3175: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3175.jpg)
Q1588.- Results of a Change in Market Demand (only) onEquilibrium
![Page 3176: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3176.jpg)
A1588.- 1. Increase in market demand = Demand curve shifts upand to the right; Decrease in market demand = Demandcurve shifts down and to the left.- 2. Increase in market demand w/no change in supply =Increase in both equilibrium price and equilibrium quantity.- 3. Decrease in market demand w/no change in supply =Decrease in both equilibrium price and equilibriumquantity.
![Page 3177: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3177.jpg)
Q1589.- Governmental Influences on Equilibrium Supply
![Page 3178: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3178.jpg)
A1589.- 1. Taxation increases the cost and shifts the marketsupply curve up and to the left.- 2. Subsidization decreases the cost and shifts the marketsupply curve down and to the right.
![Page 3179: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3179.jpg)
Q1590.- Equilibrium Price
![Page 3180: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3180.jpg)
A1590.- 1. Price at which the quantity of a commodity supplied isequal to the quantity of that commodity demanded.- 2. The intersection of the market demand and supplycurves.
![Page 3181: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3181.jpg)
Q1591.- Results of a Change in Market Supply (only) onEquilibrium
![Page 3182: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3182.jpg)
A1591.- 1. Increase in market supply = Supply curve shifts downand to the right; Decrease in market supply = Supply curveshifts up and to the left.- 2. Increase in market supply w/no change in demand =Decrease in equilibrium price and increase in equilibriumquantity.- 3. Decrease in market supply w/no change in demand =Increase in equilibrium price and a decrease in equilibriumquantity.
![Page 3183: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3183.jpg)
Q1592.- Elasticity
![Page 3184: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3184.jpg)
A1592.- Measures the percentage change in a market factor as aresult of a given percentage change in another marketfactor
![Page 3185: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3185.jpg)
Q1593.- Elasticity of Demand
![Page 3186: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3186.jpg)
A1593.- The percentage change in quantity of a commoditydemanded as a result of a given percentage change in theprice of the commodity
![Page 3187: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3187.jpg)
Q1594.- Elasticity of Supply
![Page 3188: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3188.jpg)
A1594.- The percentage change in the quantity of a commoditysupplied as a result of a given percentage change in theprice of the commodity
![Page 3189: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3189.jpg)
Q1595.- What does "Demand is Elastic" mean?
![Page 3190: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3190.jpg)
A1595.- If demand is elastic, the percentage change in demand isgreater than the percentage change in price, the elasticitycoefficient is greater than 1 and total revenue will changein the opposite direction as the change in price.
![Page 3191: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3191.jpg)
Q1596.- Measures of Elasticity
![Page 3192: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3192.jpg)
A1596.- 1. Elasticity of Demand- 2. Elasticity of Supply- 3. Income Elasticity of Demand- 4. Cross Elasticity of Demand
![Page 3193: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3193.jpg)
Q1597.- Indifference Curve
![Page 3194: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3194.jpg)
A1597.- Various quantities of two commodities that give anindividual the same total utility as plotted on a graph.
![Page 3195: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3195.jpg)
Q1598.- Utility
![Page 3196: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3196.jpg)
A1598.- Satisfaction derived from the acquisition or use of acommodity
![Page 3197: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3197.jpg)
Q1599.- Law of Diminishing Marginal Utility
![Page 3198: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3198.jpg)
A1599.- Decreasing utility (satisfaction) is derived from eachadditional (marginal) unit of a commodity acquired.
![Page 3199: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3199.jpg)
Q1600.- Marginal Utility
![Page 3200: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3200.jpg)
A1600.- The utility derived from each (additional) marginal unit(i.e., from the last unit acquired).
![Page 3201: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3201.jpg)
Q1601.- Examples of Variable Costs
![Page 3202: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3202.jpg)
A1601.- 1. Raw materials- 2. Most labor- 3. Electricity
![Page 3203: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3203.jpg)
Q1602.- Economies of Scale (also Increasing Return to Scale)
![Page 3204: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3204.jpg)
A1602.- The long-run average cost curve is decreasing reflectingthat the quantity of output is increasing in greaterproportion than the increase in inputs, largely due tospecialization of labor and equipment.
![Page 3205: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3205.jpg)
Q1603.- Law of Diminishing Returns
![Page 3206: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3206.jpg)
A1603.- The point at which the quantity of variable inputs beginsto overwhelm the fixed factors resulting in inefficienciesand diminishing return on marginal units of variableinputs.
![Page 3207: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3207.jpg)
Q1604.- What is the shape of the demand curve for a firm inPerfect Competition?
![Page 3208: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3208.jpg)
A1604.- The demand curve faced by a single firm in a perfectlycompetitive market is a straight horizontal line originatingat the price set by the market (of all firms).
![Page 3209: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3209.jpg)
Q1605.- How are long-run profits determined for a firm in perfectcompetition?
![Page 3210: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3210.jpg)
A1605.- There are no long-run profits possible in a perfectlycompetitive market. If profits are made in the short-run,more firms will enter the market and increase supply, thusdecreasing market price until all firms just breakeven.
![Page 3211: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3211.jpg)
Q1606.- Characteristics of Perfect Competition
![Page 3212: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3212.jpg)
A1606.- 1. A large number of independent buyers and sellers,each of which is too small to separately affect the price ofa commodity- 2. All firms sell homogeneous products or services- 3. Firms can enter or leave the market easily- 4. Resources are completely mobile- Buyers and sellers have perfect information- Government does not set prices.
![Page 3213: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3213.jpg)
Q1607.- In the long-run, how may a monopoly firm increase itsprofits?
![Page 3214: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3214.jpg)
A1607.- A monopoly firm may increase its profits in two ways:- 1. Reduce cost by changing the size if its operations- 2. Increase demand through advertising, promotion, etc.
![Page 3215: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3215.jpg)
Q1608.- Typical Reasons Monopolies Exist
![Page 3216: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3216.jpg)
A1608.- 1. Control of raw materials or processes- 2. Government granted franchise (i.e., exclusive right)- 3. Increasing return to scale (i.e., natural monopolies)
![Page 3217: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3217.jpg)
Q1609.- Characteristics of Monopolistic Competition
![Page 3218: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3218.jpg)
A1609.- 1. A large number of sellers- 2. Firms sell a differentiated product or service (similarbut not identical), for which there are close substitutes- 3. Firms can enter or leave the market easily
![Page 3219: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3219.jpg)
Q1610.- How are long-run profits determined for a firm inMonopolistic Competition?
![Page 3220: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3220.jpg)
A1610.- There are no long-run profits possible in a monopolisticcompetition. If profits are made in the short-run, morefirms will enter the market and lower the demand for eachfirm until each just breaks even
![Page 3221: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3221.jpg)
Q1611.- Distinguish between Overt Collusion and Tacit Collusion
![Page 3222: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3222.jpg)
A1611.- 1. Overt Collusion = Firms conspire to set output, price orprofit; illegal in the U.S.- 2. Tacit Collusion = Firms follow price charged by theprice leader in the market; not illegal in the U.S.
![Page 3223: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3223.jpg)
Q1612.- Characteristics of Oligopoly
![Page 3224: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3224.jpg)
A1612.- 1. A few sellers- 2. Firms sell either a homogeneous product (standardizedoligopoly) or a differentiated product (differentiatedoligopoly)- 3. Restricted entry into the market
![Page 3225: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3225.jpg)
Q1613.- Demand Curve Shift
![Page 3226: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3226.jpg)
A1613.- A demand curve shifts when demand variables other thanprice change.
![Page 3227: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3227.jpg)
Q1614.- Price elasticity of demand
![Page 3228: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3228.jpg)
A1614.- Percentage change in quantity demanded/Percentagechange in price
![Page 3229: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3229.jpg)
Q1615.- Interpretation of the demand elasticity coefficient
![Page 3230: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3230.jpg)
A1615.- If the elasticity of demand is greater than 1, demand issaid to be elastic (sensitive to price changes).- If elasticity is less than 1, demand is said to be inelastic(not sensitive to price changes).
![Page 3231: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3231.jpg)
Q1616.- Cross-elasticity of demand
![Page 3232: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3232.jpg)
A1616.- Measures the change in demand for a good when theprice of a competing product is changed (eg Coke & Pepsi)- Formula: Percentage change in the quantity demanded ofProduct X / Percentage change in the Price of Product Y
![Page 3233: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3233.jpg)
Q1617.- Cross-elasticity of demand and the Relationship betweengoods
![Page 3234: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3234.jpg)
A1617.- Coefficient of cross-elasticity is positive, Goods aresubstitutes.- Coefficient is negative, Goods are complements.- Coefficient is zero, Goods are unrelated.
![Page 3235: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3235.jpg)
Q1618.- Classical Economic Theory
![Page 3236: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3236.jpg)
A1618.- Theory holds that market equilibrium will eventuallyresult in full employment over the long run without gov'tintervention.- Does not support the use of fiscal policy to stimulate theeconomy.
![Page 3237: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3237.jpg)
Q1619.- Keynesian Theory
![Page 3238: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3238.jpg)
A1619.- Theory holds that the economy does not necessarilymove towards full employment on its own.- It focuses on the use of fiscal policy (change in taxes &gov't spending) to stimulate the economy.
![Page 3239: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3239.jpg)
Q1620.- Monetarist Theory
![Page 3240: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3240.jpg)
A1620.- Theory holds that fiscal policy is too crude a tool forcontrol of the economy.- If focuses on the use of monetary policy to controleconomic growth.
![Page 3241: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3241.jpg)
Q1621.- Supply-Side Theory
![Page 3242: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3242.jpg)
A1621.- Theory holds that bolstering an economy's ability tosupply more goods is the most effective way to stimulategrowth.- A decrease in taxes (esp for bus's & individuals with highincome) increases employment, savings, & investments &is an effective way to stimulate the economy.
![Page 3243: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3243.jpg)
Q1622.- Applied Overhead Calculation
![Page 3244: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3244.jpg)
A1622.- Multiply the predetermined overhead rate times the actualnumber of activity units used in production. (Included incost of WIP)
![Page 3245: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3245.jpg)
Q1623.- Overhead Rate Formula
![Page 3246: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3246.jpg)
A1623.- Estimated total overhead costs/estimated normal activityvolume
![Page 3247: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3247.jpg)
Q1624.- Schedule of Cost of Goods Manufactured (WIP)
![Page 3248: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3248.jpg)
A1624.- Beg WIP + Direct Mats + Direct Labor + Overhead Applied- Ending WIP = Cost of Goods Manufactured
![Page 3249: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3249.jpg)
Q1625.- Direct Materials Used Formula
![Page 3250: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3250.jpg)
A1625.- Beginning Direct Materials + Purchases (net) = DirectMaterials Available for Use - Ending Direct Materials =Direct Materials Used
![Page 3251: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3251.jpg)
Q1626.- Schedule of Cost of Goods Sold
![Page 3252: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3252.jpg)
A1626.- Beginning Finished Goods + Cost of Goods Manufactured= Goods Available For Sale - Ending Finished Goods =Cost of Goods Sold
![Page 3253: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3253.jpg)
Q1627.- Conversion Costs Formula
![Page 3254: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3254.jpg)
A1627.- Direct labor costs + Factory overhead costs (Note: DL isincluded as a prime cost and a conversion cost)
![Page 3255: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3255.jpg)
Q1628.- Accounting for differences between overhead applied andactual overhead
![Page 3256: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3256.jpg)
A1628.- Immaterial differences are allocated to COGS. Materialdifferences are prorated to WIP, Finished Goods or COGSbased on respective ending balances
![Page 3257: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3257.jpg)
Q1629.- (Applied) Overhead rate formula
![Page 3258: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3258.jpg)
A1629.- Estimated total overhead costs/Estimated normal activityvolume
![Page 3259: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3259.jpg)
Q1630.- Accounting for Normal Spoilage and Scrap
![Page 3260: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3260.jpg)
A1630.- Normal spoilage is included with other costs as aninventoriable product cost
![Page 3261: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3261.jpg)
Q1631.- Accounting for Abnormal Spoilage and Scrap
![Page 3262: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3262.jpg)
A1631.- Abnormal spoilage is separated and deducted as a periodexpense in the calculation of net income
![Page 3263: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3263.jpg)
Q1632.- Accounting for the Sale of Scrap
![Page 3264: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3264.jpg)
A1632.- Any money received from the sale of scrap are used toreduce factory overhead (& thereby reduce cost of goodssold)
![Page 3265: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3265.jpg)
Q1633.- Behavior of fixed costs
![Page 3266: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3266.jpg)
A1633.- Fixed costs remain constant in total regardless ofproduction volume so fixed costs PER UNIT vary -increasing (per unit) when production decreases anddecreasing (per unit) when production increases
![Page 3267: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3267.jpg)
Q1634.- Behavior of variable costs
![Page 3268: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3268.jpg)
A1634.- Variable costs vary in total, in direct proportion tochanges in production volume.- Variable costs PER UNIT remain constant regardless ofproduction volume.
![Page 3269: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3269.jpg)
Q1635.- Account for Difference between Applied and ActualOverhead
![Page 3270: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3270.jpg)
A1635.- Immaterial differences are allocated to COGS. (reducesCOGS if overhead is overapplied, increases COGS ifoverhead is underapplied)- Material differences are prorated to WIP, Finished Goodsor COGS based on respective ending balances.
![Page 3271: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3271.jpg)
Q1636.- Fixed vs. Variable Costs
![Page 3272: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3272.jpg)
A1636.- Fixed costs remain constant in total regardless ofproduction volume. Fixed costs PER UNIT vary.- Variable costs vary in total in proportion to changes inproduction however variable costs remain constant PERUNIT.
![Page 3273: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3273.jpg)
Q1637.- Fixed, Variable & Total Costs' behavior when productionvolume changes
![Page 3274: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3274.jpg)
A1637.- Unit Costs Total Costs- Fixed Vary Constant- Variable Constant Vary- Total Vary Vary
![Page 3275: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3275.jpg)
Q1638.- Absorption Costing
![Page 3276: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3276.jpg)
A1638.- assigns all three factors of production (direct material,direct labor and both fixed & variable manufacturingoverhead) to inventory.- Required for external reporting purposes
![Page 3277: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3277.jpg)
Q1639.- Direct Costing
![Page 3278: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3278.jpg)
A1639.- (aka variable costing) assigns only variablemanufacturing costs (direct material, direct labor &variable manufacturing overhead) to inventory.- Used for internal purposes, cannot be used for externalreporting.
![Page 3279: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3279.jpg)
Q1640.- Variable Manufacturing Costs
![Page 3280: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3280.jpg)
A1640.- Direct material, direct labor, variable factory overhead
![Page 3281: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3281.jpg)
Q1641.- Fixed manufacturing costs
![Page 3282: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3282.jpg)
A1641.- Manufacturing costs that do no vary (eg. depreciation,supervisory salaries, property taxes, insurance, etc)
![Page 3283: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3283.jpg)
Q1642.- Principal difference between the absorption costing anddirect costing
![Page 3284: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3284.jpg)
A1642.- Absorption costing assigns ALL manufacturing costs toproducts while Direct costing only assigns variablemanufacturing costs to products.
![Page 3285: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3285.jpg)
Q1643.- Effect of absorption and direct costing on operatingincome
![Page 3286: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3286.jpg)
A1643.- Inventory valuation and unit costs will always be greaterusing absorption costing than if direct costing is used (dueto direct costing ignoring fixed overhead)
![Page 3287: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3287.jpg)
Q1644.- Absorption & Direct costing effects on Net Income- Units sold = Units produced- Units sold > Units produced- Units sold < Units produced
![Page 3288: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3288.jpg)
A1644.- Absorption NI = Direct NI- Absoprtion NI < Direct NI- Absorption NI > Direct NI
![Page 3289: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3289.jpg)
Q1645.- Steps to figure Process Costing (FIFO or Weighted Avg)
![Page 3290: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3290.jpg)
A1645.- 1. Acct for all units (Beg WIP + Additions = Finished +Spoilage + Ending WIP)- 2. Calculate Equivalent Finished Units (W. Avg: EFU= # ofunits finished + % of complete ending WIP or FIFO: EFU = #of units finished - % of complete beg WIP + % of completeending WIP)- 3. Calculate Unit Costs (W. Avg: Costs in Beg WIP +current costs or FIFO: Current costs ONLY)
![Page 3291: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3291.jpg)
Q1646.- Material Price (Labor Rate) Variance
![Page 3292: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3292.jpg)
A1646.- Actual Units x Actual Price- Actual Units x Std Price- (A x A > A x S = Unfavorable- A x A < A x S = Favorable)
![Page 3293: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3293.jpg)
Q1647.- Labor Efficiency (Material Usage) Variance
![Page 3294: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3294.jpg)
A1647.- Actual Hours x Std Rates- Std Hours x Std Rates- (A x S > S x S = Unfavorable- A x S < S x S = Favorable)
![Page 3295: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3295.jpg)
Q1648.- Mixed Costs: High-Low Method
![Page 3296: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3296.jpg)
A1648.- 1. Variable Costs: Divide the change in costs by thechange in activity- 2. Fixed Costs: Total cost less variable cost equals fixedcosts
![Page 3297: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3297.jpg)
Q1649.- Direct Costing
![Page 3298: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3298.jpg)
A1649.- Only variable manufacturing costs are considered part ofinventory costs.- Contribution Margin: Selling price less all variable costs.
