Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

BEC CPA > ME Reviews > Flashcards

ME Reviews Flashcards

1
Q

Cost objectives (3)

A

Determine net income, valuation of unexpired costs, measurement of efficiency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Balanced scorecard general purpose

A 
Classify activities of an organization into major headings and identify the critical success factors & related goals (FICA)
Finance
Internal business process
Customer service
humAn capital
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Do fixed Costs change in relevant range

A

Hell no. Relevant range is the range which the relationship between a cost and driver remain valid; so fixed shouildl remain fixed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Inflation rate measures what

A

The rate at which the overall price level increases

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Increase in the price of a complementary product has what impact on the demand of the main product (ex: increase in price of gas has what impact on SUV sales)

A

Causes demand for SUVs to shift left

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Increase in the price of a inpu has what impact on the supply of the main product (ex: increase in price of steel has what impact on SUV sales)

A

Causes decrease in supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Reparation restrictions

A

Exist when a company invests money in a foreign company but is restricted from bringing that money back into its home country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Appropriate order for developing a business continuity plan

A

Assess key risks, identify mission-critical applications and data, develop a plan for handling applications, determine responsible parties for handling disaster recovery, test the recovery plan

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Investor with risk averse behavior will reduce risk mixing investments in a portfolio with different risk; what type of risk is the investor trying to reduce?

A

Unsystematic risk; firm specified or non-market risk

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Techniques to conserve cash

A
  • speed up collections (prompt billing, review credit policies)
  • take advantage of vendor grace periods
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

How long should auditors of issuers maintain work papers

A

7 years from the end of the fiscal period in which the audit or review was conducted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Periodically meeting with employees, service beneficiareiis, governance board members to comparing and updating the mission values and values is classified as what framework under COSO

A 
Monitoring activity (separate & ongoing evaluation)
Because they are meeting with employees, trying to make sure their enviornment is set
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Purpose & use of an executive information system

A

Software solution that gives senior executives ready access to data that has been consolidated at the enterprise level from different pieces of the company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

If something is “not marketable at split off” or “NRV cannot be determined at split off”, how do you arrive at the NRV?

A

If you cannot determine the NRV at split-off, the additional added costs at split off point must be subtracted from the FINAL SELLING PRICE.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Competitive strategy for an ologopolistic market structure

A

Allocate proper amount of resources to advertising to ensure product differentiation & adapt to price/volume changes
- oligopoly want differentiation, so a good way is to invest in advertising

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Market strategy for monopoly

A

Want to focus solely on profitability

Monopoly would focus investment on product enhancements & research

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Son-father-grandfather concept

A

Backup file system
Most recent file is the son
Second most recent is the father
Preceding file is the grandfather

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Formula for calculating opportunity costs (if given question regarding discount period)

A

(360/(total pay period- discount period) * (discount %/ (1-discount %)

Note: if given something like 3/10, net 45
This means, 3% discount if paid within 10 days (discount period) otherwise payment due in 45 days

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Goal of flexible budget analysis

A

Eliminate sales volume activity from budget variance analysis by adjusting the master budget amounts for actual sales

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Price elasticity of demand (midpoint method) formula

A

[(New quantity demanded - old QD)/ (new QD + old QD) ] / [(new price - old price) / (new price + old price) ]

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

4 stages of change continuum noted by COSO

A

Control baseline, followed by change identification, change management, control validation/update

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

When is price discrimination most effective

A

When customers are distinct segments, they can’t join together to gain bargaining power

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What does it mean when something is price inelastic

A

An increase in price results in an increase in total revenue, because the increase in price results in a decrease in quantity demanded that is proportionally smaller than the increase in price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

If demand is UNIT elastic, what impact does a change in price have on total revenue

A

No impact

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Definition of economic fluctuations (business cycles)

A

Fluctuations in the level of economic activity,relative to a long-term growth trend

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Characterization of an economic trough

A

Unused productive capacity, and an unwillingness to risk investments
Lowest of the low, no positive indicators for the future

27
Q

Monopolistic competition strategic plan

A

Maintaining market share and planning for enhanced product differentiation

28
Q

Sales volume variance formula

A

(Budgeted units sold - actual units sold) = variance in units
CM per unit = budgeted CM/ budgeted units sold

Variance due to sales volume = variance in units * CM per unit (budgeted)

29
Q

What costing method is useful for external reporting

A

Absorption represents GAAP, so it’s the most beneficial

30
Q

Equation for beta coefficient

A

% change in stock price / % change in market price

31
Q

Formula for cost of equity capital

A

R = (D1/ P0) + g

G = expected growth rate in dividends
P0 = current market price per share of common stock
D1 = Current dividend per share * (1 + g)
32
Q