![Page 3299: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3299.jpg)
Q1650.- Direct Cost Unit Costs
![Page 3300: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3300.jpg)
A1650.- Direct Manufacturing + Direct Labor + Variable Overhead+ Variable Selling & Admin (Fixed costs NOT included inunit cost!)
![Page 3301: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3301.jpg)
Q1651.- Absorption Cost Unit Costs
![Page 3302: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3302.jpg)
A1651.- Direct Manufacturing + Direct Labor + Variable Overhead+ Fixed Overhead (Variable Selling & Admin NOT includedin unit cost!)
![Page 3303: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3303.jpg)
Q1652.- Direct and Absorptions effect on income
![Page 3304: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3304.jpg)
A1652.- If a company produces more than it sells, absorptionshows more profit than direct.- If the company produces less than it sells, absorptionshows less profit than direct.- If the company produces the same amount as it sells,absorption will show the same amount of profit than direct.
![Page 3305: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3305.jpg)
Q1653.- Margin of Safety
![Page 3306: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3306.jpg)
A1653.- The difference between current sales and breakevensales.
![Page 3307: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3307.jpg)
Q1654.- Breakeven Sales
![Page 3308: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3308.jpg)
A1654.- Fixed Cost/Contribution Margin Percentage
![Page 3309: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3309.jpg)
Q1655.- Does every partner have the power to dissociate from thep/s?
![Page 3310: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3310.jpg)
A1655.- Yes
![Page 3311: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3311.jpg)
Q1656.- What's rule of notice?
![Page 3312: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3312.jpg)
A1656.- For p/s affairs, notice to any individual partner is imputedto all other partners.- Also, any knowledge gained while working on p/s mattersis imputed to all other members of the p/s.
![Page 3313: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3313.jpg)
Q1657.- What's the rule of termination?
![Page 3314: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3314.jpg)
A1657.- Majority of partners may terminate the authority of apartner, or minority of partners, unless this action wouldbe contrary to a previous agreement.
![Page 3315: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3315.jpg)
Q1658.- What's the apparent authority rule?
![Page 3316: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3316.jpg)
A1658.- The actions of a partner which are apparently for thecarrying on of the p/s bus in the usual way, but which arenot actually authorized, still will bind the p/s if the 3rd partydon't know of the partner's lack of actual authority.
![Page 3317: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3317.jpg)
Q1659.- Explain basic p/s liab!
![Page 3318: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3318.jpg)
A1659.- Partner's are jointly & severally liable for contracts & allactions in tort or fraud against any p/s member where thep/s is not an LLP.- The other partners are liable only when it relates to p/sbus.- A person can sue any # of partners they want, losingpartners can have right of contribution and right ofindemnification.
![Page 3319: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3319.jpg)
Q1660.- What's the rule of admission?
![Page 3320: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3320.jpg)
A1660.- An admission or representation made by any partnerwhile the partner is acting within the scope of her/hisauthority is admissible as evidence against the p/s.
![Page 3321: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3321.jpg)
Q1661.- Gen'l limitations to partners without p/s agreement are?
![Page 3322: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3322.jpg)
A1661.- 1. Assign the prop of the p/s in trust for the benefit ofcreditors or on the assignee's promise to pay the debt's ofthe p/s.- 2. Dispose of GW of the bus or do any other act thatwould make it impossible to carry on the ord bus of thep/s.- 3. Confess a judgment- 4. Submit a p/s claim or liability to arbitration
![Page 3323: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3323.jpg)
Q1662.- What's a statement of authority?
![Page 3324: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3324.jpg)
A1662.- The p/s may file a statement of authority outlining theauthority that particular partner or partner's have.
![Page 3325: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3325.jpg)
Q1663.- Who has the right & authority to wind up the business?
![Page 3326: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3326.jpg)
A1663.- Unless, otherwise agreed, any nonbankrupt partner whohas not dissociated from the p/s wrongfully, or the legalrep's of the last surviving partner.- Remember though also: any partner, the partner's legalrep, or the partner's assignee may petition for winding upby the court.
![Page 3327: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3327.jpg)
Q1664.- Are remaining partners allowed to continue the businessafter dissolution?
![Page 3328: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3328.jpg)
A1664.- Yes! Only if ALL the partners, including the dissociatingone's waive the right to have the business wound up andterminated.
![Page 3329: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3329.jpg)
Q1665.- What is winding up the business?
![Page 3330: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3330.jpg)
A1665.- P/S continues after dissolution only for the purpose ofwinding up it's bus then it's terminated! To participate can'thave dissociated wrongfully! Even after termination if apreviously unknown liability is asserted, all of the partnersare still liable.
![Page 3331: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3331.jpg)
Q1666.- What are 2 things the courts view as evidence of apartners intent to discontinue?
![Page 3332: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3332.jpg)
A1666.- 1) Assignment of partnership interests- 2) Levy of changing order
![Page 3333: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3333.jpg)
Q1667.- What are 3 rights available when p/s is rescinded on thegrounds of fraud or misrepresentation?
![Page 3334: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3334.jpg)
A1667.- 1. Right to a lien on, or a right to retention of, the surplusof the p/s to secure her/his cap inv & any advances.- 2. After all liability to 3rd persons have been satisfied, theright to stand in the place of creditors for her/his paymentmade on p/s liab.- 3. The right to be indemnified by the person who is guiltyof fraud or misrep.
![Page 3335: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3335.jpg)
Q1668.- What's a filing statement of dissolution?
![Page 3336: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3336.jpg)
A1668.- Any partner who has not dissociated wrongfully may file astatement of dissolution on behalf of the p/s. After 90 days,this notice gives constructive notice to creditors that theapparent authority of the p/s is ended for all purposesexcept winding up.
![Page 3337: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3337.jpg)
Q1669.- Are p/s allowed to be converted & merged by anymanner?
![Page 3338: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3338.jpg)
A1669.- yes! By any manner provided by law. In the p/s less thanunanimous consent is req'd.
![Page 3339: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3339.jpg)
Q1670.- What 2 proc's are followed when a court decreesdissolution?
![Page 3340: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3340.jpg)
A1670.- 1) Accting - determine the dr's and cr's of each partner &court supervises the dist of p/s assets.- 2) Dist Method - Usually the court orders a sale of all p/sassets & applies proceeds 1st to satisfy debts, & then torepay each partners cap acct. Any remaining proceeds stillremaining gets paid to the partners as earnings inproportion to the share of the profits.
![Page 3341: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3341.jpg)
Q1671.- What doe capacity mean?
![Page 3342: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3342.jpg)
A1671.- Anyone basically!
![Page 3343: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3343.jpg)
Q1672.- Can gen'l partners have limited liab?
![Page 3344: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3344.jpg)
A1672.- NO!
![Page 3345: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3345.jpg)
Q1673.- What's a limited partner?
![Page 3346: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3346.jpg)
A1673.- One who contributes cap but don't have an authority orvoice in management of the bus. limited liability tocreditors.
![Page 3347: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3347.jpg)
Q1674.- Which p/s does not req a state filing?
![Page 3348: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3348.jpg)
A1674.- Gen'l. Everything else does req state filing.
![Page 3349: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3349.jpg)
Q1675.- 4 things in RUPA are?
![Page 3350: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3350.jpg)
A1675.- 1. Business- 2. Co-ownership (not an agent)- 3. Profit- 4. Capacity
![Page 3351: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3351.jpg)
Q1676.- Can an infant be a partner?
![Page 3352: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3352.jpg)
A1676.- Yes! To extent of infants power to contract. An infant maywithdraw at ANY time, unless & only to the extent the p/s issubject to creditor's claims.- Infant is liable only to their contribution.
![Page 3353: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3353.jpg)
Q1677.- What's an LLP?
![Page 3354: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3354.jpg)
A1677.- Liability protection to gen'l partners.
![Page 3355: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3355.jpg)
Q1678.- Does a sole prop need to register in each state to do busnationwide?
![Page 3356: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3356.jpg)
A1678.- No! Corps and LLC's do however!
![Page 3357: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3357.jpg)
Q1679.- What's a dormant partner?
![Page 3358: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3358.jpg)
A1679.- One who has a right to participate in management, but isundisclosed & generally inactive, once disclosed has sameliability as any other gen'l partner.
![Page 3359: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3359.jpg)
Q1680.- In a limited partnership, who has the authority to bind?
![Page 3360: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3360.jpg)
A1680.- Gen'l one's!
![Page 3361: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3361.jpg)
Q1681.- What form is partnership return?
![Page 3362: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3362.jpg)
A1681.- 1065 & info only!
![Page 3363: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3363.jpg)
Q1682.- What's a silent partner?
![Page 3364: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3364.jpg)
A1682.- Unlimited liability but don't share in management ofpartnership!
![Page 3365: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3365.jpg)
Q1683.- What's a secret partner?
![Page 3366: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3366.jpg)
A1683.- One that participates in management but is undisclosed,once disclosed unlimited liab.
![Page 3367: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3367.jpg)
Q1684.- Explain entity status!
![Page 3368: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3368.jpg)
A1684.- The gen'l rule is that if an entity with 2 or more persons isformed under state law that is not a corp it is taxed as ap/s. A 1 person LLC is disregarded for fed tax purposes &no separate return is req'd, yet it don't lose it's liabilityshield.
![Page 3369: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3369.jpg)
Q1685.- Can a partner's int be assigned?
![Page 3370: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3370.jpg)
A1685.- Yes.- Assignee is only entitled to receive profits & capital towhich the partner would have been titled. However theassignor remains liable on all p/s debts.- An assignment don't cause a dissociation.
![Page 3371: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3371.jpg)
Q1686.- What's a certificate?
![Page 3372: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3372.jpg)
A1686.- When p/s is doing business under a fictitious name, itmust file a certificate w the SOS.- Certificate must list the names & addresses of thepartners & the fictitious name of the business.- Fines can occur if failure to comply.
![Page 3373: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3373.jpg)
Q1687.- What happens to a p/s int when a partner dies?
![Page 3374: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3374.jpg)
A1687.- The partners int descends as personal prop regardless ofthe form in which the firms assets exist.
![Page 3375: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3375.jpg)
Q1688.- Explain fiduciary duty!
![Page 3376: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3376.jpg)
A1688.- The only fiduciary duties a partner owes to the p/s areduty of care & the duty of loyalty.
![Page 3377: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3377.jpg)
Q1689.- What are the rights of an individual partners creditor top/s assets?
![Page 3378: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3378.jpg)
A1689.- Can't execute on or attach p/s assets. Creditor's onlyremedy is to obtain a charging order against the debtorpartners interest. The creditor is then entitled to all futuredistributions of assets or surplus due the partner until thejudgment is satisfied.
![Page 3379: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3379.jpg)
Q1690.- Can you assign rights in p/s property such as right topossess or use?
![Page 3380: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3380.jpg)
A1690.- No, unless all the partners assign their rights in the sameproperty.
![Page 3381: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3381.jpg)
Q1691.- Will the act of partner committed within the scope of thepartner's actual or apparent authority bind the p/s?
![Page 3382: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3382.jpg)
A1691.- Yes!
![Page 3383: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3383.jpg)
Q1692.- 2nd 3 of 9 things p/s agreement may not do are?
![Page 3384: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3384.jpg)
A1692.- 1) Bargain away rule that every partner has the power towithdraw from the p/s at any time.- 2) Vary the right of partners to have the p/s dissolved &it's bus wound up.- 3) Vary the right of a court to expel a partner.
![Page 3385: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3385.jpg)
Q1693.- What's the principal remedy avail to a partner againsther/his co-partners?
![Page 3386: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3386.jpg)
A1693.- A suit in equity for a dissolution & an accounting.
![Page 3387: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3387.jpg)
Q1694.- Can widower get interest?
![Page 3388: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3388.jpg)
A1694.- Yes
![Page 3389: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3389.jpg)
Q1695.- What's the 1st 3 of 9 things the p/s agreement may notdo?
![Page 3390: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3390.jpg)
A1695.- 1) Vary the req's for executing, filing, & recording p/sstatements, except the duty to provide copies to all thepartners.- 2) Unreasonably restrict partners or former partnersaccess rights to books- 3) Entirely eliminate fiduciary duties or obligation of goodfaith & fair dealings. Can be modified to certain limits.
![Page 3391: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3391.jpg)
Q1696.- What happens when a partner says another person is partof the p/s but they really are not?
![Page 3392: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3392.jpg)
A1696.- They become an agent and what they do is binding with3rd parties. Any liability resulting from the misrep extendsonly to the partners who consented to the misrep!
![Page 3393: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3393.jpg)
Q1697.- What's the 3rd 3 of 9 things the p/s agreement may notdo?
![Page 3394: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3394.jpg)
A1697.- 1) Vary the req to wind up the p/s bus in certain cases.- 2) Vary the law applicable to a LLP.- 3) Restrict the rights of 3rd parties under RUPA.
![Page 3395: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3395.jpg)
Q1698.- Does a p/s agreement need to be in writing?
![Page 3396: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3396.jpg)
A1698.- No. Only needed if would be in violation of statute offrauds. ex. transfer of real property or bus will last longerthan 1 yr.
![Page 3397: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3397.jpg)
Q1699.- Explain limited partners repayment of cont?
![Page 3398: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3398.jpg)
A1699.- A limited partner may demand or receive $ in repaymentof their contribution.- However the partner may not do so until all p/s liability tocreditors have been paid or the p/s has sufficient assets topay them.
![Page 3399: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3399.jpg)
Q1700.- What does an LLC file w / SOS & county clerk?
![Page 3400: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3400.jpg)
A1700.- Articles of organization.
![Page 3401: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3401.jpg)
Q1701.- Explain assignment of limited partners interest & rights.
![Page 3402: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3402.jpg)
A1701.- A limited partner's interest is considered personalproperty & it's freely assignable. However right's are NOTassignable UNLESS it is to a substituted limited partnerand all other partner's are in agreement & the certificate isamended.
![Page 3403: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3403.jpg)
Q1702.- Which p/s formation must be in accordance with strictstatutory requirements?
![Page 3404: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3404.jpg)
A1702.- LLP. Must also only be formed in jurisdictions that haveenacted enabling statutes. Certificate must be filed withSOS & county clerk.
![Page 3405: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3405.jpg)
Q1703.- List 1st 5 items in Articles of P/S.
![Page 3406: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3406.jpg)
A1703.- 1) Firm Name- 2) Names & Addresses of partners- 3) Date p/s becomes effective & intended duration- 4) nature, purpose, & scope of p/s activity- 5) proc for admission of new partners
![Page 3407: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3407.jpg)
Q1704.- What happens to a right to property when a partner dies?
![Page 3408: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3408.jpg)
A1704.- Surviving partners have duty to account to the estate ofthe deceased for the value of the deceased partner's rightsin the property.
![Page 3409: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3409.jpg)
Q1705.- What are the partner's rights to participate inmanagement?
![Page 3410: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3410.jpg)
A1705.- All have rights in management & control of the businessunless there is a specific agreement that says not.
![Page 3411: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3411.jpg)
Q1706.- List 2nd 5 items in Articles of P/S.
![Page 3412: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3412.jpg)
A1706.- 1) Computation of int on p/s cap- 2) Computation of profits & the proportionate share ofprofits & losses attributable to each partner- 3) Powers & duties of the partners- 4) Dissolution proc's & rights- 5) Proc for dist of surplus, including the disposition of thefirm name & GW.
![Page 3413: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3413.jpg)
Q1707.- What's the order of dist for settling accts when an LLC isdissolved?
![Page 3414: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3414.jpg)
A1707.- 1) Creditors- 2) Capital- 3) Profits
![Page 3415: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3415.jpg)
Q1708.- Can a limited partner's name appear in the p/s name?
![Page 3416: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3416.jpg)
A1708.- No! Unless it can be designated that they are a limitedpartner.
![Page 3417: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3417.jpg)
Q1709.- Once the p/s prop & the prop of the individual partnersare in the hands of the court for distribution, what are thepriorities?
![Page 3418: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3418.jpg)
A1709.- 1) P/S creditors have priority is to p/s prop.- 2) Individual creditor's generally have priority as toindividual prop, except for a p/s bankruptcy, wherein thep/s creditor's share pro rata with partner's personalcreditor's.- 3) Rights of secured or lien creditor's.
![Page 3419: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3419.jpg)
Q1710.- Asset dist order when p/s is over?
![Page 3420: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3420.jpg)
A1710.- Applied in this order:- 1) Those owing to creditor's including partners- 2) Those owing to partner's other than for cap & profits- 3) Those owing to the partner's for cap & profits.
![Page 3421: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3421.jpg)
Q1711.- Explain limited partner's share of profits or other comp?
![Page 3422: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3422.jpg)
A1711.- A limited partner may receive a share of the profits andother comp, however after the payment assets much begreater than all liability to creditors.
![Page 3423: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3423.jpg)
Q1712.- When is a p/s not bound by any partner's acts afterdissociation?
![Page 3424: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3424.jpg)
A1712.- 1) The p/s is dissolved because it's unlawful to carry outthe business except when the act is appropriate to wind upp/s affairs.- 2) The partner is bankrupt or has no authority to wind upp/s affairs.
![Page 3425: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3425.jpg)
Q1713.- What happens if an individual partner becomes bankruptor insolvent?
![Page 3426: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3426.jpg)
A1713.- The claims against her/his property rank as follows:- 1) Those owing to personal creditors- 2) Those owing to p/s creditors- 3) Those owing to partners who have made advances forthe benefit of the p/s.
![Page 3427: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3427.jpg)
Q1714.- Are partners liable for the amount necessary to satisfy allthe claims?
![Page 3428: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3428.jpg)
A1714.- Yes! If a partner is insolvent or beyond the reach ofjudicial process, the other partners are responsible forthere liab's!- Such contributing partners are liable in the proportion inwhich they share in the profits.
![Page 3429: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3429.jpg)
Q1715.- What are the 3 things that allow a dissociated partner tohave their liab's discharged?
![Page 3430: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3430.jpg)
A1715.- 1. Agreement- 2. Assumption- 3. Deceased partners NONPARTNERSHIP Property
![Page 3431: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3431.jpg)
Q1716.- Does a manager of an LLC have to be a member?
![Page 3432: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3432.jpg)
A1716.- No!
![Page 3433: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3433.jpg)
Q1717.- Explain dist of p/s assets as stated in RUPA!
![Page 3434: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3434.jpg)
A1717.- a. 1st to p/s creditors including any partners, except forunpaid "dist".- b. 2nd to partner's who have previously withdrawn fromp/s, payments to these partners for "unpaid dist" + ret. ofcap. unpaid dist's are any dist a partner is entitled to uponwithdrawal from firm.- c. 3rd, to all partners to the extent of their cap cont &profits.
![Page 3435: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3435.jpg)
Q1718.- Can a creditor obtain through court a charge against alimited partner's interest in the p/s?
![Page 3436: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3436.jpg)
A1718.- Yes
![Page 3437: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3437.jpg)
Q1719.- What are "safe harbors" for limited partners to participatein management provided by RUPA?
![Page 3438: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3438.jpg)
A1719.- 1. Being a contractor for, or an agent or employee of thelimited p/s or of a gen'l partner.- 2. Consulting with & advising a gen'l partner regardingthe p/s.- 3. Acting as a surety- 4. Voting on p/s matters
![Page 3439: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3439.jpg)
Q1720.- What's a quasi-reorg and what's the steps?
![Page 3440: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3440.jpg)
A1720.- Proc that eliminates an acc deficit so the corp can pay divagain.- Steps:- 1) Assets revalued at NRV, but there is no net assetincrease (any loss increases the deficit)- 2) A min amt of the def must be avail in PIC. This may becreated by donation of stock from stakeholders orreduction of the par value.- 3) The deficit is charged against PIC & thus is eliminated!
![Page 3441: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3441.jpg)
Q1721.- What's the effect of a stock div on a corps side?
![Page 3442: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3442.jpg)
A1721.- Reduce RE & inc legal cap! IT DONT EFFECT ASSETS!
![Page 3443: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3443.jpg)
Q1722.- What are constructive dividends?
![Page 3444: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3444.jpg)
A1722.- When salaries in closely held corps are unreasonable,IRS counts it as a div!
![Page 3445: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3445.jpg)
Q1723.- What are 4 things that an agent is NOT allowed to do?
![Page 3446: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3446.jpg)
A1723.- 1. Cant act for 2 prins with conflicting interests unlessboth consent!- 2. Cant deal for their own int!- 3. Cant compete with prin without prins consent.- 4. Cant disclose to others confidential info learned duringthe agency relationship.
![Page 3447: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3447.jpg)
Q1724.- Does an agency agreement have to be in writing?
![Page 3448: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3448.jpg)
A1724.- No! Unless stat of frauds. ex. selling real prop or greaterthan 1 yr!
![Page 3449: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3449.jpg)
Q1725.- What's ratification?
![Page 3450: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3450.jpg)
A1725.- Acts performed by 1 who isn’t an agent, or unauthorizedacts by the agent, may be ratified by the prin! A singletrans must be ratified in its entirety or not at all! Can beratified expressly or implied!
![Page 3451: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3451.jpg)
Q1726.- In a derivative suit, any recovery goes to whom?
![Page 3452: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3452.jpg)
A1726.- The Corp!
![Page 3453: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3453.jpg)
Q1727.- Explain cum voting for directors.
![Page 3454: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3454.jpg)
A1727.- Each s/h receives votes equal to the # of her/his sharetimes the # of directors to be elected.
![Page 3455: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3455.jpg)
Q1728.- Explain a voting trust.
![Page 3456: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3456.jpg)
A1728.- stakeholders turn over their voting rights to a trustee fora period not more than 10 yrs. Trustee becomes record s/h.
![Page 3457: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3457.jpg)
Q1729.- What's a pooling agreement?
![Page 3458: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3458.jpg)
A1729.- Any 2 or more stakeholders may agree to vote theirshares in a given way & must be in writing & signed bythem!
![Page 3459: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3459.jpg)
Q1730.- What are the 5 basic rights of a s/h?
![Page 3460: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3460.jpg)
A1730.- 1. Derivative action- 2. Asset share on dissolution- 3. Right to vote- 4. Inspect books- 5. Preemptive right to subscribe to new stock
![Page 3461: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3461.jpg)
Q1731.- What's a direct action?
![Page 3462: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3462.jpg)
A1731.- A s/h has the right to sue for her/his own benefit!
![Page 3463: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3463.jpg)
Q1732.- What are 3 s/h control devices?
![Page 3464: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3464.jpg)
A1732.- 1. Voting trust- 2. Pooling agreements- 3. Proxy
![Page 3465: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3465.jpg)
Q1733.- Explain a proxy.
![Page 3466: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3466.jpg)
A1733.- Authorization to vote for another. A stakeholder mayappoint an agent to vote or take other action.
![Page 3467: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3467.jpg)
Q1734.- Who in a corp is responsible for appointment & oversightof any audit work performed by an audit firm?
![Page 3468: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3468.jpg)
A1734.- Audit Committee!! NOT MANAGEMENT!
![Page 3469: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3469.jpg)
Q1735.- Explain the removal of a director.
![Page 3470: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3470.jpg)
A1735.- A director can be removed at any time during their term,with or without cause with the consent of stakeholders!
![Page 3471: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3471.jpg)
Q1736.- What's an exec committee?
![Page 3472: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3472.jpg)
A1736.- It is a common practice in many jurisdictions for the BODto appt an "exec committee" to handle specific matters orthe day-to-day affairs of the corp. This committee MUST becomposed of directors!
![Page 3473: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3473.jpg)
Q1737.- What's the bus judgment rule?
![Page 3474: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3474.jpg)
A1737.- Courts adopted the bus judgment rule that when the actsor omissions involve a question of policy or bus judgment,a director who acted in good faith will not be heldpersonally liable for "mere errors of judgment or want ofprudence, short of clear & gross negligence!
![Page 3475: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3475.jpg)
Q1738.- Is CS entitled to liquidating distributions?
![Page 3476: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3476.jpg)
A1738.- Yes
![Page 3477: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3477.jpg)
Q1739.- Should AC contain at least one financial expert?
![Page 3478: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3478.jpg)
A1739.- yes
![Page 3479: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3479.jpg)
Q1740.- What are the 5 gen'l responsibilities of the AC?
![Page 3480: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3480.jpg)
A1740.- 1. Oversee the fin reporting process- 2. monitoring the choice of accting policies and prins- 3. monitoring the internal control process- 4. Appt, comp & oversight of the external auditors- 5. Receipt of communications & audit reports directlyfrom the external auditors
![Page 3481: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3481.jpg)
Q1741.- What's a quorum?
![Page 3482: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3482.jpg)
A1741.- In order for board action to be binding, a simple majorityof the directors must be present at the meeting.Furthermore, a simple majority of those % is sufficient tobind the corp legally, unless the articles call for a higher %.
![Page 3483: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3483.jpg)
Q1742.- Explain the powers of the BOD.
![Page 3484: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3484.jpg)
A1742.- Gen'ly BOD has the power to manage the bus of the corp,initiate fundamental changes subject to final approval bythe stakeholders, fill vacancies on the board, adopt &amend the bylaws, elect & fix the comp of officers, removeofficers & declare div's!- Directors are personally liable for dividends unless theyacted with due care! Directors have duty to act withreasonable care & loyalty.
![Page 3485: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3485.jpg)
Q1743.- Are stakeholders liable in a noncorp?
![Page 3486: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3486.jpg)
A1743.- Yes! Pretty much the only time!
![Page 3487: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3487.jpg)
Q1744.- Are you allowed to issue a greater # of shares thanauthorized?
![Page 3488: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3488.jpg)
A1744.- No!
![Page 3489: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3489.jpg)
Q1745.- Does TS only be purchased with a surplus?
![Page 3490: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3490.jpg)
A1745.- Yes
![Page 3491: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3491.jpg)
Q1746.- Explain participating pref stock.
![Page 3492: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3492.jpg)
A1746.- They share ratably with common stakeholders in anyprofit distributions beyond the prescribe preferred rate.Fully participating preferred holders share equally withcommon holders in xs profit dist, while partiallyparticipating holders share in a more fixed manner.
![Page 3493: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3493.jpg)
Q1747.- Can the same individual be an officer & director?
![Page 3494: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3494.jpg)
A1747.- Yes
![Page 3495: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3495.jpg)
Q1748.- Do officers need to be stakeholders in the corp?
![Page 3496: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3496.jpg)
A1748.- No
![Page 3497: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3497.jpg)
Q1749.- What's respondeat superior?
![Page 3498: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3498.jpg)
A1749.- A corp is liable for the tortuous acts of its employees,provided that the acts were committed within the course &scope of employment.
![Page 3499: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3499.jpg)
Q1750.- Explain piercing the corp veil.
![Page 3500: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3500.jpg)
A1750.- Individual stakeholders may be held personally liable forthe debts of the corp.
![Page 3501: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3501.jpg)
Q1751.- When does corp existence begin?
![Page 3502: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3502.jpg)
A1751.- At the time of filing & before the certificate is issued.
![Page 3503: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3503.jpg)
Q1752.- Who's the promoter?
![Page 3504: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3504.jpg)
A1752.- Person who is primarily responsible for forming,arranging for cap & initiating the gen'l bus of the corp. Alsoduties include drawing up corp charter & promoting stocksubscriptions. Also, they are said to be a fiduciary of thenot yet formed corp. good faith, etc.
![Page 3505: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3505.jpg)
Q1753.- Explain adoption.
![Page 3506: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3506.jpg)
A1753.- To circumvent the harsh results of placing the completefinancial burden on the promoter for preincorp contracts,the crts formulated the theory of adoption. Adoption is theacceptance of the promoters preincorp contract. Can occurin one of 3 ways: statute, agreement or implied.
![Page 3507: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3507.jpg)
Q1754.- What are the 4 things an officer has?
![Page 3508: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3508.jpg)
A1754.- 1. Authority to contract- 2. Tort liability - the usual rules of agency apply toofficers- 3. Fiduciary duties- 4. SOX
![Page 3509: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3509.jpg)
Q1755.- what's the corp opportunity doctrine?
![Page 3510: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3510.jpg)
A1755.- A director may not divert to her/himself a bus opportunitybelonging to the corp (ie, one in which the corp has a right,interest, or expectancy) without 1st giving the corp achance to act.
![Page 3511: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3511.jpg)
Q1756.- What's the basic corp liab?
![Page 3512: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3512.jpg)
A1756.- A corp is liable on the contracts of it's employees & inparticular situations, for torts committed by employees.
![Page 3513: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3513.jpg)
Q1757.- Can a corp be liable on preincorp contracts entered intoon behalf of the corp by the promoter?
![Page 3514: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3514.jpg)
A1757.- Gen'ly no! can become liable however by adoption.
![Page 3515: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3515.jpg)
Q1758.- Explain continuing promoter liab.
![Page 3516: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3516.jpg)
A1758.- Even if the corp adopts the contract, the promoterremains personally liability unless one of the followingoccurs:- 1. they state in the contract that he/she are not personallyliable- 2. a novation occurs when a 3rd party creditor agrees tolook to the corp for satisfaction of the contract, therebyreleasing promoter.
![Page 3517: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3517.jpg)
Q1759.- Who are incorporators?
![Page 3518: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3518.jpg)
A1759.- They sign the AOI. Genly same person as promoter.
![Page 3519: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3519.jpg)
Q1760.- When do preincorp subs become binding?
![Page 3520: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3520.jpg)
A1760.- Gen'ly courts have held that a subscription for shares in acorp not yet formed is an unenforceable contract due tothe lack of parties. Therefore, some act of acceptance bythe corp, after incorporation is req'd b4 preincorpsubscription agreements will become binding.
![Page 3521: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3521.jpg)
Q1761.- What's ultra vires?
![Page 3522: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3522.jpg)
A1761.- These are acts by the corp or it's management that arebeyond the scope of corp authority as granted by it'scharter, bylaws, or state laws.
![Page 3523: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3523.jpg)
Q1762.- Do conditional subscriptions need to be in writing?
![Page 3524: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3524.jpg)
A1762.- yes!
![Page 3525: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3525.jpg)
Q1763.- Can capital be contributed in the form of $, prop or svcs?
![Page 3526: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3526.jpg)
A1763.- Yes!
![Page 3527: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3527.jpg)
Q1764.- What's sec rule 10b-5?
![Page 3528: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3528.jpg)
A1764.- Unlawful to:- 1. employ any device or scheme to defraud- 2. make untrue statements of mat'l fact- 3. any fraud activity in the purch or sale of any security ininterstate commerce
![Page 3529: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3529.jpg)
Q1765.- What are corps express powers?
![Page 3530: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3530.jpg)
A1765.- A corp has the express power to perform any actauthorized by state law, AOI or the bylaws.
![Page 3531: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3531.jpg)
Q1766.- What are 4 particular powers that a corp may have but notimplied due to public policy considerations?
![Page 3532: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3532.jpg)
A1766.- 1. Gifts- 2. P/S- 3. Surety- 4. Acquiring & reacquiring shares
![Page 3533: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3533.jpg)
Q1767.- What's an AC?
![Page 3534: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3534.jpg)
A1767.- The AC is an operating committee of board members whoare independent of the corp.
![Page 3535: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3535.jpg)
Q1768.- What's a subscription agreement?
![Page 3536: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3536.jpg)
A1768.- It's a contract by which the subscriber agrees to purchasea # of shares of corp stock at a sub price specified in theagreement.
![Page 3537: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3537.jpg)
Q1769.- Explain what an enforceable preincorp sub is?
![Page 3538: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3538.jpg)
A1769.- if INDIVIDUALS agreed to subscribe to corp stock & itappears that each parties promise was dependent on theother parties also subscribing, then an enforceablecontract exists. The subscription is enforceable NOT btwthe corp & each subscriber, but rather among thesubscribers themselves!
![Page 3539: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3539.jpg)
Q1770.- When are subscriptions binding for sure?
![Page 3540: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3540.jpg)
A1770.- Post-incorp subs! Any agreement after the corp is formedconstitutes a binding obligation to sell or purchase stock.
![Page 3541: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3541.jpg)
Q1771.- Does the AOI have to specify the types & # of shares acorp may issue?
![Page 3542: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3542.jpg)
A1771.- yes! can't issue greater amt!
![Page 3543: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3543.jpg)
Q1772.- What's a foreign corp?
![Page 3544: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3544.jpg)
A1772.- One that does bus in any state except the 1 in which it isincorporated.
![Page 3545: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3545.jpg)
Q1773.- What is sec rule 16b?
![Page 3546: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3546.jpg)
A1773.- Insider Trading - applies to officers, directors & holders ofmore than 10% of the stock.
![Page 3547: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3547.jpg)
Q1774.- What are 4 examples of implied powers?
![Page 3548: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3548.jpg)
A1774.- 1. power to sue & be sued in the corporate name- 2. power to make or amend corp bylaws- 3. power to acquire, mortgage & transfer prop for corppurposes- 4. power to issue corp bonds
![Page 3549: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3549.jpg)
Q1775.- Do directors need to be stakeholders?
![Page 3550: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3550.jpg)
A1775.- No
![Page 3551: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3551.jpg)
Q1776.- what's legal capital (state capital)?
![Page 3552: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3552.jpg)
A1776.- The # of shares issued times their par value or statedvalue. This fund primarily is reserved for the payment ofcreditors in the event of a liquidation. Dividends may NOTcome from this source!
![Page 3553: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3553.jpg)
Q1777.- What has to be publicly filed? bylaws or AOI?
![Page 3554: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3554.jpg)
A1777.- AOI
![Page 3555: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3555.jpg)
Q1778.- Who sets forth the measure of liability to be borne by acorp with regard to it's issued securities.
![Page 3556: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3556.jpg)
A1778.- UCC!
![Page 3557: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3557.jpg)
Q1779.- what's a defacto corp?
![Page 3558: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3558.jpg)
A1779.- Did not comply substantially with mandatory req's. Thisstatus forces 3rd parties to perform on corp contracts &shields stakeholders from direct liab!
![Page 3559: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3559.jpg)
Q1780.- Can a corp place certain restrictions on the transfer ofstock?
![Page 3560: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3560.jpg)
A1780.- yes- 1. right of 1st refusal- 2. has to be noted on face of stock- 3. restrictions must be reasonable
![Page 3561: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3561.jpg)
Q1781.- What are the essential elements of a defacto corp?
![Page 3562: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3562.jpg)
A1781.- 1. a valid statute under which the bus could have been inclegally- 2. existence of a corp charter- 3. a good faith effort to incorporate- 4. some good faith business dealings in the corp name
![Page 3563: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3563.jpg)
Q1782.- Does a corp recognize a taxable g or L for thecontributions of prop by stakeholders?
![Page 3564: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3564.jpg)
A1782.- No!- 1. If tax free to s/h, corps basis is the same as there's- 2. If gain recognized by s/h, corp adds the gain to thebasis
![Page 3565: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3565.jpg)
Q1783.- What's a corp by estoppel?
![Page 3566: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3566.jpg)
A1783.- In the absence of even a defacto corp, many courts haveprotected stakeholders from 3rd party suits still. If the 3rdparty believed they were dealing with a corp, the crts willnot allow the 3rd party to hold the stakeholders liable onthe contract.
![Page 3567: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3567.jpg)
Q1784.- what are the bylaws?
![Page 3568: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3568.jpg)
A1784.- They are the rules & regs that govern the internalmanmgmt of a corp.
![Page 3569: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3569.jpg)
Q1785.- What's a dejure corp?
![Page 3570: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3570.jpg)
A1785.- Under common law, any corp that substantially complieswith the mandatory statutory req's of incorporation isdeemed dejure and it's status cant be attacked by anyoneincluding the state.
![Page 3571: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3571.jpg)
Q1786.- What's a quo warranto proceeding?
![Page 3572: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3572.jpg)
A1786.- Suit challengin the corp existence.
![Page 3573: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3573.jpg)
Q1787.- Explain what noncorp status is.
![Page 3574: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3574.jpg)
A1787.- Gen'ly if corp fails to meet any of the protection status, itmay be attacked by anyone. Stakeholders are liable here!
![Page 3575: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3575.jpg)
Q1788.- What's the def of contributed cap.
![Page 3576: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3576.jpg)
A1788.- The total amount paid for stock when issued, stated capplus paid in surplus.
![Page 3577: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3577.jpg)
Q1789.- Explain consideration for it's shares.
![Page 3578: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3578.jpg)
A1789.- a corp may only receive certain types & quantities ofconsideration for it's shares.
![Page 3579: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3579.jpg)
Q1790.- Explain the legality of a stock transfer.
![Page 3580: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3580.jpg)
A1790.- Can be transferred by endorsement & delivery. If a stockcertificate is endorsed in blank, it may be transferred bydelivery alone. A transfer becomes legally effective againstthe corp only when the security is presented to the corp, ora duly appointed agent for registration.
![Page 3581: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3581.jpg)
Q1791.- How is a taxable G or L calculated for stock purchased ortraded to a s/h that don't have immediate control (80%rule)?
![Page 3582: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3582.jpg)
A1791.- FMV minus the basis of prop exchanged for the stock.
![Page 3583: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3583.jpg)
Q1792.- What's respondeat superior?
![Page 3584: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3584.jpg)
A1792.- The prin is vicariously liable (liable regardless of whethers/he is at fault) for the torts of an agent if they arecommitted within the scope (actual or apparent) of theagency.
![Page 3585: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3585.jpg)
Q1793.- When is respondeat superior not valid against prin?
![Page 3586: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3586.jpg)
A1793.- If the agent departs from the performance of her/hisduties & acts on their own. It's usually to benefitthemselves.
![Page 3587: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3587.jpg)
Q1794.- Does the promoter have to comply with SEC Act of 1933?
![Page 3588: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3588.jpg)
A1794.- Yes! The act req's the filing of a registration statementwith the SEC if securities are to be offered through the mailor through some other means of interstate commerce.Also, each potential purchaser must be provided with aprospectus.
![Page 3589: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3589.jpg)
Q1795.- What are some common situations that would make acourt pierce the corp veil?
![Page 3590: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3590.jpg)
A1795.- 1. Corp Fraud or corp was formed to do illegal stuff- 2. Undercapitalization- 3. Sub Corp- 4. Loans
![Page 3591: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3591.jpg)
Q1796.- Binding contracts brief outline.
![Page 3592: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3592.jpg)
A1796.- If principle is:- 1. disclosed - P- 2. partially disclosed - P & A- 3. undisclosed - A only!
![Page 3593: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3593.jpg)
Q1797.- Can a fully undisclosed prin ratify?
![Page 3594: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3594.jpg)
A1797.- No! Must be fully or partially disclosed! Also, prin was inexistence at the time the act was done!
![Page 3595: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3595.jpg)
Q1798.- If a 3rd party withdraws b4 ratification, can prin stillratify?
![Page 3596: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3596.jpg)
A1798.- No
![Page 3597: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3597.jpg)
Q1799.- Can the law create an agency relationship?
![Page 3598: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3598.jpg)
A1799.- Yes.- 1. Estoppel- 2. Rep, Appearance, AA- 3. Necessity
![Page 3599: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3599.jpg)
Q1800.- When does a prin not have the right nor power to revokethe agency?
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A1800.- If it's an "agency coupled with an interest"!
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Q1801.- What can be ratified, a tort or a crime?
![Page 3602: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3602.jpg)
A1801.- Tort!
![Page 3603: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3603.jpg)
Q1802.- Once ratification occurs, what happens as to the liabilityof the agent?
![Page 3604: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3604.jpg)
A1802.- It goes away!- 1. Prin cant charge agent with exceeding it's authority &3rd party can't hold them liable for breach of warranty ofauthority.- 2. Prin cant retract ratification.
![Page 3605: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3605.jpg)
Q1803.- Does notice of an agency termination need to be given?
![Page 3606: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3606.jpg)
A1803.- Yes! unless terminated by operation of law!- 1. Actual Notice- 2. Constructive Notice (publication)
![Page 3607: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3607.jpg)
Q1804.- What are 4 ex of an agency relationship that getsterminated by law?
![Page 3608: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3608.jpg)
A1804.- 1. death or insanity by either partner- 2. bankruptcy or insolvency of the prin- 3. bankruptcy of the agent if it affects the agencyrelationship- 4. illegality or impossibility
![Page 3609: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3609.jpg)
Q1805.- What are a few things that a s/h is liable for?
![Page 3610: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3610.jpg)
A1805.- 1. "watered stock" if less than lawful consideration- 2. unpaid portion of their stock subscription contract- 3. illegal dividends, whether known or unknown, s/h isliable for repayment ONLY to an INSOLVENT corp!
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Q1806.- What's the proc for a merger or cons?
![Page 3612: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3612.jpg)
A1806.- 1. BOD approves- 2. S/H approves- 3. State filing- 4. Certificate Issued- 5. Appraisal rights- 6. Short-form mergers
![Page 3613: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3613.jpg)
Q1807.- What's a SF merger?
![Page 3614: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3614.jpg)
A1807.- When one corp owns more than 90% of sub, only BOD ofparent corp needs to approve merger!
![Page 3615: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3615.jpg)
Q1808.- Explain an involuntary dissolution.
![Page 3616: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3616.jpg)
A1808.- May be brought about by an individual or the state.- 1. Quo Warranto Action - if corp exceeds it's authority,state can bring action for diss!- 2. S/h action - can bring action if BOD did fraud, waste ordeadlocked!- 3. Misc grounds - diss of a corp may arise by expiration ofthe time period set out in the charter, cons or merger.
![Page 3617: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3617.jpg)
Q1809.- Who are NOT allowed to be stakeholders of an s-corp?
![Page 3618: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3618.jpg)
A1809.- 1. Nonresident aliens- 2. Corps- 3. Foreign trusts
![Page 3619: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3619.jpg)
Q1810.- Is an agent liable to the prin for losses cuz of there ownnegligence?
![Page 3620: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3620.jpg)
A1810.- yes!
![Page 3621: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3621.jpg)
Q1811.- What duties can one NOT be able to appoint an agent?
![Page 3622: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3622.jpg)
A1811.- 1. Those that the prin has to perform personally!- 2. Those precluded by statute.- ex. execution of will- 3. Those that the prin CANT perform! ex. a minor cantappt an agent to convey real estate since the minor canvoid the conveyance!
![Page 3623: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3623.jpg)
Q1812.- What are the prins duties to an agent?
![Page 3624: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3624.jpg)
A1812.- 1. Comp for svcs- 2. Reimbursement of expenses- 3. Indemnification - to imdemnify the agent against lossor liability for acts performed at the prins direction, unlessthey are unlawful.- 4. Compensation for injury
![Page 3625: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3625.jpg)
Q1813.- What's A + B = A
![Page 3626: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3626.jpg)
A1813.- Merger
![Page 3627: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3627.jpg)
Q1814.- What's transfer pricing?
![Page 3628: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3628.jpg)
A1814.- Transer pricing is the process of establishing prices usedbtw related parties (typically divisions of the samecompany) for loans, sales or leases of tangible pp,licensing of intangibles & the sale of svcs. This is in effortto increase/decrease income in certain segments for taxpurposes.
![Page 3629: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3629.jpg)
Q1815.- Explain unemployment & inflation.
![Page 3630: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3630.jpg)
A1815.- ST (philips) - inverse relationship- LT - little to no relationship
![Page 3631: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3631.jpg)
Q1816.- What's the full employment act of 1964?
![Page 3632: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3632.jpg)
A1816.- US Gov't justified entering a mkt in which mkt forces donot allocate resources efficiently.
![Page 3633: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3633.jpg)
Q1817.- What are the 2 prin's taxes are based on?
![Page 3634: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3634.jpg)
A1817.- 1. ability to pay (progressive tax system)- 2. derived benefit (like prop taxes paying for trashremoval)
![Page 3635: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3635.jpg)
Q1818.- What's intergenerational inequity?
![Page 3636: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3636.jpg)
A1818.- If debt-financed expenditures have no future benefit,intergenerational inequity results. Intergenerationalinequity is when one generation pays for a diff generationsbenefit.
![Page 3637: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3637.jpg)
Q1819.- Diff btw public and private sectors?
![Page 3638: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3638.jpg)
A1819.- Sweater is a private good, only benefits buyer of sweater.- Law Enforcement - public good
![Page 3639: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3639.jpg)
Q1820.- What's a VAT?
![Page 3640: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3640.jpg)
A1820.- Each entity in production & distribution chain pays tax onthe diff btw its sales & purchases. Consumers ultimatelybear the incidence of a VAT. Under a VAT structure, allentities pay tax, regardless of income. A VAT tax is held toencourage savings because only consumption is taxed(not consumption & savings as the case with an incometax)!
![Page 3641: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3641.jpg)
Q1821.- What does absolute adv mean?
![Page 3642: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3642.jpg)
A1821.- Abs adv for a good exists when the cost of producing thatgood in one country is less than the cost of producing thatgood in another country.
![Page 3643: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3643.jpg)
Q1822.- What are the 3 types of unemployments?
![Page 3644: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3644.jpg)
A1822.- Frictional - due to labor mkt mechanics, time btw jobs- Structural - aggregate demand is equal to aggregatesupply, but the nature of the supply don't match the natureof the demand! Mismatch!- Cyclical - aggregate demand is less than the supply
![Page 3645: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3645.jpg)
Q1823.- Explain increasing returns to scale.
![Page 3646: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3646.jpg)
A1823.- When inputs triple, but outputs more than triple!- As most entities expand output, avg costs of productiondecline due to better use, including specialization ofresources: management, labor & equip.
![Page 3647: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3647.jpg)
Q1824.- When will an entity profit from additional resources used?
![Page 3648: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3648.jpg)
A1824.- To the pt at which marg rev product = marg resource cost
![Page 3649: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3649.jpg)
Q1825.- What's the clayton act?
![Page 3650: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3650.jpg)
A1825.- Prohibits mergers if the resulting corp would tend tolessen competition. Also prohibits price discrimination &prohibits director's in common btw 2 competing corps.(1914)
![Page 3651: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3651.jpg)
Q1826.- What's the robinson-patman act?
![Page 3652: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3652.jpg)
A1826.- Prohibits discounts that are not based on costdifferences to large purchasers. (1936)
![Page 3653: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3653.jpg)
Q1827.- What are historical costs?
![Page 3654: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3654.jpg)
A1827.- Actual expenditures made in producing a product.
![Page 3655: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3655.jpg)
Q1828.- What's the diminishing marginal utility prin?
![Page 3656: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3656.jpg)
A1828.- Equal increments of additional consumption of a goodprovide smaller & smaller additional units of utility. Forinstance, the 1st pair of shoes provides more utility thanthe 101st.
![Page 3657: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3657.jpg)
Q1829.- What are implicit costs?
![Page 3658: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3658.jpg)
A1829.- Implicit costs are amts that would have been received ifresources had been used for other purposes.
![Page 3659: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3659.jpg)
Q1830.- What's normal profit?
![Page 3660: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3660.jpg)
A1830.- Normal profit is the cost of keeping entrepreneurial skillsin the org! Also called the opportunity cost of using theowner's own resources.
![Page 3661: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3661.jpg)
Q1831.- What are the basis for decisions?
![Page 3662: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3662.jpg)
A1831.- Marginal Factors! Always what happens by increasingsomething by one unit!
![Page 3663: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3663.jpg)
Q1832.- 3 kinds of returns to scale are?
![Page 3664: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3664.jpg)
A1832.- Increasing - If all outputs are changed by a factor greaterthan the factor that changes inputs, returns to scaleincreases!- constant - changes are the same for both- decreasing - opposite of increasing
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Q1833.- What's the sherman act?
![Page 3666: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3666.jpg)
A1833.- Prohibits trade restraint in interstate & foreign trade,including price fixing, boycotts, agreements to divide mkts& resale restrictions. (1890)
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Q1834.- What's the celler-kefauver anti-merger act?
![Page 3668: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3668.jpg)
A1834.- Prohibits acquiring competitors assets if the result wouldtend to lessen competition. (1950)
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Q1835.- Explain what happens in the mkt with shortages &surplus.
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A1835.- When a shortage exists, the mkt price will rise & quandemanded will decrease, eliminating the shortage. When asurplus exists, the mkt price will decrease & quandemanded will increase, eliminating the surplus.
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Q1836.- What's economic cost?
![Page 3672: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3672.jpg)
A1836.- Economic cost is the income that an entity must providein order to attract resource suppliers.
![Page 3673: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3673.jpg)
Q1837.- Briefly explain the impact of shifts in demand & supply.
![Page 3674: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3674.jpg)
A1837.- An increase in demand when supply don't change willincrease mkt price. Decrease opposite.- If both increase, the output quantity will increase with anindeterminate effect on mkt price.- Say demand increases but supply decreases, the mktprice will increase & an indeterminate effect on outputquantity.
![Page 3675: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3675.jpg)
Q1838.- What's economic profit?
![Page 3676: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3676.jpg)
A1838.- Economic profit is total revenue less all economic costs.When economic profit is zero, the firm is earning just anormal profit or normal rate of return.
![Page 3677: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3677.jpg)
Q1839.- What's cross-elasticity of demand?
![Page 3678: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3678.jpg)
A1839.- It measures responsiveness of demand to changes inprice of another good.- Exy
![Page 3679: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3679.jpg)
Q1840.- What are production factors also called?
![Page 3680: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3680.jpg)
A1840.- Inputs
![Page 3681: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3681.jpg)
Q1841.- What's the price elasticity of demand formula?
![Page 3682: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3682.jpg)
A1841.- % change in quan demanded / % in price
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Q1842.- What's the utility theory?
![Page 3684: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3684.jpg)
A1842.- That an individuals goal is to maximize the total utilityfrom avail income. Pants & shoes ex!
![Page 3685: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3685.jpg)
Q1843.- What's GDP?
![Page 3686: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3686.jpg)
A1843.- The total mkt value of all final goods & svcs producedwithin a specified country. To avoid multiple counting ofthe same production, either only the value added to goodsat each production stage is counted or only the final goodsare counted.- ex. an aircraft engine typically would not be a final good
![Page 3687: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3687.jpg)
Q1844.- What are 7 leading indicators?
![Page 3688: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3688.jpg)
A1844.- 1. Avg hrs worked per wk by manufacturing workers- 2. Initial unemployment claims- 3. Stock prices- 4. Raw mat'l price change- 5. Residential bldg permits- 6. Vendor delivery times & unfilled durable orders- 7. $ supply changes
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Q1845.- What's an example of a vertical merger?
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A1845.- Merger along a supply chain.- ex. an iron mine & a steel manufacturer- Horizontal would be 2 entities that are competitors!
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Q1846.- What's the def of a peak in a bus cycle?
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A1846.- A peak is characterized by high levels of economicactivity & full use of resources.
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Q1847.- What's a cartel?
![Page 3694: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3694.jpg)
A1847.- A group of oligopolistic firms intentionally joining to fixprices.- ex. OPEC
![Page 3695: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3695.jpg)
Q1848.- What's disposable income?
![Page 3696: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3696.jpg)
A1848.- Personal income less personal income taxes. Disposableincome is divided btw consumption, int payments &savings!
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Q1849.- What tends to offset monopolistic behavior?
![Page 3698: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3698.jpg)
A1849.- Foreign competition!
![Page 3699: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3699.jpg)
Q1850.- What's national income?
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A1850.- NDP plus a country's NI earned abroad less indirect bustaxes.
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Q1851.- What's "The Common" (externalities)
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A1851.- Assets used in common may suffer poor maintenance.The damage to common assets are called externalities asthe cost is external to the abusers!
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Q1852.- What's it called when demand & supply intersect on agraph?
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A1852.- Mkt equilibrium!
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Q1853.- In all the E (elasticity) formulas, what's common in thenumerator?
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A1853.- % change in quantity (either demanded or supplied)!
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Q1854.- Explain the cross-elas coefficient.
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A1854.- Exy = if +, goods are sub's, if -, goods are complements, if0, goods are unrelated!
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Q1855.- Explain the accelerator theory.
![Page 3710: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3710.jpg)
A1855.- Accelator theory states that cap investment is related tothe rate of change in national income.- ex. an increase in cap investments is the only way tomeet any increased demand. The process of investing tomeet demand continues to accelerate. Once a recovery isstarted, it creates a momentum that continues for sometime.
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Q1856.- What business or industries that perform much betterthan avg during expansions & much worse than avgsduring recessions called?
![Page 3712: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3712.jpg)
A1856.- Cyclical!
![Page 3713: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3713.jpg)
Q1857.- What's real per-captia output?
![Page 3714: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3714.jpg)
A1857.- GDP / by population, adj 4 inflation. It is used as ameasure of the standard of living.
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Q1858.- What's personal income?
![Page 3716: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3716.jpg)
A1858.- National income plus transfer payments (such as corpprofit distributions & ss benefits) less both corp inc taxes& undistributed profits & less ss contributions!
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Q1859.- What's GNP?
![Page 3718: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3718.jpg)
A1859.- The total mkt value of all goods & svcs produced withresources froma specified country, not necessarily withinits borders.
![Page 3719: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3719.jpg)
Q1860.- What's a conglomerate?
![Page 3720: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3720.jpg)
A1860.- A merger of 2 entities in diff mkts!- ex. steel manufacturer & computer manufacturer
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Q1861.- What is price leadership?
![Page 3722: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3722.jpg)
A1861.- In an oligopoly, a major firm announces a price change &other mkt members match it!
![Page 3723: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3723.jpg)
Q1862.- In monopolistic competition, what's profit maximization?
![Page 3724: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3724.jpg)
A1862.- Each producing entity equates marginal rev with marginalcost unless price is less than avg variable cost. If cost isless than avg variable cost, an entity ceases production.
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Q1863.- Give the basics of the demand curve.
![Page 3726: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3726.jpg)
A1863.- deman on x-axis, as price increase demand decreases.An increase in demand is a shift to the right.
![Page 3727: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3727.jpg)
Q1864.- Explain the elasticity coefficient.
![Page 3728: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3728.jpg)
A1864.- If the absolute value of Ed is greater than 1, demand isclassified as elastic, less than 1 it's inelastic, and = 1 isclassified as having unitary elasticity.
![Page 3729: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3729.jpg)
Q1865.- How does expectations influence demand?
![Page 3730: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3730.jpg)
A1865.- Positively! ex. if cons expect prices to go up, or inflation,they buy more now!
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Q1866.- Explain surplus (economic rent).
![Page 3732: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3732.jpg)
A1866.- Surplus or ER is deemed earned when an input is paid orpurchased for higher amt than the next highest bidder-consumer of that input would pay.- ex. a muscian earns 500k as a rock star. His alternativework would be a cashier for 20k. ER is 480K.
![Page 3733: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3733.jpg)
Q1867.- What's the def of CE of demand?
![Page 3734: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3734.jpg)
A1867.- Closely related goods influence deman.- 1. Subs- 2. Complements
![Page 3735: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3735.jpg)
Q1868.- What's always on the y-axis?
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A1868.- $
![Page 3737: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3737.jpg)
Q1869.- What's the def of demand?
![Page 3738: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3738.jpg)
A1869.- Demand is the amt of a good that consumers as a groupwill (are willing and able to) purchase at a given priceduring a given time period. Demand analysis concentrateson cons behavior!
![Page 3739: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3739.jpg)
Q1870.- What's the law of supply?
![Page 3740: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3740.jpg)
A1870.- The price & quantity of a good are related directly, that is,the greater the price, the greater the supply!
![Page 3741: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3741.jpg)
Q1871.- What are some things that can increase demand?
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A1871.- 1. Increase in sub's price or decrease in complementsprice for normal goods.- 2. Increase in cons inc for normal goods.- 3. Decrease in cons inc for inferior goods.- 4. Expected future price increases
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Q1872.- What's the def of price elasticity of demand?
![Page 3744: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3744.jpg)
A1872.- It measures responsiveness of demand to changes inprice. If demand is elastic, demand will fluctuate as theprice changes!
![Page 3745: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3745.jpg)
Q1873.- How does income influence demand?
![Page 3746: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3746.jpg)
A1873.- 1. Normal goods - positive relationship- 2. Inferior goods - negative- ex. as income increases so does the demand for normalgoods!
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Q1874.- What's the def of elasticity?
![Page 3748: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3748.jpg)
A1874.- The measure of how responsive the mkt is to change in adeterminant.
![Page 3749: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3749.jpg)
Q1875.- What's the relationship btw price & quantitiy demanded?
![Page 3750: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3750.jpg)
A1875.- Inverse
![Page 3751: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3751.jpg)
Q1876.- How does the future expected price of a good affectsupply currently?
![Page 3752: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3752.jpg)
A1876.- An increase in the expected future price for goodincourages firms to supply less now!
![Page 3753: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3753.jpg)
Q1877.- What's communism?
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A1877.- Resources are owned by the state & most decisions aremade by the state.
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Q1878.- What's the def of supply?
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A1878.- Amt of a good that producers as a group will (are willingand able to) supply at a given period of time.
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Q1879.- How is the gen'l price level related to the purchasingpower of $?
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A1879.- Inversly!
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Q1880.- What's a balanced budget?
![Page 3760: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3760.jpg)
A1880.- Taxes = Gov't Expenditures
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Q1881.- What's a margin req't?
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A1881.- When the fed req's a min down payment that applies tosecurities.
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Q1882.- What's the monetarist theory?
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A1882.- A steady, restrained growth of $ supply is moresignificant than fiscal policy on economic activity, inflation& employment.- Inflation - in the long run, excessive increases in the $supply cause inflation. Inflation can be controlled only byrestricting $ supply growth.
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Q1883.- Explain the open-mkt Op's of monetary control.
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A1883.- Purch and sell gov't debt- 1. Selling - decreases $ supply by taking it fromcirculation- 2. Purchase - opposite!
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Q1884.- What's a multiplier coefficient?
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A1884.- Any increase in autonomous investment, consumption, orgov't spending results in a multiplied increase in nationalincome. The same income is spent several times. Theimpact of this effect is determined by the marginalpropensity to save (MPS).
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Q1885.- What's a disc rate?
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A1885.- When banks borrow from fed. Lowering the discount rateencourages borrowing & increases the money supply.
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Q1886.- What's the model of closed economy?
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A1886.- In a simple economy without a gov't,a money mkt or int'ltrade, equilibrium income occurs when aggregate savingsequals aggregate investment. In other words, equilibriumincome occurs when aggregate demand (consumption &investment) equals aggregate supply. With gov't - taxes &gov't expenditures play a factor!
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Q1887.- What are 3 examples of near money?
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A1887.- 1. Gov't sec's- 2. Nonchecking saving deposits- 3. Time deposits
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Q1888.- What are the 3 components of investment?
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A1888.- 1. Residential Const- 2. Inventories- 3. P & E
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Q1889.- Brief explanation of monetary policy is?
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A1889.- Monetary policy is policy intended to control the moneysupply. Control of money supply growth is deemedessential to control inflation, spending & credit availability.Stable int rates & monetary control are mutually exclusivegoals. The Fed focuses sometimes on int rates &sometimes on $ supply.
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Q1890.- What are some things that can increase/decreaseinvestment?
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A1890.- High tech growth - Increase- Real Int Decline - Increase- High Cap Good Stock - decrease- Higher acq & maint - decrease
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Q1891.- What's the supply side theory?
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A1891.- Cutting taxes stimulates work, savings & investments &restores incentive to the economy.
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Q1892.- What's the PPF?
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A1892.- All the possible combo's of output, with all the otherfactors held constant.
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Q1893.- What's the neo-keynesian theory?
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A1893.- Fiscal policy influences econ activities, but excessivemonetary growth leads to inflation.
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Q1894.- Explain how a shift or inflation is in the PPF.
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A1894.- 1. Shift - outward shift is called economic growth, anation can have more output. Change in the PPF arecaused by changes in resources (land, labor, cap, etc.) ortechnology.- 2. Inflation - If production is at the PPF boundary &demand increases, consumers will bid up prices of goods.
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Q1895.- What's the fwd exchange rate?
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A1895.- The fwd exchange rate is the rate agreed to be paid in thefuture. The diff btw the spot rate & the fwd exchange rate iscalled a discount or premium. If fwd is more than spot, it'sa premium!
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Q1896.- What's the basics of keynesian economics?
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A1896.- Keynesian economics holds the theory that an economycan be in equilibrium at less than full employment.Keynesian economics focuses on spending & fiscal policy(gov't stuff) as determinates of economic activity.
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Q1897.- What's hedging?
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A1897.- It's a risk avoidance technique! Hedging involvesoffsetting a G or L on rec/pay denominated in foreigncurrencies by purchasing or selling fwd exhangecontracts. Buying these contracts covers liability in theforeign currency, selling covers rec!
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Q1898.- What's in the capital or current accts?
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A1898.- Current - bal of goods & svcs, net int & dividends, & netunilateral transfers!- Capital - tracks cash flows resulting from the exchange offixed or financial assets.
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Q1899.- What are 3 things that measure inflation?
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A1899.- 1. CPI - comparison of the items price in a "typical"shopping cart to a base value.- 2. WPI - same as above except wholesale quantities.- 3. GDP Deflator
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Q1900.- Explain factor endowment.
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A1900.- The Heckscher-Ohlin theory states that regionaldifferences in efficiency occur because of diff in supply ofprod factors: land, labor, & cap! For ex, farming is favoredby a slowly moving river as a reliable irrigation source, butmanufacturing is favored by a swiftly moving river as apower source.
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Q1901.- What's the basics of classical economies?
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A1901.- Classical economics theory holds that an economy is inequilibrium at full employment, the economy generates &maintains full employment over the long run withoutartificial (gov't) intervention due to price & wage flexibility.
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Q1902.- What's the demand-pull theory?
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A1902.- Inflation is caused by xs aggregate demand for goods &svcs. Usually xs aggregate demand is deemed to be due toexpansionary fiscal policy (additional gov't expenditures).
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Q1903.- Give examples of capital, labor & land intensive goods.
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A1903.- Cap intensive - req's high level of investment, like aconstruction plant to build an aircraft.- Labor intensive - req's high level of labor, for ex. the laborinvolved in making computer programs.- Land intensive - ex. land involved in beef production.
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Q1904.- What's the spot rate?
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A1904.- It's the rate paid for currency now!
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Q1905.- What's an export incentive?
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A1905.- Subsidies are gov't payments to producers, typically in aprotected industry. Indirect subsidies, or incentives,include favorable tax treatment on export-related income.This practice might have similar effects on the foreigncountry as import quotas or tariffs.
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Q1906.- What's the purpose of trade barriers?
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A1906.- Trade restrictions exist due to many factors. An exportingcountry may allow conditions that are not permitted in acountry that would otherwise import goods from thatexporting country.
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Q1907.- What's sovereignty risk?
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A1907.- Sov risk is risk of significant restrictions on removal ofthe investment, either as dividends or sale of theoperations, including nationalization.
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Q1908.- When does currency appreciate or depreciate?
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A1908.- Currency appreciates when it can buy more units ofanother currency & depr's when it can buy fewer units ofanother currency.
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Q1909.- Give 3 reasons against free trade.
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A1909.- 1. Incubate infant industry - one argument is that acountry has a comparative adv in the long run, but atemporary disadvantage!- 2. Protect local jobs from cheap foreign labor!- 3. Fair competition tariff - an import tariff that brings thecost of imported goods up to the domestic price level.
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Q1910.- Explain current & capital in int'l payments.
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A1910.- Int'l payments - imports, exports, debt or equityinvestments - rarely net to 0! The balance of payments (thedef or surplus) typically is tracked in 2 prin accts - currentor capital!
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Q1911.- What's comparative adv?
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A1911.- Comp adv for a good exists when the opportunity cost ofproducing that good is less than the cost of producingother goods in the same country compared to anothercountry.
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Q1912.- What's a trade barrier?
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A1912.- Usually, the effect of trade barriers is to keep resources(land, labor, cap, etc) in less efficient protected industriesrather than move the resources to relatively efficientindustries.
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Q1913.- Which goods do countries tend to export?
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A1913.- Goods in which they have a comparative adv! For ex in amodel with only labor, land & cap as production factors,countries with a relative abundance of labor will importcap-intensive goods & land intensive goods & export laborintensive goods!
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Q1914.- Barrier vs free trade?
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A1914.- Barrier support - competition costs are obvious!- Free Trade Support - competition benefits are lessobvious!
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Q1915.- What are 4 impacts of inflation?
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A1915.- 1. Discourages saving- 2. Restricts Lending- 3. Strained relationships (uncertainty with LT contracts)- 4. Wealth redistribution (debtors repay with less valuabledollars, pensions pay out less valuable $, etc)
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Q1916.- What's the cost-push theory of inflation?
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A1916.- Inflation is caused when increased product costs arepassed on the the consumers in the form of higher prices.Labor unions are considered the primary source of thesecosts.
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Q1917.- What's the 4 objectives of the EU?
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A1917.- 1. Establish euro citizenship- 2. Ensure freedom, security & justice- 3. Promote economic & social progress- 4. Assert Europes role in the world
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Q1918.- Explain what happens when an exchange rate is setabove the mkt equilibrium price.
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A1918.- There's a surplus! More people are willing to supply thanthere is demand & a deficit of payments results!
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Q1919.- Call vs Put.
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A1919.- Call - Buy- Put - Sell
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Q1920.- What's exercise value?
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A1920.- The exercise value is the diff in the mrkt price and theexercise price times the # of shares each warrant allowsthe warrant holder to purchase at the exercise price. Anoptions actual value is the market price.
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Q1921.- What's the ex dividend date?
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A1921.- To avoid conflict because of a delay btw an exchange &corporate receipt of notification of an exchange, the exdividend date is the date after which the right to thedividend is NOT transferred with the sale of stock.
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Q1922.- What's the formula for DFL?
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A1922.- DFL = EBIT / (EBIT - Int)
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Q1923.- Briefly explain how stock price rises & falls.
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A1923.- Expected stock prices first rise as a corp begins toborrow, peaks, & then declines as debt becomesexcessive. Since interest is tax deductible, a corp has agreater proportion of operating income flowing through toinvestors as debt increases, increasing stock prices.
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Q1924.- What's a warrant?
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A1924.- A warrant is an option to buy a specific amount of CS at astated price (the exercise price) usually within a specificperiod of time. A detachable warrant may be tradedseparately from the bond or preferred stock.
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Q1925.- What's the residual theory of dividends?
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A1925.- 1. Determine an optimal or target capital budget.- 2. Calculate the equity necessary to finance that capitalbudget.- 3. Suppy that equity from RE insofar as possible.- 4. Pay dividends to the extent RE exceed equity needed(in other words, leftover or residual earnings).
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Q1926.- What's an optimal cap structure?
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A1926.- An OCS maximizes the price of the stock by balancingrisks and returns. Also where the marginal tax shelterbenefits of the interest are equal to the marginalbankruptcy costs.
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Q1927.- Briefly explain what financial leverage is.
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A1927.- When a relatively small change in EBIT results in a largechange in CS return, a high degree of financial leverageexists. This results when a high % of the entity's financingis through fixed income securities: debt & preferred stock.Gen'ly the greater the financial leverage that exists, thegreater the bus risk will be!
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Q1928.- Briefly explain what operating leverage is.
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A1928.- When a relatively samll change in sales results in a largechange in operating income (or EBIT), a high degree ofoperating leverage exists. This results when a high % ofcosts are fixed! Gen'ly the greater the operating leveragethat exists, the greater bus risk will be!
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Q1929.- What's the formula for the degree of operating leverage?
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A1929.- DOL = Cont Marg / EBIT
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Q1930.- Why is bond interest risky to an issuer?
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A1930.- Unpaid bond interest could force an issuer intobankruptcy; undeclared dividends will NOT! Bond interestcontinues to accrue regardless of wheter the entitygenerates profits or $ to pay interest, potentiallymagnifying losses or cash shortfalls!
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Q1931.- 5 things used to determine an entity's risk are?
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A1931.- 1. Demand Variability - the more demand for an entitiesproducts is stable, the lower the entity's risk.- 2. Sales Price Volatility - degree at which sales priceschange, higher risk for entity.- 3. Input Price Volatility - higher's entity's risk!- 4. Sales Price Influence - the more a producer can chargehigher prices when inputs change the lower the risk for theentity.- 5. Operating Leverage - higher fixed costs are more riskyfor entity.
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Q1932.- What's coverage ratio and example?
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A1932.- Coverage is a measure of an issuer's ability to meetinterest & principal. The time-int-earned ratio (EBIT / intpayments) is an example.
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Q1933.- In liquidation who's claims have priority bondholder's orPS?
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A1933.- BONDHOLDERS!
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Q1934.- Are debenture bonds unsecured?
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A1934.- Yes. Also called junk! Bondholder's are like gen'lcreditors.
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Q1935.- What's a zero or low-coupon bond?
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A1935.- Offered below par & pays no annual interest. Usuallycompany's that make actuarial contracts such as pensionfunds & life insurance companies buy zero coupon bonds.They don't need to worry about investing the interest &principal payments.
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Q1936.- Explain indenture and trustee in bonds.
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A1936.- An indenture defines the rights & obligations ofbondholders & the issuer. A trustee represents thebondholders in ensuring the indenture terms are fulfilled.The SEC approves indentures & ensures indentureprovisions are met initially.
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Q1937.- Best Effort vs Underwritten Issues.
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A1937.- Best Effort - an investment bank doesn't guarantee thatsecurities will be sold.- Underwritten - an investment bank buys the issue at adiscount from the price at which they are offered to thepublic & resells them effectively guaranteeing that theissue will sell.
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Q1938.- Explain residual income.
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A1938.- The objective of maximizing residual income assumesthat as long as the accting unit earns a rate of return in xsof the imputed int charge on its avg invested capital.
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Q1939.- What's cost of capital?
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A1939.- An entity's cost of capital is equal to the weighted avg ofthe cost of debt, preferred & CS, & RE, with their marktvalues as weights.
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Q1940.- What's a restrictive covenant ratio?
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A1940.- A provision in an indenture or term loan contract thatrequires the debtor to meet certain financial standards.
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Q1941.- What are the 3 main types of LT fixed income securities?
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A1941.- 1. Term loans- 2. Bonds- 3. Preferred Stock
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Q1942.- What's Economic Value Added?
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A1942.- It's the Net Operating Profit after tax less the opportunitycost of capital.
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Q1943.- What's return on investment?
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A1943.- The return on investment measures the relationship ofprofit to invested capital for a unit of accountability. Thereturn on investment is increased when operating incomeincreases or when avg invested cap decreases.- DIRECT RELATIONSHIP WITH OPERATING INCOME!
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Q1944.- What are the adv & disadvantages of the NPV?
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A1944.- Adv - all of the CF's over the life of the project is used,including the estimated residual sales value of the project,the TM of $ is explicitly recognized & CF's are assumed tobe reinvested at the enterprises cost of capital.- Disadvantages - it don't estimate the projects rate ofreturn but merely tests the rate against a minimum rate.
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Q1945.- What are the adv & disadvantages of the IRR?
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A1945.- Adv - all of the CF's over the life of the project is used,including the estimated residual sales value of the project,the TM of $ is explicitly recognized & the projects rate ofreturn is estimated.- Disadvantages - CF's are assumed to be reinvested at therate earned by the project & it's more difficult to use thenother techniques.
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Q1946.- What are the advantages and disadvantages of thepayback period?
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A1946.- Advantages - based upon CF's, serves as a roughscreening device to determine the time to recoup initialinvestment, it's simple to understand & easy to compute.- Disadvantage - the TM of $ is ignored, not all the CF overthe life of the project is used - all CF beyond the paybackperiod for the investment is ignored & it don't measureprofitability.
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Q1947.- What are the advantages and disadvantages of theAccting Rate of Return on Avg Investment?
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A1947.- Adv - Understood easily- Disadvantage - It is based upon financial accountingincome that uses the accrual basis (cap budgetingdecisions gen'ly should rely on CF's) & it ignores the TM of$.
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Q1948.- What's the formula for the profitability index?
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A1948.- PI = PV of CF / Initial Investment
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Q1949.- What's the NPV?
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A1949.- It's PV of future cash inflows from the project MINUS thecost of the initial investment. A project that will earnexactly the desired rate of return will have a NPV of ZERO!A positive NPV identifies projects that will earn in xs of theminimum rate of return.
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Q1950.- What's the IRR?
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A1950.- This is the rate of interest that would make the PV of thefuture CF's from the project equal to the cost of the initialinvestment. Projects with a rate less than a minimum rate(or hurdle rate) set by the company are eliminated fromconsideration.
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Q1951.- What's payback period?
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A1951.- This is the length of time req'd to recover the initial cashoutflow from incremental cash benefits AFTER tax. Thus, ifwe have an investment of 10K that yields 4.5K each yr aftertax, it would take us 2.22 yrs (10/4.5) to recover the orginvestment from the cum net CF's!
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Q1952.- What's the Accounting Rate of Return on AvgInvestment?
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A1952.- This is the avg annual net income from the projectdivided by the avg investment in the project. Thenumerator is the avg annual increase in NI, NOT CF, sodepr and incremental inc taxes are SUBTRACTED!
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Q1953.- Independent vs Mutually Exclusvie.
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A1953.- A project is independent if it's projected CF's areunaffected by another projects existence. For independentprojects, NPV & IRR criteria lead to the same accept orreject decisions. In mutually exclusive NPV & IRR can givediff rankings. NPV ranking is usually more reliable.
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Q1954.- What's the current extensive use for derivatives?
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A1954.- 1. Volatile Markets- 2. Deregulation- 3. Emerging Technologies
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Q1955.- Explain the free component.
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A1955.- The credit received during the disc periods commonly iscalled free. A supplier has the cost of carrying receivablesduring that disc period & must pass that cost to the cust.Thus, the costs of the disc period credit is included in theform of higher base prices. However, unless a supplier willlower the base price for cash purchases, the discountperiod is free.
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Q1956.- When is depr EXCLUDED from certian calcs?
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A1956.- When income tax considerations are IGNORED!
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Q1957.- What's the purpose of Post-Project audit's?
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A1957.- 1. Supports refinement of future predictions.- 2. Improves the project implementation as animplementation team has incentive to make the projecthappen, for their reputations if nothing else, just becausethe team is aware of the post project audit.
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Q1958.- What are the categories of derivatives.
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A1958.- 1. Fwd Contracts- 2. Swap Contracts- 3. Option contracts based on int rates or currencies
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Q1959.- Explain the costly component.
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A1959.- "Costly" trade credits cost is an implicit cost = to forgonediscounts. Entities should use the costly component onlyafter determining that the cost of this credit is less than thecost of funds from other sources.
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Q1960.- A/P or trade credit is typically divided into 2 categorieswhich are?
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A1960.- Free and Costly Components!
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Q1961.- What's the Economic Order Quantity?
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A1961.- The EOQ is the purchase size that minimizes the totalinventory order cost & inventory carry costs!- >(2 x order cost x annual demand) / inventory carryingcost per unit
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Q1962.- What is good inventory management characterized by?
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A1962.- 1. High Inventory Turnover- 2. Low obsolescence or deterioration write-offs- 3. Infrequent work stoppages or lost sales due to stock-outs
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Q1963.- How is outstanding A/R calculated?
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A1963.- By multiplying credit sales volume by the avg length oftime btw sales and collections.
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Q1964.- How is the level of safety stock determined?
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A1964.- It's level is determined by balancing the cost of a stock-out (i.e., lost business & customer GW) against the cost ofcarrying extra inventory.
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Q1965.- Explain lead time & reorder point.
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A1965.- Lead time is the time lag btw placing an order & thereceipt of the goods. If safety stock is ignored, the reorderpoint is computed as the anticipated demand during thelead time. If safety stock is considered, the reorder point iscomputed as the anticipated demand during the lead timeplus the level of safety stock.
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Q1966.- What's the downside to discounts?
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A1966.- The reduced margin on sales.
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Q1967.- What's float?
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A1967.- Float is the diff btw the amount on the depositor's books& the balance according to the bank.
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Q1968.- Precautionary balances?
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A1968.- Cash budgets are merely forecasts with varying degreesof reliability. Unpredicted fluctuations in inflows couldreduce an account just normal outflows need to be made,causing havoc in everyday operations.
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Q1969.- Transaction Balances vs Compensating Balances
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A1969.- Trans Balances - balances associated with routinepayments & collections.- Comp Balances - banks usually specify a min balance ordeposit to offset the cost of svcs such as checkprocessing or lockbox collection.
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Q1970.- Rate of return estimates?
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A1970.- The rate of return req'd for stock "n" is the default-freerate of return plus the beta for stock "n" times the marketrisk premium.
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Q1971.- Lockbox arrangement?
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A1971.- A lockbox arrangement involves payment checksaddressed to an entity to be physically mailed to a nearbybank, which clears the check & then wires funds to theentity's bank.
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Q1972.- Working capital?
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A1972.- Entity's current assets: $, MS, AR & Inventory. Net WC iscurrent assets less current liab.
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Q1973.- Speculative balances?
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A1973.- Cash balances that are held to allow an entity to takeadvantage of an unplanned bargain purchase.
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Q1974.- Rational Investor Behavior (buying & selling).
![Page 3948: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/3948.jpg)
A1974.- A rational investor will buy a stock if it's expected rate orreturn exceeds it's req'd rate of return. Sell opposite! Fewwill buy until the stock price drops to the point where theexpected returns = the req'd returns! Equilibrium price!
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Q1975.- Assumed rates of return?
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A1975.- A default-free rate of return typically is estimated as therate of return on LT US Treasury bonds. The req'd rate ofreturn on an avg stock by definition, is one with a beta of1.0.
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Q1976.- Correlation?
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A1976.- Correlation is the tendency of 2 variables to move jointly.The correlation coefficient (r) ranges from +1.0 to -1.0. +1 =positive perfect correlation & -1 = perfectly negativecorrelation.
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Q1977.- What are several factors that change stock prices?
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A1977.- 1. A riskless rate change due to changes in anticipatedinflation.- 2. A stocks beta coefficient changing.- 3. Expected growth rate flucuations.
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Q1978.- What are beta coefficients?
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A1978.- They measure the tendency of stock prices to changewith the market changes. High Beta = MORE VOLATILE!- As a corps assets or operating environment changes, sowill it's stock beta coeff!
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Q1979.- What's the CAPM?
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A1979.- The Capital Assets Pricing Model, also called the securitymarket line, attempts to specify relationships btw risk &rates of return. Beta coefficients are determined based onpast volatility, yet investors often attempt to use them topredict future results without full regard for changingconditions.
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Q1980.- Explain market risk.
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A1980.- Market risk can't be eliminated by diversification, it canbe eliminated only by remaining out of the market. Marketrisk is caused by change in the stock market at large. Forinstance, market risk includes the risk that int will rise,lowering all stock prices. Undiversifiable or systematicrisk.
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Q1981.- What is expected rate of return?
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A1981.- The ERR is the weighted avg or outcomes in other words,the sum of each possible outcome multiplied by itsprobability.
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Q1982.- Market risk premium?
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A1982.- The MRP is the addtional return over the default-free ratereq'd for the avg stock. If stock "h" is twic as risky as themarket avg it's risk premium is estimated at twice that ofan avg stock.
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Q1983.- What's the expected total return?
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A1983.- The ETR is the expected dividend yield plus the expectedcap gain (or loss) yield.
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Q1984.- YTM?
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A1984.- The YTM or rate of return on a bond is the effective or realrate of interest NOT stated!
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Q1985.- What's the model of bond value?
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A1985.- BV = PV of prn payment + PV of int payments (annuity)
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Q1986.- For compounding periods other than a yr, how are theyhandled?
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A1986.- For Qtrly compounding, the PV factor for 4 times the # ofperiods & one-qtr of the int is used!
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Q1987.- YTC?
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A1987.- If current mkt rates are below an outstanding callablebonds stated rate, the bond is likely to be called.
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Q1988.- Explain for bonds the stated face value or par value & thecoupon int rate or stated int rate?
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A1988.- Stated or par = what's repaid!- Stated or coupon = rate the issuer use to calculate intpayments (par val x coupon int rate)
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Q1989.- What's a premium on a bond?
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A1989.- If a 12% bond is available when the mkt rate is 10% apremium will be awarded to the 12% bond, such that theeffective int rate is 10%!
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Q1990.- Zero growth stock vs Uneven growth stock
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A1990.- Zero growth = constant dividends- Uneven = more realistic
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Q1991.- Formula for FV of annuity due?
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A1991.- (n + 1) - A- Think future, going fwd so + !
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Q1992.- Do rising int rates depress stock prices?
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A1992.- Yes
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Q1993.- What's the risk premium?
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A1993.- Default risk premium + Maturity risk premium
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Q1994.- What's the effect of a maturity risk premium?
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A1994.- The effect of a maturity risk premium is to have higher intrates on LT bonds as opposed to comparable ST bonds.
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Q1995.- What's perpetuity?
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A1995.- A special instance of annuity, continues infinitely! The PVis the payment divided by the disc rate. Why? The effect ofeach additional payment far in the future decrease to thepoint where the impact of individual future paymentsapproaches 0.
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Q1996.- T or F, demand for $ falls during recession.
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A1996.- True
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Q1997.- Example of PV of a future amount?
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A1997.- A person wants to deposit enough $ to have 5K in 2 yrs.What will they need to deposit now?
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Q1998.- Explain normal yield.
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A1998.- In a stable economy (where inflation flucuates in a lowrange, expected future inflation rates are roughly equal tocurrent rates & no intervention by the fed occurs), the yieldcurve is relatively low & generally has a slight upwardslope reflecting maturity effects.
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Q1999.- Corps raise cap in what 2 forms?
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A1999.- Debt & Equity!
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Q2000.- T or F. Temporary EPS increses that cripple futureearning potential might not be taken into acct whencomparing current performance.
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A2000.- True
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Q2001.- Explain what happens when dividends & EPS are diff &the same.
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A2001.- Diff - part of the stock value is due to untrasferredearnings, rather than performance.- Same - all of the stock value change is due toperformance.
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Q2002.- Briefly explain autonomy.
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A2002.- Autonomy could translate into actions that, rather thanmaximizing s/h wealth, merely keeping stakeholderssatisfied while other goals are pursued.
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Q2003.- What are the 4 cycles of a life cycle?
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A2003.- 1. Infancy- 2. Growth- 3. Maturity- 4. Decline
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Q2004.- What are some external constraints?
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A2004.- Societies make antitrust, employment, environmental,product safety, workplace safety, & other laws, reg's &practices.
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Q2005.- To maximize s/h wealth, management should concentrateon what?
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A2005.- Total ret per share!
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Q2006.- What are 2 arguments against a corp taking cost-increasing socially responsible actions?
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A2006.- 1. Mandates increase effectiveness- 2. Owners benefit equals social benefit
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Q2007.- What is default risk?
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A2007.- The default risk premium for a given security is the diffbtw the security rate & the US Treasury bond rate.
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Q2008.- Debt vs Equity markets.
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A2008.- Debt mkts exchange bonds, notes & loans. Equity mktsexchange stock & other ownership interests.
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Q2009.- What are mutual funds?
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A2009.- Mutual funds are corporations that pool dollars fromstockholders (savers) to invest typically in debt & equitysecurities.
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Q2010.- Physical assets mkt vs financial assets mkt
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A2010.- Physical - real estate, grains, computers, etc.- FA mkt - claims on assets, ex. include stocks, bonds,warrants, options, notes & mortgages.
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Q2011.- 1 yr vs 3 yr bond when inflation is expected to decrease.
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A2011.- The int rate on the 1 yr bond is expected to be greater thatthe int rate on the 3 yr!
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Q2012.- What are bid & asked prices?
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A2012.- Bid - what price the specialist will buy- Ask - " " sell- Thnk BB & SS
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Q2013.- What do investment banks typically do?
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A2013.- 1. Help corps design securities with features that willattract investors.- 2. Buy the securities- 3. Re-sell them to investors.
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Q2014.- What's in money mkt?
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A2014.- Exchanges for ST debt securities (less than 1 yr).
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Q2015.- Explain what direct (variable) costing is.
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A2015.- It's an inventory costing method whereby dm, dl & vohare considered to be product costs (inventoriable costs),while fixed manufacturing OH is considered to be a periodcost (cost expensed in the period incurred).- In absorption costing, the costs to be inventoried includeALL manufacturing costs, both variable & fixed.
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Q2016.- Example of percentage markup on cost.
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A2016.- Want to sell a product at a gross margin of 20%. The costof the product is $4.00.- % markup = 20% / 100% - 20% so = 25%- Selling price = Cost of product + GM so 4.00 + 25%(4.00) =5.00
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Q2017.- What's the formula for % markup on cost in cost-pluspricing?
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A2017.- % markup on cost = % markup on selling price / 100% - %markup on selling price
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Q2018.- Explain the cost-plus pricing approach in product pricing.
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A2018.- Takes the products costs & adds a predetermined markupto compute the targeted selling price.
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Q2019.- Explain cont marg approach in product pricing.
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A2019.- Under CM approach, product pricing is based upon allrelevant costs plus any additional fixed costs necessaryfor the increased production level.
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Q2020.- What's up with irrelevent costs?
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A2020.- Historical costs are always irrelevent per se, althoughthey may be helpful in predicting relevent costs. In order tobe relevent for decision making, an item must meet both ofthe following: it's an expected future cost or revenue, it'samount will differ among alternatives.
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Q2021.- What's the def of relevent costs?
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A2021.- Relevent costs are expected future costs that will differamong alternatives. The concept of cost relevence isimportant in the decision making process, especially indecisions that are nonroutine.
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Q2022.- What's predatory pricing?
![Page 4044: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/4044.jpg)
A2022.- Deliberately setting prices below cost in an effort to drivecompetition out of the mkt. Once competitors leave, pricesare raised.
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Q2023.- What are the 2 common approaches to product pricing?
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A2023.- Cont Margin Approach & Cost Plus Pricing
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Q2024.- Eliminate product line or division.
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A2024.- The cont margin of a line must be compared to itsrelevant fixed costs (the FC's that would be eliminated ifthe line were discontinued). If the CM of the line exceedsthe FC's that would be eliminated, the line should NOT bediscontinued! The fixed cost's that will not be eliminatedare irrelevant to the decision because they will continueregardless of the decision.
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Q2025.- Examples of relevent costs are?
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A2025.- Avoidable Costs - cost that will not be incurred if anactivity is altered or suspended.- Differential (incremental) costs - the diff in cost btw 2alternatives- Marginal costs - the addition to total cost of producing orselling one more unit of output.- Out of pocket costs - immediate or near future $ outlays.- Opportunity costs - the foregone benefits (revs minuscosts) from alternatives not selected.
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Q2026.- Composite sales BE?
![Page 4052: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/4052.jpg)
A2026.- FC / *Composite CMR- *Remember, this is the 1/19 (50%) + 6/19 (25%) + 12/19(33%) thing!
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Q2027.- In mixed sales, how would you get the BE point for eachproduct?
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A2027.- Composite Units x sales mix ratio = BE Units- BE Units x selling price = BE $
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Q2028.- In composite BE pt, do you multiply the cont marg foreach product by their sales mix ratio to get weighted CM?
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A2028.- Yes
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Q2029.- Contribution marg method of BE pt in $ & units.
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A2029.- FC + NI / Cont Marg Ratio- FC + NI / UCM- Cont Marg is always in den!
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Q2030.- What's the def of MOS?
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A2030.- MOS can be defined as the xs of budgeted (or actual)sales over the BE volume of sales. It states the amount bywhich sales can drop before losses begin to be incurred inan org.- Total Sales - BE Sales = MOS- MOS / Total Sales = MOS%
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Q2031.- Formula for composite cont margin?
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A2031.- CCM = Sum(sales mix ratio for a product x cmr for theproduct)- ex. 1/19 (50%) + 6/19 (25%) + 12/19 (33%)
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Q2032.- Formula for composite units? (also called the BE point formixed sales)
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A2032.- FC / Composite CM- CCM is the weighted CM's added together.- Note: A composite unit is based on the ex in the bk as the"package" made up of 1 unit of A, 3 units of B, & 4 units ofC.
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Q2033.- What is composite BE?
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A2033.- When a company sells more than 1 product, a BE pointcan be determined for each product based on expectedsales mix & the composite or combined cont marg!
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Q2034.- What are committed costs?
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A2034.- These represent fixed costs that arise from having PPE, &a functioning org! These costs remain even when theproduction volume is zero! Included is depr & LT leasepayments.
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Q2035.- Prime costs vs conv costs
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A2035.- Prime = DM & DL- CC = DL & OH- Period = Selling & Admin (expensed as incurred)
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Q2036.- Give examples of DM, DL & MOH.
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A2036.- DL ex = easily traceable to product. The labor costs ofworkers who assemble desk tops or operate melting equip.- DM ex = desk tops & legs- MOH = indirect labor, indirect mat'l, repairs &maintenance, factory utilities, equip depr.
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Q2037.- What are product costs?
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A2037.- They are inventoriable. They are DM, DL, VOH & FOH.Pretty much everything!
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Q2038.- What's the def of CC?
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A2038.- Sum of DL & MOH (V & F)! It represents the costs toconvert raw mat'ls into finished products.
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Q2039.- What are prime costs?
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A2039.- DM & DL
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Q2040.- What are discretionary costs?
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A2040.- These costs are often unrelated to volume & include forex. adv costs & research & development costs.
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Q2041.- Does COGM replace purchases of a merchandising firm?
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A2041.- Yes! Finished Goods = EI
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Q2042.- Learning Curve?
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A2042.- Used to refer to the phenomenon that when people firstperform a task, they will be slower than when they performit for the 100th time. Hence, labor hrs will be more (&associated costs higher) when people are doing for the 1sttime.
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Q2043.- Does total variable cost have a direct relationship withvolume?
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A2043.- Yes! FC don't change remember!
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Q2044.- Explain mixed costs.
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A2044.- Mixed costs are comprised of both variable and fixedelements. Due to their variable cost element, mc change intotal with a change in volume, but not in direct proportioncuz of their fixed cost element. Due to their fixed cost part,avg mc per unit decreases with an increase in volume. MCinclude electricity, maintenance, etc. MC are usually splitinto fixed & variable elements for purposes of cvp &budgets.
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Q2045.- What's in raw mat'ls inventory acct?
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A2045.- Beg Bal + Purchases = Available for use - RM used(transferred to WIP) = Ending Balance
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Q2046.- Experience curve?
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A2046.- The experience curve is the graphic representation oftime (& costs) for a broad category of tasks decreasing asa group gains experience with a set of tasks.
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Q2047.- Does avg fixed cost per unit have an inverse relationshipwith volume?
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A2047.- Yes
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Q2048.- What are step variable costs?
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A2048.- ex. supervision may be fixed over a given productionvolume, but additional shifts or work crews may be neededto increase production therefore additional supervisors areneeded & thus the added cost will go up in a lump sum or"stair step" manner!
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Q2049.- Explain how the cvp chart works.
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A2049.- The cvp chart shows the profit or loss potential for therange of volume within the relevant range. At any givenlevel of output, the predicted profit or loss is the verticaldiff btw the sales line & the total cost line. The BE point isat the intersection of sales & total costs.
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Q2050.- What's the schedule called that represents the cost of theproducts completed during the period & transferred to FGinventory?
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A2050.- COGM schedule!
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Q2051.- What's in the WIP inventory acct?
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A2051.- Beg Bal + RM, Labor, OH used = Avail to finish - GoodFinished ( to FG's) = ending balance
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Q2052.- Explain the relevent range.
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A2052.- All the relationships graphed on the cvp chart are validonly within a band of activity called the relevent range, thesame relationships are unlikely to hold true. For ex, somefixed costs may increase at high levels of output!
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Q2053.- T or F, breakeven & cvp analyses are concerned with theeffect upon operating income (or NI) of various decisionsregarding sales & costs?
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A2053.- True
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Q2054.- Explain how the diff (variance) btw actual OH & appliedOH is reported?
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A2054.- Usually reported as an adj to COGS in the I/S!
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Q2055.- What's in the FG inventory acct?
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A2055.- Beg Bal + Goods Finished (from WIP) = Avail for Sale -COGS = Ending Bal
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Q2056.- What's the dollar sales to achieve a desired profitformula?
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A2056.- (FC + desired NI) / Cont Marg Ratio
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Q2057.- What's the cont margin ratio?
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A2057.- Total cont margin / total sales
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Q2058.- In the cvp chart, explain BE pt, cont marg, NI & NL.
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A2058.- BE = Total cost & sales intersect- Cont Marg = Sales line over variable costs line- NI = Past BE pt- NL = Below BE pt
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Q2059.- Simply put, how is BE pt defined?
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A2059.- The pt where sales less fixed & variable costs result inzero profit. Thus, the BE point is defined as the pointwhere NI = 0!
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Q2060.- At zero volume, what would the net loss equal?
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A2060.- Equals total fixed costs!
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Q2061.- Hardware?
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A2061.- Physical computer equip. Downtime is when computeraint functioning.
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Q2062.- What's CPU / mainframe?
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A2062.- Primary hardware component. Actual processing dataoccurs in the CPU! It contains primary storage, a controlunit & an arithmetic / logic unit!
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Q2063.- What's RAM & ROM?
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A2063.- The primary storage contains the data & program stepsthat are being processed by the CPU & is divided into RAM(random-access memory) & ROM (read-only memory)!
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Q2064.- What's the control unit?
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A2064.- Portion of the CPU that controls & directs the operationsof the computer. It interprets the instructions from theprogram & directs the computer system to perform them.
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Q2065.- What are peripheral equip?
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A2065.- Equip that is NOT part of the CPU but that may be placedunder the control of the CPU, i.e., which may be accesseddirectly by the CPU. Input/Output devices & secondarystorage devices are peripheral equip!
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Q2066.- What are examples of Input/Output devices?
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A2066.- 1. Barcode readers- 2. Keyboard- 3. Magnetic Ink Character Recognition- 4. Magnetic Tape Reader- 5. Modem- 6. Monitor / Screen- 7. Mouse / Trackball- 8. Optical character recognition scanner- 9. Printer
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Q2067.- Briefly explain what software is?
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A2067.- Software includes programs, routines, documentation,manuals, etc., that make it possible for the computersystem to operate & process data.
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Q2068.- What are examples of secondary storage?
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A2068.- 1. Disk, Diskette- 2. Magnetic Tape- 3. Offline Storage- 4. Online Storage- 5. Redundant Array of Independent disks- 6. Randomly accessible (direct access)- 7. Sequentially Accessible
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Q2069.- What's a program?
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A2069.- A program is a set of instructions that the computerfollows to accomplish a task (e.g., A/R update program,inventory management program, & payroll program).Program maintenance refers to making changes in theprogram in order to keep it current & functioning properly.ex. payroll update for soc sec changes.
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Q2070.- What are the 5 program languages?
![Page 4140: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/4140.jpg)
A2070.- MAPFO- 1. Machine Language- 2. Assembly Language- 3. Procedural Language- 4. Fourth-generation Lang- 5. Object-oriented programming
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Q2071.- What's a graphical user interface?
![Page 4142: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/4142.jpg)
A2071.- A GUI allows user access to software functions depictedthrough use of icons, scroll bars, frames, & other pictorialmeans, rather than line-by-line commands or requests.
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Q2072.- What's a patch?
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A2072.- Addition of a new part to a program.
![Page 4145: Bec Flash Cards](https://reader037.vdocuments.us/reader037/viewer/2022102602/55cf94e2550346f57ba51419/html5/thumbnails/4145.jpg)
Q2073.- Explain briefly JCL, Multiprocessing & programming &VS.
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A2073.- Job Control Lang - A commend language that launchesapps, specifying priorities, program sizes, runningsequences, databases used, & files used.- Multiprocessing - 2 or more programs at same time &needs more than one CPU!- Multiprogramming - A program is processed until sometype of input or output is needed. APPEARS if more thanone program is being processed concurrently using oneCPU!- Virtual Storage - O/S divides a program into segments(called pages) & brings only sections of the program intomemory as needed.
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Q2074.- What's an operating system?
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A2074.- Manages the coordinating & scheduling of variousapplication programs & computer functions. The O/S is likea traffic controller for data btw peripheral equip &application programs.
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Q2075.- What's pass (run)?
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A2075.- A complete cycle of input, processing, & output in theexecution of a program, typically an application program.
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Q2076.- What's heuristic?
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A2076.- In computing, the adjective heuristic signifies able tochange, it is used to descrie a computer program that canmodify itself in response to the user. ex. spell check orvoice recognition software.- Think Heuristic - spell check, wierd spelling!
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Q2077.- Collaborative Computing Applications (Groupware,Shareware)?
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A2077.- A program that allows several people to have access tothe same info & attempts to track the authors of changes.
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Q2078.- Management information system?
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A2078.- An information system within an org that providesmanmgt with the info needed for planning & control.
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Q2079.- Utility program?
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A2079.- Routine functions such as sorting & merging!
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Q2080.- What's Enterprise Resource Planning Software?
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A2080.- Complex, highly integrated, multimodule applications thatmanage a business' diff aspects, from traditionalaccounting to inventory management & advanced planning& forecasting.
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Q2081.- Library Program (library routine)?
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A2081.- Programs that frequently are used by several otherprograms. They are kept within the system & "called up"whenever necessary.- ex. generating random #'s
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Q2082.- Web Crawler?
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A2082.- A specialized program used to search the WWW for filesmeeting user criteria.- *Browser displays!- *Crawler searches!
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Q2083.- Topology?
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A2083.- Physical layout of a network! BTRS!
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Q2084.- Explain the 4 topologies.
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A2084.- BTRS!- Bus - Each device is connected to a line with disconnectedends. Communication on either side of a failed device isimpossible.- Tree - Devices connected to other devices in a hierarchicalmanner. Some have many connections & some don't.- Ring - Each device connected to 2 others suce that itresembles a circle. If one device fails communication is stillpossible, however if a device btw 2 failed one's won't be able tocommunicate.- Star - All connected to cent'l device, all messages passthrough cent'l one!
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Q2085.- Brief explanation of what networks are.
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A2085.- A network is an arrangement of computers to allow usersaccess to common data, hardware, &/or software. Aninternet is a network of networks. Intranet gen'ly isrestricted to employee access. Extranet is passwordprotected internet usually made for vendors & customers.
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Q2086.- What's a concentrator?
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A2086.- A device that combines multiple communication channelsinto one. A concentrator differs from a multiplexor in thatthe total bandwidth of inputs don't have to = totalbandwidth of outputs!
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Q2087.- Multiplexor?
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A2087.- Total bw of inputs must equal outputs. It converts lowspeed into high speed transmissions & back again forcommunication stuff!
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Q2088.- Proxy server?
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A2088.- An app or device that manages requests from webbrowsers. A proxy server caches (saves) a copy of pagesretrieved from a web server. Future requests for the samepage are supplied from the cache for shorter responsetime.
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Q2089.- Router?
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A2089.- Switch that transfers incoming messages to outgoinglinks via the most efficient route possible. ex. over theinternet!
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Q2090.- Firewall?
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A2090.- Software designed to prevent unauthorized access todata by separating one segment from another!
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Q2091.- Gateway?
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A2091.- Software or hardware that links 2 or more computernetworks.
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Q2092.- Web Browser?
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A2092.- Program used to find & display www files meeting usercriteria.
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Q2093.- Parallel vs Serial Transmissions.
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A2093.- P - all of the bits of a byte are transmitted at once alongparallel lines, with one bit on each line. Practical only forshort distances, public infrastructure is limited in capacityto do this.- S - each bit is transmitted at one time!
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Q2094.- What are transmission protocols?
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A2094.- Sets of rules used by the transmitting and receivingdevices so that they both interpret data identically. Filetransfer protocols is an example.
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Q2095.- Explain what packet switching is.
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A2095.- PS divides a message into packets which may betransmitted separately through diff paths. Routing & ctrlsoftware assemble the packets to recreate the orgmessage. More efficient than circuit switching, but ofteninvolves some delay.
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Q2096.- Explain what circuit switching is.
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A2096.- CS involves a dedicated channel for the duration of thetransmission. Sender signals it will send message,receiver acknowledges, then whole message is sent.
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Q2097.- What's client-svr architecture?
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A2097.- A network of workstations (clients) & another computer(server) that is shared among the clients.- 1. File Server - a server in two-tier architecture wheremost processing occurs at clients & server mainly servesto store stuff.- 2. Database server - similar to a file server, except theserver stores the database management software & doessome processing.- 3. Three Tier (n-tier) Architecture - additional servers areadded to a two-tier so clients share the functions providedby the svrs. Typical servers include print servers, faxservers, application servers & web servers.
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Q2098.- What are the 4 network languages?
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A2098.- HHXX- 1. HTML - Hyper text markup lang - the code used toformat files for internet display.- 2. HTTP - Hyper text transfer protocol - a set of rulesestablishing how data in files is coded, transferred &viewed.- 3. XML - extensive markup lang - similar to HTML asformats info for use on the web but goes further identifyingthe nature of the info.- XBRL - Extensive business reporting lang - protocolunder development that will provide interactive capabilitiesto SEC filings.
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Q2099.- IP# or address?
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A2099.- An internet protocol # is a unique # assigned to acomputer in a network. A registered IP # is registered witha central database to eliminate duplication on the web.Since IP #'s aren't easy to remember, unique domainnames may be assigned to these #'s. A Uniform ResourceLocator (URL) is another name for a web address.
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Q2100.- What's prima facie credibility?
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A2100.- Something transmitted electronically froma customerderives its credibility primarily from the controls within theelectronic environment.
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Q2101.- A sniffer is?
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A2101.- A tool that will report all the user names & passwords thatit finds, allowing the operator access to an unaware usersemail or other accounts.
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Q2102.- What are the diff's btw a TH, virus, & virus hoax?
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A2102.- Trojan Horse - a seemingly legit program that operates inan unauthorized manner, usually causing damage.- Virus - replicates & attaches itself to other programs, canbe just an annoying message or malicious activity.- Virus Hoax - an email message with a false warning,originator trys to get it circulated as widely as possible.
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Q2103.- Digital Sig?
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A2103.- A dig sig is a guarantee that info has not been modified,like a tamper proof seal on a bottle of aspirin. Digital sigsare used for establishing secure website connections &verifying the validity, but NOT the privacy, of transmittedfiles. Also, a digital sig don't verify the receiving person oraddress.
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Q2104.- What's encryption?
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A2104.- Encryption is a mathematical process of coding data sothat in cant be read by unauthorized people. Decryption istransforming an encrypted file into the file that existed b4the encryption. A key is used to lock & unlock the data.The key is the set of mathematical operations & anyrandom initial values that are used to encrypt & decrypt thedata. Algorithms describe the mathematical process vs.key which give the exact process.
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Q2105.- Explain symmetric encryption.
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A2105.- With symmetric (private key) encryption, the samealgorithm is used for encryption & decryption. Anyone whoknows the method used to encrypt the message candecrypt it. Should be kept secret btw sender & recipient.
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Q2106.- Explain asymmetric encryption.
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A2106.- Think A-Pub!!- Public key (asymmetric) encryption is a system that usesa public key that may be widely known & a private key thatis intended to be dept secret & known only by the recipientof the encrypted messages. The sender encryptsmessages to each particular recipient public key. Therecipient decrypts messages with their private key.
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Q2107.- What are "hot" & "cold" sites?
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A2107.- Back up places!- Hot - location where a functioning system is planned foruse with minimal prep in the event of a disaster at theprimary location.- Cold - equip & power is avail at a location, but req's a lotof set up!
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Q2108.- What's a connectionless enivironment?
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A2108.- The internet (web) since a website can interact with manyusers simultaneously.
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Q2109.- What's back-end processing?
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A2109.- Sales reporting, order inquiry, inventory updating,shipping order generation, etc.
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Q2110.- Hacker vs Cracker?
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A2110.- Hackers - computer enthusiast who's interested inlearning the nitty-gritty.- Crackers - (criminal hacker)- intentionally involved in unethical activity.- Script Kiddies - use tools in an automated fashion &cause damage without understanding what they doing.
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Q2111.- What are 7 kinds of hacker tools?
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A2111.- DPS TVSV- 1. Demon Dialers- 2. Port Scanners- 3. Scripts- 4. Trojan Horse- 5. Virus- 6. Sniffer- 7. Virus Hoax
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Q2112.- What's an ad hoc report?
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A2112.- Non-standardize report composed when the need arises.
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Q2113.- What are demon dialers?
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A2113.- Software tools that will dial through a series of phone #'sfinding modems then it will issue standard or defaultpasswords, username combos, or brute attack trying tobreak into the system.
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Q2114.- What are scripts?
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A2114.- Scripts will interrogate or investigate machines, findingout what accounts exist on the maching & whether a limiton password attempts is enabled.
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Q2115.- What are port scanners?
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A2115.- Port Scanners are tools that will scan a network &network devices, & produce, automatically, reports thatsay these particular svcs are available & open. Thus, it'simportant to turn off svcs NOT being used & restrict svcsthat are being used.
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Q2116.- 6 things a gen'l IT system includes?
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A2116.- 1. Hardware- 2. Software- 3. Documentation- 4. Personnel- 5. Data- 6. Controls
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Q2117.- What's another word for automated controls?
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A2117.- Controls embedded in computer programs!
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Q2118.- What are the benefits of an IT environment?
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A2118.- 1. Consistently apply predefined bus rules & performcomplex calcs in processing large volumes of trans!- 2. Enhance timeliness, availability, & accuracy of info.- 3. Facilitate additional analysis of info.- 4. Enhance the ability to monitor the performance of theentity's activities & compliance with its policies & proc's.- 5. Reduce the risk that controls will be circumvented,especially if controls over changes to the IT system areeffective.
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Q2119.- What are the risks of an IT environment?
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A2119.- 1. Overeliance on info provided b the IT system.- 2. Unauthorized access to data.- 3. Unauthorized changes to computer programs.- 4. Failure to make necessary changes to computerprograms.- 5. Inappropriate manual intervention.- 6. Potential loss of data.
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Q2120.- What are the 6 trans processing systems?
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A2120.- 1. Inventory control- 2. Sales- 3. Purchasing- 4. Payroll- 5. Production- 6. Gen'l ledger
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Q2121.- What are 4 things to consider about an IT system?
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A2121.- 1. Documentation - many proc's in IT system don't leaveevidence of performance automatically.- 2. Electronic info - files & records are in machine-readable form & can't be read without a computer.- 3. Knowledge - a user may need specialized knowledge touse the system.- 4. Difficulty of change - once implemented it's hard tochange an IT system.
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Q2122.- What are the 3 management reporting systems?
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A2122.- 1. F/S- 2. Data Mining- 3. Key Performance Indicators
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Q2123.- Explain the 3 types of data mining.
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A2123.- 1. Sieve - sift thru large amts of data quickly. Can be doneon entire pop's!- 2. Customer Profiling - ex. credit card co may flag & delaytrans that don't fit the customer profile. A store may noticeseveral unrelated items commonly are purchases at thesame time, a change in merchandise arrangement canresult in increased sales.- 3. Auditing - looking for fraud.
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Q2124.- Explain the structure of data.
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A2124.- Bit - binary digit (0 or 1, on or off) represents smallest unitof data.- Byte - group of bits that represents a single character- Field - group of related characters. ex. a name- Record - group of related fields. ex. customer file- Editing refers to the addition, deletion, &/orrearrangement of data. Input editing refers to editing b4processing & output editing refers to editing afterprocessing.
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Q2125.- Master vs Transaction file?
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A2125.- Master - contains relatively perm data like customername, address, credit limit, amount owed, etc.- Transaction - contain current temporary data. Atransaction file is used to update a master file.- For example, the day's charge sales would beaccumulated on a trans file that would be used to updatethe A/R master file during an update run.
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Q2126.- Explain database.
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A2126.- A structured set of interrelated files combined toeliminate redundancy of data items within the files & toestablish logical connections btw data items. For ex, withinpersonnel & payroll files, some of the data in the two setsof records will be the same, in a database system, thesefiles would be combined to eliminate the redundant data.
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Q2127.- What's encode and decode?
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A2127.- Encoding (or encryption) is scrambling data to preventunauthorized use.- Decoding is converting data from an encoded state to itsoriginal form.
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Q2128.- What are the 5 phases of development & implementation?
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A2128.- Analysis - feasibility study- Design- Programming - coding and testing- Implementation - system is released to user- Monitoring
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Q2129.- In systems operation, what are the 4 processingmethodologies?
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A2129.- 1. Batch Processing- 2. Online Processing- 3. Real-time Processing- 4. Integrated System
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Q2130.- Diff btw batch & online processing?
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A2130.- B - transactions to be processed are accumulated ingroup (batches) b4 processing & are then processed as abatch.- OP - Trans are processed & the files are updated as thetrans occurs. ex. cash terminal may automatically updateinventory file when sale is made.
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Q2131.- What's real-time processing and what's an example?
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A2131.- An online system is operating in real time if the data isprocessed fast enough to get the response back in time toinfluence the process. For ex, an airline reservation systemis an OLRT system since the customer receivesreservations after waiting only a few moments.
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Q2132.- Which functions within the IT dept should be segregated?
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A2132.- Control Group- Operators- Programmer- System Analyst- Librarian- COPSL
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Q2133.- What's an integrated system?
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A2133.- All files affected by a transaction are updated in one transprocessing run! ex. a sales trans may update the salessummary file, the A/R master file, & the inventory fileduring one processing run!
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Q2134.- What are the 3 outside processing arrangements?
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A2134.- 1. Block time - rent certain block of time from outsideparty.- 2. Time-sharing - a # of users share a computer system.Each may a access a CPU outside a client whenever.- 3. Service bureau - outside org that provides a wide rangeof data processing svcs for a fee.
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Q2135.- What do the C, O & S do in an IT dept?
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A2135.- Control Group - repsonsible for I/C within the IT dept!- Operators - Convert data into machine readable form!- Systems Analyst - Designs the overall system & preparesthe system flowchart.
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Q2136.- Who are the 6 people usually in a website team?
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A2136.- 1. Accountant / Auditor - Specialists who understand howbus processes work.- 2. Graphics designer - an artists who uses colors &images to design a site to complement the sites mission.- 3. Marketing Specialist- 4. Usability Specialist- 5. Webmaster - A programmer responsible for thefunctionality of a site.- 6. Writer- AMUGWW
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Q2137.- What are the 3 diff administrators & what do they eachdo?
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A2137.- Database administrator - responsible for maintaining 1 ormore databases & restricting access to authorizedpersonnel.- Network Administrator - responsible for maintaining theefficiency & effectiveness of an internal network.- Web Administrator - responsible for maintaining externalnetwork interfaces (websites).
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Q2138.- What's program documentation?
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A2138.- Primarily used by systems analysts & programmers toprovide a control over program corrections & revisions.
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Q2139.- What are operations documentation?
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A2139.- Info provided to the computer operator. IT can be used bythe auditor to obtain an understanding of the functionsperformed by the operator & to determine how data isprocessed.
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Q2140.- What are hardware controls?
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A2140.- They are controls that are built into the computer.
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Q2141.- Echo check vs Hardware Check?
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A2141.- Echo - CPU sends signal to activate input/output device,the device sends back signal to verify activation.- Hardware - computer checks to make sure the equip isfunctioning properly.
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Q2142.- What is boundary protection?
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A2142.- Keeps several files or programs seperate when theyshare a common storage.
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Q2143.- File labels?
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A2143.- External - Human readable- Internal - Machine readable- Header - appears at beg of file & contains such info as thefile name, ID# & the tape reel #.- Trailer - at end of file, contains info like count of therecords in the file & an end of file code.
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Q2144.- What's a file protection ring?
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A2144.- Guards against the inadvertant erasure of the info on thetape.
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Q2145.- What's computer editing?
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A2145.- Computers can be programmed to perform a wide rangeof edit tests (edit checks) on records as they are beingentered in the system.- If a particular record does NOT meet the test, it aintprocessed.
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Q2146.- The 6 control types are?
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A2146.- PACCDS- Preventive - b4 an error occurs- Application - limited to a specific app, such as a controlthat verifies that a soc sec # has only numerical input.- Corrective - after an error is found- Compliance - promote adherence to established policies- Detective - uncover errors after they happen- System or gen'l - apply to the entire system, such as acontrol that verifies parity is maintained.
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Q2147.- Hot vs cold sites?
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A2147.- Hot - location where a functioning system is planned foruse with minimal prep in the event of a disaster at theprimary location.- Cold - location where equip & power is located &available but req's considerable effort to get an o/sfunctioning.
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Q2148.- What should continuity planning include?
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A2148.- 1. Notification proc's- 2. Recovery management- 3. Temp Operating Proc's- 4. Backup & recovery proc's
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Q2149.- Best way to scenario test disaster stuff?
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A2149.- Scenario Testing - The expense & lost productivity tosimulate a company wide disaster could be significant &unnecessary. A dry run (or table-top testing) woulddiscover many weaknesses & allow contingency plans tobe refined. Several limited-scope disaster sims couldpinpoint additional weaknesses with minimal disruption toregular operations.
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Q2150.- Documentation Mnemonic?
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A2150.- OPSOUP- Operation documentation- Problem definition doc- Systems documentation- Operator documentation- User documentation- Program documentation
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Q2151.- Explain user documentation.
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A2151.- Description of the input req'd for processing an outputlisting. Auditor's may use it to gain an understanding of thefunctions performed by the user & the gen'l flow of info.
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Q2152.- What are decision tables?
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A2152.- Decision tables are one means of documentation. Theyemphasize the relationships among conditions & actions,& present decision choices. Decision tables oftensupplement systems flowcharts.
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Q2153.- Explain operator documenation.
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A2153.- Documentation should be prepared that will indicate thejobs run & any operator interaction.- 1. Daily computer log - tells jobs run, the time & by who.- 2. Console log - a listing of all interactions btw theconsole & the cpu.
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Q2154.- What's systems documentation?
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A2154.- Provides sufficient info to trace accting data from it'soriginal entry to system output. Includes:- 1. Desc of system- 2. System flowchart- 3. Input descriptions- 4. Output descriptions- 5. File descriptions- 6. Descriptions of controls- 7. Copies of authorizations & their effective dates forsystem changes.
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Q2155.- What's problem definition documentation?
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A2155.- Permits auditor to gain a gen'l understanding of a systemwithout having to become involved in the details of theprograms.