What type of bond maintains a constant market value

A

Floating-rate bonds

33
Q

3 factors of the fraud triangle

A

Pressure/motivation, opportunity, rationalization

34
Q

Impact of cost pools and allocation bases when an ABC costing system replaces a traditional costing system

A

Both increase!
ABC breaks down production process into many activities, then accumulates costs by activity (cost pool) and uses the appropriate allocation base for each activity

35
Q

What formula is the best for evaluating the performance of a firm’s capital in a given year

A

Economic value added, as it uses the NOPAT and compares it to the required return for the capital

EVA = NOPAT - Required Return
Required Return = investment x WACC

Positive EVA = performance meets standards
Negative = performance is not meeting standards

36
Q

ROA is used to do what

A

Evaluate the efficiency of asset usage & management

37
Q

what two controls are a key component of disaster recovery plan

A

backup and downtime controls

38
Q

objective of data security controls

A

to ensure that storage media are subject to approval prior to access, change or destruction

39
Q

financial risk includes

A

risks of having financial resources lost, wasted or stoeln

40
Q

in their most basic function, what is the role of a router, switches, gateways, and servers

A

routers manage network traffic, switches connect devices, gateways act as intermediaries, servers provide computing power

41
Q

risk acceptance

A

taking no action, just accepting the risk

42
Q

if the government wants to stimulate the economy, what does this mean & what actions can they take

A

STIMULATE THE ECONOMY = FISCAL POLICY

so to drive consumer demand, want to reduce consumer taxes and increase government spending

43
Q

transaction exposure risk

A

risk that the currency a transaction is denominated in will be adversely impacted by the currency a transaction is settled in

ex: greek company need to purchase 1,000 usd, risk that the value of euro will fall in relation to the dollar

first step is to determine net currency inflows/outflows

44
Q

profitability index

A

PV of net future cash inflows / PV of net initial investment

45
Q

limitation of the profitability index

A

requires detailed long term forecasts of a given projects cash flows

46
Q

length of time required to recover an initial cash outlay is determined using what method

A

payback method

47
Q

types of risks (DIM CLP)

A

default, interest rate, market, credit, liquidity, price

48
Q

market risk

A 
either diversifiable (unsystematic/non-market)
or nondiversificable (market/ systematic)
49
Q

liquidity risk

A

can you sell the investment in a short period of time without price concessions

50
Q

Market value at risk analysis is used to help an investor understand what type of financial risk

A

Financial risk

51
Q

Risk averse behavior

A

Managers demand more return on an investment as risk increases

52
Q

What does it mean when an investor is “certainty equivalent”

A

It’s the point an investor is indifferent to risk
If the CE > expected value of an investment alternative = risk seeking

If the CE < expected value of an investment alternative = risk averse, as they seek higher return for more risk taken on

53
Q

Default risk premium

A

Additional compensation demanded by investor for bearing the risk that the security issuer will fail to pay interest and/or principal on a timely basis

54
Q

What does a “DECLINING” domestic currency imply

A

It will become WEAKER in regard to the foreign currency

Means dollar is less expensive relative to the foreign currency

55
Q

IRR is defined as

A

The rate of interest that equates the present value of cash outflows and the present value of cash inflows

56
Q

The higher the PV factor, the IRR

A

The higher the PV factor, the lower the IRR.

Increases to the investment or decreases to the cash flows increases the PV factor as:
PV factor = investment / cash flows

57
Q

Payback period formula

A

Net initial investment / average incremental cash flow

*avg incremental cash flow = annual net cash savings, after tax

If cash flows are not the same, simply just calculate manually until initial outlay = 0

58
Q

Assuming excess capacity is available, what’s the minimum price acceptable for a special order

A

The SUM of the variable costs of the currently produced units.

Ex: want to produce 10 units of Y (with excess capacity) and X variable costs are $5, and x fixed cost are $2
Minimum selling price of Y is $5! Ignore fixed costs, it’s not relevant bc it’s excess capacity

59
Q

If not using excess capacity, what is minimum selling price you would accept for a special order

A

Sum of current VC + CM for next best alternative

So if current VC is $5, and next best alternative CM is $2, minimum price is $7

60
Q

What is DUMPING

A

Price charged to foreign consumers on exported goods is < either price charged in domestic market or < production cost

61
Q

Theory of constraints

A

Concerned with maxim action of throughput by identifying and alleviating constraints

62
Q

Just in time purchasing systems, do you require more or less suppliers

A

LESS

Usually you require a better relationship with fewer suppliers to implement JIT systems

63
Q

Transaction exposure, what to do for payable/receivables

A

Payables - BUY

receivable - SELL

BEC CPA (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions