BEC 2 Flashcards
1
Q
Markets where securities trade b/w investors after they have been issued by a corporation are: Na2S .
A
Secondary Markets NH4+1
1
Q
A unique service , product, or result that has a definite beginning and an end
A
Project
1
Q
Off-shore operations” describes an organization
A
incorporating outside of the original jurisdiction of the primary operations.
1
Q
Which of the following statements is correct concerning the security of messages in an electronic data interchange (EDI) system?
A
Encryption performed by a physically secure hardware device is more secure than encryption performed by software.
1
Q
relational databases use
A
tables.
1
Q
A major advantage in the adoption and use of electronic commerce lies in the replacement of which of the following?
A
Paper documents
2
Q
Product demand is more elastic
A
With more subsititutes available
2
Q
The online data entry control called preformatting is:
A
the display of a document with blanks for data items to be entered by the terminal operator.
2
Q
Who Is Hurt by Inflation:
A
Those individuals who receive a fixed income.
3
Q
At the split-off, products may be salable or may require further processing in order to be salable. These are characteristics of:
A
By-products and Joint Products
3
Q
Performance measures should assess how well subunits and managers are meeting:
A
goals of the organization.
3
Q
There are three levels of interdependence in integrated planning:
A
a. Pooled interdependence: There is a common source of resource, but no interrelationship between the work groups. b. Sequential Interdependence: The work groups coordinate the flow of information, tasks, or resources from one group to another. c. Reciprocal Interdependence: Information, tasks, and resources are passed back and forth between the groups.
3
Q
What is the effect on prices of U.S. imports and exports when the dollar depreciates?
A
Import prices will increase and export prices will decrease.
3
Q
How many levels of interdependence are included in integrated planning?
A
Three levels
3
Q
Which of the following statements relating to machine language is not true?
A
Machine Language is the most efficient form of a fourth generation language
4
Q
The Master budget is a comprehensive expression of management’s strategic direction that includes:
A
operating and financial budgets
4
Q
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
A
Before the initiative begins our answer was incorrect After completion of the initiative During the initiative
5
Q
Company elects to treat the potential damages from hurriances as part of their business model
A
Risk Acceptance
6
Q
A tool that is useful in conducting a preliminary analysis of internal controls in an organization or organizational unit:
A
Flowcharting
7
Q
A combation of rising unemployment and a rising price level
A
Stagflation
8
Q
What are reasons a firm may choose to outsource;share services, or off-shore a certain process:
A
Reduce Cost Improve process quality Focus on core competencies
8
Q
Which of the following is true about the short run cost structure of a firm as the quantity produced increases?
A
B Average total costs reach a minimum when average total cost equals marginal cost.
9
Q
Net income plus interest expense divided by the firm’s average interest bearing debt plus shareholders equity is the definition of:
A
Return on invested capital (ROIC)
9
Q
the major advantage of debt financing is
A
is in lowering taxes. This advantage is greatest in periods of high marginal tax rates and few noninterest tax benefits.
9
Currently, the U.S. tax code requires that transfer prices for multinational corporations are “arms length transactions.” Methods that are prescribed by the IRS for setting arm's length prices for tangible goods include all of the following except:
the target revenue approach. This method starts at a target selling price for the distribution affiliate that allows for a reasonable profit less the transfer price and any additional costs to cover overhead costs.
10
In order to comply with a director's duty of loyalty to a corporation, what action(s) should a director take when presented personally with a new business opportunity?
Offer the opportunity to the corporation and accept it only if the corporation rejects it
11
The most common economic costs are
1. Land(rent)
2. Labor(wage)
3. Capital(interest)
4. Entrepreneurial
11
How many levels of interdependence are included in integrated planning?
Three levels
11
What is the effect on prices of U.S. imports and exports when the dollar depreciates?
Import prices will increase and export prices will decrease.
11
Globalization suggests that firms need to take a serious look at the variety of implications of globalization for business strategies. Among the major factors that need to be considered are:
the need for scenario planning, which causes the firm to look at a number of different future possibilities for the firm under varying conditions of high uncertainty.
12
An auditor's required communication with those charged with the governance of an audit client (usually the audit committee):
This communication should include a discussion of any significant disagreements with management about the financial statements
12
Which of the following statements relating to an expert system is not true?
C Expert systems are rarely implemented outside of the medical and scientific communities.
12
There are three levels of interdependence in integrated planning:
a. Pooled interdependence: There is a common source of resource, but no interrelationship between the work groups. b. Sequential Interdependence: The work groups coordinate the flow of information, tasks, or resources from one group to another. c. Reciprocal Interdependence: Information, tasks, and resources are passed back and forth between the groups.
12
Inflation may be measured using
1. Gross domestic product deflator
2. Wholesale price index.
3. Consumer price index
13
A high point of economic activity
Peak
13
When using a flexible budget, a decrease in production levels within a relevant range:
decreases total costs.
13
A system where several minicomputers are connected for communication and data transmission purposes, but where each computer can also process its own data, is known as a:
distributed data processing network.
13
Globalization suggests that firms need to take a serious look at the variety of implications of globalization for business strategies. Among the major factors that need to be considered are:
the need for scenario planning, which causes the firm to look at a number of different future possibilities for the firm under varying conditions of high uncertainty.
14
Measures the value of all final goods and services in current price
Nominal GDP
15
A company is looking into using a balanced scorecard in connection with the design, creation, distribution, and customer service for one of its products produced in Oregon. In connection with this use of a balanced scorecard, what is a value chain?
It is a sequence of the business processes which add usefulness to a product from inception to satisfactory use by a customer
16
The goal of management in a corporation should be to
Maximize shareholder wealth
17
Example of normal goods
Premium food such as steak & lobster
18
The goals and objectives upon which an annual profit plan is MOST effectively based are:
A combination of financial,quantitative, and qualitative measures
18
If the price inelasticity is zero, demand is
perfectly inelastic(Qty demanded stays the same NO matter how price change)
18
The purpose of regression analysis is
to use an independent variable to predict the value of another variable.It is a mathematical equation used to fit the best line possible to the observed data
19
If the income elasticity of demand is negative(demand decreases as income increased) the good is
Inferior Good
19
The external environment, in a strategic planning context, includes:
limitations, opportunities, and threats coming from competitors, governmental agencies, and other external sources.
20
Consumer price index measure
Rate of inflation
20
Globalization presents risks for multinational firms, including challenges due to
cultural differences, political risk due to unstable political systems in developing nations, a shift in the economic balance of power to emerging markets, and supply chain management risks.
20
Forecasting methods relies mostly on judgment?
Delphi
20
In order to comply with a director's duty of loyalty to a corporation, what action(s) should a director take when presented personally with a new business opportunity?
Offer the opportunity to the corporation and accept it only if the corporation rejects it
21
Business process re-engineering (BPR) identifies
identifies processes and workflows, analyzes processes and workflows, and designs processes and workflows
22
when projects have different expected returns, the project with the
lower coefficient of variation is preferred.
22
What is the effect on prices of U.S. imports and exports when the dollar depreciates?
Import prices will increase and export prices will decrease.
22
Change management control policies should contain which of the following elements?
1.Assess what impact each change will have on system availability, security, maintainability, and integrity 2. Require IT management to review, monitor, and approve all change requests 3. Ensure proper testing of changes before the changes are implemented in a production environment
22
What does business process re-engineering do within an organization?
Analyzes and designs workflows and processes
22
Change management control policies should contain which of the following elements?
1.Assess what impact each change will have on system availability, security, maintainability, and integrity 2. Require IT management to review, monitor, and approve all change requests 3. Ensure proper testing of changes before the changes are implemented in a production environment
23
What principle of the control environment states that NO more than 3 layers of organization existed b/w the CFO and the individual involved in financial reporting
Organizational Structure
23
Price is set BELOW the equilibruim price means:
Quantity demanded will exceed Quantity supplied causing a shortage
23
The simple interest method of calculating interest on loans does not consider:
interest on interest.
24
Computer program libraries can best be kept secure by:
restricting physical and logical access.
24
Regression analysis can be used to
develop simple regression equations of the type y = a + b(x), where a represents the constant (i.e., fixed) cost and b represents the variable rate
24
Change management control policies should contain which of the following elements?
1.Assess what impact each change will have on system availability, security, maintainability, and integrity 2. Require IT management to review, monitor, and approve all change requests 3. Ensure proper testing of changes before the changes are implemented in a production environment
25
can be adjusted to provide budgeted results based on actual production volume, by utilizing standard unit costs.
FLEXIBLE BUDGET
25
Who Is Hurt by Inflation:
A key group that is hurt by unanticipated inflation is those individuals who receive a fixed income.
25
Which of the following would not be appropriate to consider in the physical design of a data center?
Design of authorization tables for operating system access
25
The risk management process involves which of the following steps related to both internal and external controls?
Identifying and prioritizing risks and understanding their relevance; understanding the stakeholders' objectives and their tolerance for risk; and developing and implementing appropriate strategies in the context of a risk management policy
25
Which of the following procedures should be included in the disaster recovery plan for an information technology department?
Identification of critical applications
26
Regression analysis can be used to
develop simple regression equations of the type y = a + b(x), where a represents the constant (i.e., fixed) cost and b represents the variable rate
27
The increase in real GDP per capital over time
Economic Growth
27
is necessary to determine an organization's definition of a disaster and evaluate the effect of that disaster
Risk analysis
27
The purpose of regression analysis is
to use an independent variable to predict the value of another variable.It is a mathematical equation used to fit the best line possible to the observed data
27
The risk management process involves which of the following steps related to both internal and external controls?
Identifying and prioritizing risks and understanding their relevance; understanding the stakeholders' objectives and their tolerance for risk; and developing and implementing appropriate strategies in the context of a risk management policy
28
Fixed interest rate loans lock in a particular interest rate over the duration of a loan. If price levels and interest rates rise during this period:
borrowers benefit.
29
Real GDP is rising & unemployment is falling
Expansionary Phase
29
responsible for maintaining the database and restricting access to the database to authorized users only
The Database Administrator or DBA
30
Fixed interest rate loans lock in a particular interest rate over the duration of a loan. If price levels and interest rates rise during this period:
borrowers benefit.
31
Fixed unit cost along the relevant range will
Decrease as volume increase
32
Is expensed sparetely on the income statement as a period expense
Abnormal Spoilage
32
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Before the initiative begins our answer was incorrect After completion of the initiative During the initiative
32
Which of the following would not be appropriate to consider in the physical design of a data center?
Design of authorization tables for operating system access
32
The use of an accelerated method instead of the straight-line method of depreciation in computing the net present value of a project has the effect of:
increasing the present value of the depreciation tax shield.
33
The use of an accelerated method instead of the straight-line method of depreciation in computing the net present value of a project has the effect of:
increasing the present value of the depreciation tax shield.
33
The federal budget deficit is the:
amount by which the federal government's expenditures exceed its revenues in a given year.
34
Method by which to allocate joint costs
Average unit cost Relative weight, volume, or linear measure Relative sales value
34
What does business process re-engineering do within an organization?
Analyzes and designs workflows and processes
36
Access time in relation to computer processing is the amount of time it takes to:
retrieve data from memory.
37
Which of the following statements is correct concerning the security of messages in an electronic data interchange (EDI) system?
Encryption performed by a physically secure hardware device is more secure than encryption performed by software.
37
The purpose of the TDRA (top-down risk assessment) is for the company to analyze the internal controls currently in place and to assess the effectiveness of those controls so as to avoid material misstatement in the company's financial reporting. As part of that assessment process, which of the following items would be done?
As part of the TDRA, management will develop a list related to a particular account that would have a reasonable likelihood of material misstatement, focusing on problems that have been encountered in the past and the solutions that were developed to avoid such errors in the future.
38
To compare and contrast its financial information to published information reflecting optimal amounts
Benchmark
39
Which of the following is not a part of the change control process?
Controlling a control
39
The simple interest method of calculating interest on loans does not consider:
interest on interest.
39
Inflation may be measured using each of the following measures
gross domestic product deflator. wholesale price index. consumer price index
39
The forecasting technique most relevant for analyzing data prior to creation of a flexible budget is:
regression analysis.
40
The Sarbanes-Oxley Act changed the way financial reports are treated. What section of the act requires the CEO to review the financial statements?
Section 302
42
Price below the equilibrium price, which causes shortages to develop
Price Ceiling
42
There are three levels of interdependence in integrated planning:
a. Pooled interdependence: There is a common source of resource, but no interrelationship between the work groups. b. Sequential Interdependence: The work groups coordinate the flow of information, tasks, or resources from one group to another. c. Reciprocal Interdependence: Information, tasks, and resources are passed back and forth between the groups.
42
Fixed interest rate loans lock in a particular interest rate over the duration of a loan. If price levels and interest rates rise during this period:
borrowers benefit.
43
Simultaneously produced products of more than nominal value are classified as
Joint Products
43
Inflation may be measured using each of the following measures
1. gross domestic product deflator
2. wholesale price index
3. consumer price index
43
Gram Co. develops computer programs to meet customers' special requirements. How should Gram categorize payments to employees who develop these programs?
By direct costs and value-adding costs
44
The benefits of debt financing over equity financing are likely to be highest in
High marginal tax rates and few noninterest tax benefits
44
is the level to which work groups are organized
Interdependence
44
The online data entry control called preformatting is:
the display of a document with blanks for data items to be entered by the terminal operator.
44
Which of the following describes an off-shore operation?
A U.S. company incorporates in Japan.
44
Cost allocation is the process of assigning indirect costs to a cost object. The indirect costs are grouped in cost pools and then allocated by a common allocation base to the cost object. The base that is employed to allocate a homogeneous cost pool should:
have a cause-and-effect relationship with the cost items in the cost pool.
45
The four general perspectives used to structure a balanced scorecard are
financial, customer, internal business processes, and learning and growth.
45
participative budgeting is driven by
Lower-level management and employees, the resulting budget should still be aligned with overall company strategy and top management will still have final approval
45
The purpose of the TDRA (top-down risk assessment) is for the company to analyze the internal controls currently in place and to assess the effectiveness of those controls so as to avoid material misstatement in the company's financial reporting. As part of that assessment process, which of the following items would be done?
As part of the TDRA, management will develop a list related to a particular account that would have a reasonable likelihood of material misstatement, focusing on problems that have been encountered in the past and the solutions that were developed to avoid such errors in the future.
45
Who Is Hurt by Inflation:
A key group that is hurt by unanticipated inflation is those individuals who receive a fixed income.
45
A city ordinance that freezes rent prices may cause:
demand for rental space to exceed supply.
46
The McDougall Corporation wants to apply a performance measurement system that includes both financial and nonfinancial performance measures. What is most likely to be used by company management?
Balance scorecard
46
is the level to which work groups are organized
Interdependence
47
A manufacturer is considering using barcode identification for recording information on parts used by the manufacturer. A reason to use barcodes, rather than other means of identification, is to ensure that:
the movement of parts is easily and quickly recorded.
48
Cool Cola and Sparkle are substitute soft drinks. Which of the following would occur if the price of Cool Cola increased?
A The demand for Sparkle will increase and the demand curve shifts right.
49
Cost per unit measures
how cheaply goods can be turned into finished products
51
A disadvantage of the net present value method of capital expenditure evaluation is that it:
does not provide the true rate of return on investment.
52
Gram Co. develops computer programs to meet customers' special requirements. How should Gram categorize payments to employees who develop these programs?
By direct costs and value-adding costs
53
There are three levels of interdependence in integrated planning:
a. Pooled interdependence: There is a common source of resource, but no interrelationship between the work groups. b. Sequential Interdependence: The work groups coordinate the flow of information, tasks, or resources from one group to another. c. Reciprocal Interdependence: Information, tasks, and resources are passed back and forth between the groups.
54
They are dependent upon the level of production
Variable Costs
55
What makes money lose purchasing power:
Inflation
57
Consider cash receipt and cash disbursement processes as part of their risk assessment:
Financial Reporting Risk
58
Tale Company has two competitors in one of its major product segments. Recently one of those firms had its major product in that segment subjected to severe restrictions by a governmental regulatory body. These restrictions are likely to continue indefinitely. This action and its effect on Tale is an example of:
external environment.
58
What does integrated planning accomplish?
Participation of stakeholders and affected departments
59
The forecasting technique most relevant for analyzing data prior to creation of a flexible budget is:
regression analysis.
60
Real GDP in excess of potential GDP is often associated with
demand-pull inflation
61
Business Cycles result from shifts in
AD and/or AS
62
Which of the following is a tool that is useful in conducting a preliminary analysis of internal controls in an organization or organizational unit?
Flowcharting
63
What is the effect on prices of U.S. imports and exports when the dollar depreciates?
Import prices will and export prices will decrease.
63
The amount of inventory that a company would tend to hold in stock would increase as the:
cost of carrying inventory decreases.
63
Which of the following procedures should be included in the disaster recovery plan for an information technology department?
Identification of critical applications
64
Enhances the level of financial sophistication of the financial expert can serve as a resource for the audit committee
Is the primary benefit of having financial expert on a company's audit committee
66
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Organizations must collect data before, during, and after the implementation to reach a desired target
67
Which of the following statements is true? One framework for analyzing a reliable system is: -
presented by the AICPA's Trust Services. Trust Services provide assurance on information systems.
67
Computer program libraries can best be kept secure by:
restricting physical and logical access.
68
The external environment, in a strategic planning context, includes:
limitations, opportunities, and threats coming from competitors, governmental agencies, and other external sources.
68
relational databases uses
tables.
68
Inflation may be measured using each of the following measures
gross domestic product deflator. wholesale price index. consumer price index
69
is necessary to determine an organization's definition of a disaster and evaluate the effect of that disaster
Risk analysis
69
A disadvantage of the net present value method of capital expenditure evaluation is that it:
does not provide the true rate of return on investment.
70
Fixed interest rate loans lock in a particular interest rate over the duration of a loan. If price levels and interest rates rise during this period:
borrowers benefit.
70
Examples of leading indicators
New unemployment claims,Orders for consumer goods, consumer expectations, and issuance of building permits, lenght of workweek,money supply, prices of selected stock
71
Product demand is inelastic if
With few substitutes are available
72
What does integrated planning accomplish?
Participation of stakeholders and affected departments
74
Which of the following is not a part of the change control process?
Controlling a control
75
Currently, the U.S. tax code requires that transfer prices for multinational corporations are “arms length transactions.” Methods that are prescribed by the IRS for setting arm's length prices for tangible goods include all of the following except:
the target revenue approach. This method starts at a target selling price for the distribution affiliate that allows for a reasonable profit less the transfer price and any additional costs to cover overhead costs.
76
Focus on long term goal
Balance Scorecard
76
Which of the following would lead to a reduction in inflation
AD decrease AS increase
76
Off-shore operations” describes an organization
incorporating outside of the original jurisdiction of the primary operations.
76
Which of the following statements best describes the function of Job Control Language or JCL?
is a command language that initiates programs, specifies processing priorities, running sequences, databases used and files used. -
77
Who Is Hurt by Inflation:
A key group that is hurt by unanticipated inflation is those individuals who receive a fixed income.
78
The risk management process involves which of the following steps related to both internal and external controls?
Identifying and prioritizing risks and understanding their relevance; understanding the stakeholders' objectives and their tolerance for risk; and developing and implementing appropriate strategies in the context of a risk management policy
79
Performance measures should assess how well subunits and managers are meeting:
goals of the organization.
79
In distributed or cooperative systems
the responsibility for ensuring that adequate backups are taken is the responsibility of user management because the systems are under the control of users.
79
The advantage of virtual storage or virtual memory is:
It saves time and money
80
What are the 5 major processes carried out by project management?
1. Budget 2. Risk 3. Time 4. Quality 5. Resources
81
A natural extension of Activity Based Costing
Standard Costing System
82
Molly Moppet's boss, Stan Stodgy, is resisting converting from relying solely on a static master budget to incorporating flexible budgeting into their company's monthly budget and accountability process. Molly is attempting to explain the key difference between static and flexible budgets. Which of the following is this key difference?
A flexible budget is referred to as such because it can be adjusted to reflect different levels of production, whereas the master budget is based on one specific level of production -
82
Which of the following describes an off-shore operation?
A U.S. company incorporates in Japan.
84
A system where several minicomputers are connected for communication and data transmission purposes, but where each computer can also process its own data, is known as a:
distributed data processing network.
84
Globalization suggests that firms need to take a serious look at the variety of implications of globalization for business strategies. Among the major factors that need to be considered are:
the need for scenario planning, which causes the firm to look at a number of different future possibilities for the firm under varying conditions of high uncertainty.
85
Under COSO, according to SAS 78, management monitors controls for which of the following reasons?
To consider whether controls are operating as intended
86
A company has a current ratio of 4:1 and a quick ratio of 3:1. On the last day of the year, the company pays off an account payable. What is the impact of this transaction?
In a problem like this, it is often easy to set up an example. Assume, for example that the current ratio is $40,000 in current assets divided by $10,000 in current liabilities (a 4:1 ratio) and that the quick ratio is $30,000 in quick assets (current assets less inventory) divided by $10,000 in current liabilities (a 3:1 ratio). If a $5,000 account payable is paid with cash, the current ratio will be $35,000/$5,000 or 7:1 and the quick ratio will be $25,000/$5,000 or 5:1. The relative decrease in the current liabilities is greater than the impact on the assets. -
86
The Sarbanes-Oxley Act requires that all financial statements include:
all material off-balance-sheet liabilities, obligations, or transactions
87
Gram Co. develops computer programs to meet customers' special requirements. How should Gram categorize payments to employees who develop these programs?
By direct costs and value-adding costs
88
Hierarchical databases
use tree structures to organize data
89
Documented out of pocket expenses:
Explicit Costs
89
The use of an accelerated method instead of the straight-line method of depreciation in computing the net present value of a project has the effect of:
increasing the present value of the depreciation tax shield.
90
The purpose of the TDRA (top-down risk assessment) is for the company to analyze the internal controls currently in place and to assess the effectiveness of those controls so as to avoid material misstatement in the company's financial reporting. As part of that assessment process, which of the following items would be done?
As part of the TDRA, management will develop a list related to a particular account that would have a reasonable likelihood of material misstatement, focusing on problems that have been encountered in the past and the solutions that were developed to avoid such errors in the future.
91
By product is best described as:
A product that usually produces a small amount of revenue when compared to the main product revenue
91
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Before the initiative begins our answer was incorrect After completion of the initiative During the initiative
92
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Organizations must collect data before, during, and after the implementation to reach a desired target
94
The simple interest method of calculating interest on loans does not consider:
interest on interest.
96
Regression analysis can be used to
develop simple regression equations of the type y = a + b(x), where a represents the constant (i.e., fixed) cost and b represents the variable rate
97
Which of the following security controls might prevent unauthorized access to sensitive data via an unattended data terminal directly connected to a mainframe?
Automatic log-off of inactive users
97
There are three levels of interdependence in integrated planning:
a. Pooled interdependence: There is a common source of resource, but no interrelationship between the work groups. b. Sequential Interdependence: The work groups coordinate the flow of information, tasks, or resources from one group to another. c. Reciprocal Interdependence: Information, tasks, and resources are passed back and forth between the groups.
98
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
99
Best viewed as attention director and is an effective way to observe problems as they occur:
NON-financial
100
Which of the following is an example of collusive pricing?
Company A forms a secret agreement with Company B, its major competitor, to keep prices higher than they would be in a purely competitive environment -
100
The forecasting technique most relevant for analyzing data prior to creation of a flexible budget is:
regression analysis.
102
R Beck, Inc., has learned that 4,971 of 310,000 of its commercial DVDs over the past 12 months have arrived to the customer as blank discs with no data contained on them. Which improvement initiative would R Beck most likely adapt to reduce or eliminate the blank discs?
Six Sigma
102
The amount of inventory that a company would tend to hold in stock would increase as the:
cost of carrying inventory decreases.
104
Change management control policies should contain which of the following elements?
1.Assess what impact each change will have on system availability, security, maintainability, and integrity 2. Require IT management to review, monitor, and approve all change requests 3. Ensure proper testing of changes before the changes are implemented in a production environment
106
When real GDP is rising unemployment tends
to fall
107
Hierarchical databases
use tree structures to organize data
108
In order to comply with a director's duty of loyalty to a corporation, what action(s) should a director take when presented personally with a new business opportunity?
Offer the opportunity to the corporation and accept it only if the corporation rejects it
109
A bond that is rated below BBB is referred to as a(n)
Junk bond
110
Which of the following security controls might prevent unauthorized access to sensitive data via an unattended data terminal directly connected to a mainframe?
Automatic log-off of inactive users
110
A project manager's activities include all of the following, except:
establishing policies for IT.
111
Which of the following statements is correct concerning the security of messages in an electronic data interchange (EDI) system?
Encryption performed by a physically secure hardware device is more secure than encryption performed by software.
112
A disadvantage of the net present value method of capital expenditure evaluation is that it:
does not provide the true rate of return on investment.
112
Hierarchical databases
use tree structures to organize data
112
Hierarchical databases
use tree structures to organize data
114
when the inflation rate increase
Nominal Interest Rate increases
116
Used to measure economic growth
Real GDP per capita
116
Diffusion involves
setting aside the conflict situation and concentrating on less controversial issues.
117
Globalization suggests that firms need to take a serious look at the variety of implications of globalization for business strategies. Among the major factors that need to be considered are:
the need for scenario planning, which causes the firm to look at a number of different future possibilities for the firm under varying conditions of high uncertainty.
118
Computer program libraries can best be kept secure by:
restricting physical and logical access.
119
What is a call option
The right to purchase a security at a specific price for a defined period of time
120
Business process re-engineering (BPR) identifies
identifies processes and workflows, analyzes processes and workflows, and designs processes and workflows
122
A city ordinance that freezes rent prices may cause:
demand for rental space to exceed supply.
122
Tale Company has two competitors in one of its major product segments. Recently one of those firms had its major product in that segment subjected to severe restrictions by a governmental regulatory body. These restrictions are likely to continue indefinitely. This action and its effect on Tale is an example of:
external environment.
122
Which of the following is a tool that is useful in conducting a preliminary analysis of internal controls in an organization or organizational unit?
Flowcharting
123
Which of the following is the most common formula to determine a company’s operating profit margin?
Operating profit/net sales
125
Which of the following is a tool that is useful in conducting a preliminary analysis of internal controls in an organization or organizational unit?
Flowcharting
126
Internal business processes should be measured based
on how well the company manages to do a particular process
126
The change control process helps
an organization identify a change, review the effectiveness of the change, approve the change, and implement the change.
126
The external environment, in a strategic planning context, includes:
limitations, opportunities, and threats coming from competitors, governmental agencies, and other external sources.
127
The use of an accelerated method instead of the straight-line method of depreciation in computing the net present value of a project has the effect of:
increasing the present value of the depreciation tax shield.
128
Short-term interest rates are:
generally lower than long-term rates.
129
The federal budget deficit is the:
amount by which the federal government's expenditures exceed its revenues in a given year.
130
When using a flexible budget, a decrease in production levels within a relevant range:
decreases total costs.
131
The current ratio and the quick ratio (also known as the acid test ratio) are both liquidity ratios which are used to reflect a company’s ability to pay its current debts as they come due. What is the difference in the computation of the current ratio and the quick ratio?
A The quick ratio removes inventory from current assets and the current ratio does not.
131
Computer program libraries can best be kept secure by:
restricting physical and logical access.
132
the major advantage of debt financing is
is in lowering taxes. This advantage is greatest in periods of high marginal tax rates and few noninterest tax benefits.
133
Is a computer based trading network that lacks a single physical location and is NOT a stock exchange
NASDAQ
133
If the income elasticity of demand is positive(demand increase as income increase) the good is
Normal Good
133
Which of the following would not be appropriate to consider in the physical design of a data center?
Design of authorization tables for operating system access
133
What is the effect on prices of U.S. imports and exports when the dollar depreciates?
Import prices will increase and export prices will decrease.
135
A balanced scorecard will include strategic objectives of the organization. A statement indicates what each strategy is intended to achieve and those factors that are critical to success. Performance measures for that strategy are then included. What information is provided about the performance measures that are going to be used by an organization?
The reason why particular performance measures will be used to gauge success in meeting the strategy and how those measures will be tracked
136
Inflation may be measured using each of the following measures
gross domestic product deflator. wholesale price index. consumer price index
137
What does business process re-engineering do within an organization?
Analyzes and designs workflows and processes
139
Everything else equal, what happens to the market equilibrium for cell phones if input prices for making cell phones increases?
The supply of cell phones decreases and the price of cell phones rises.
139
What is the difference between a product and a period cost?
A Product costs can be associated with production but period costs are not and, thus, are recognized in the period incurred.
141
A computer system that converts the inputs into data that allows management to make unstructured decisions concerning the company's future is:
a strategic information system.
142
Tale Company has two competitors in one of its major product segments. Recently one of those firms had its major product in that segment subjected to severe restrictions by a governmental regulatory body. These restrictions are likely to continue indefinitely. This action and its effect on Tale is an example of:
external environment.
143
What is the normal shape of the yield curve?
Upward sloping
144
When unemployment rate is rising
Inflation rate falls
145
Interest on debt is
tax deductible by a corporation, while dividends paid are not
146
A computer system that converts the inputs into data that allows management to make unstructured decisions concerning the company's future is:
a strategic information system.
148
Studies consumers,producers, and supplies operating in a narrowly define market
Microeconomics
149
The purpose of the TDRA (top-down risk assessment) is for the company to analyze the internal controls currently in place and to assess the effectiveness of those controls so as to avoid material misstatement in the company's financial reporting. As part of that assessment process, which of the following items would be done?
As part of the TDRA, management will develop a list related to a particular account that would have a reasonable likelihood of material misstatement, focusing on problems that have been encountered in the past and the solutions that were developed to avoid such errors in the future.
150
The federal budget deficit is the:
amount by which the federal government's expenditures exceed its revenues in a given year.
151
A computer system that converts the inputs into data that allows management to make unstructured decisions concerning the company's future is:
a strategic information system.
152
Which of the following is not a part of the change control process?
Controlling a control
154
The U.S. balance of trade is decreased by:
U.S. imports.
154
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Organizations must collect data before, during, and after the implementation to reach a desired target
155
Computer program libraries can best be kept secure by:
restricting physical and logical access.
156
A project manager's activities include all of the following, except:
establishing policies for IT.
157
Interest on debt is
tax deductible by a corporation, while dividends paid are not
158
The forecasting technique most relevant for analyzing data prior to creation of a flexible budget is:
regression analysis.
159
Access time in relation to computer processing is the amount of time it takes to:
retrieve data from memory.
160
Interest on debt is
tax deductible by a corporation, while dividends paid are not
161
Fixed interest rate loans lock in a particular interest rate over the duration of a loan. If price levels and interest rates rise during this period:
borrowers benefit.
162
Performance measures should assess how well subunits and managers are meeting:
goals of the organization.
163
One common definition of a value chain is that it is - See more at: http://www.cpareviewforfree.com/exams.cfm?name=question&test\_id=2957550#sthash.aq50fKO0.dpuf
the sequential set of primary and support activities that an enterprise performs to turn inputs into value-added outputs for its external customers.”
163
Company elects to balance its portfolio of risk with property investments on the cost of other states:
Risk Reduction
164
The following possiblitles deal with the ongoing or periodic assessment of the quality of internal control by an entity's own mgmt
Monitoring Activities
165
Used when a firm sells its accounts receivable at a discount in order to get immediate cash?
FACTORING
166
Useful in conducting a preliminary analysis of internal controls in an organization or organizational unit:
Flowcharting
168
Simultaneously produced products while those of relatively small or insignificant sale value are classified as
By products
168
Security controls might prevent unauthorized access to sensitive data via an unattended data terminal directly connected to a mainframe?
Automatic log-off of inactive users
169
Function should maintain documentation as to the details of an applications program:
Applications Programmer
171
Fixed interest rate loans lock in a particular interest rate over the duration of a loan. If price levels and interest rates rise during this period:
borrowers benefit.
173
A manufacturer is considering using barcode identification for recording information on parts used by the manufacturer. A reason to use barcodes, rather than other means of identification, is to ensure that:
the movement of parts is easily and quickly recorded.
175
The relationship between the unemployment rate and the inflation rate is called
the Phillips curve
175
In order to comply with a director's duty of loyalty to a corporation, what action(s) should a director take when presented personally with a new business opportunity?
Offer the opportunity to the corporation and accept it only if the corporation rejects it
176
The Sarbanes-Oxley Act changed the way financial reports are treated. What section of the act requires the CEO to review the financial statements?
Section 302
177
An investor uses risk analysis to measure the probability of the variability of future returns from a proposed investment. What is the approach that is based upon utility theory and compels the decision maker to choose at what point he or she is indifferent to the choice between a certain amount of money and the expected value of a risky amount?
Certainty equivalent adjustments
177
Which of the following is a tool that is useful in conducting a preliminary analysis of internal controls in an organization or organizational unit?
Flowcharting
179
The external environment, in a strategic planning context, includes:
limitations, opportunities, and threats coming from competitors, governmental agencies, and other external sources.
180
The Sarbanes-Oxley Act requires that all financial statements include:
all material off-balance-sheet liabilities, obligations, or transactions
182
Off-shore operations” describes an organization
incorporating outside of the original jurisdiction of the primary operations.
182
Change management control policies should contain which of the following elements?
1.Assess what impact each change will have on system availability, security, maintainability, and integrity 2. Require IT management to review, monitor, and approve all change requests 3. Ensure proper testing of changes before the changes are implemented in a production environment
183
When we observe a 5% increase in the price of product W there is a corresponding 2% increase in the quantity demanded for product Z. Which of the following is true?
Products W and Z are substitutes.
184
When currency depreciates in a country than its trading partners:
Goods will be cheap for foreigner while foreign goods will become expensive for its residents
184
A key components of control envirnoment
Management Action
184
A manufacturer is considering using barcode identification for recording information on parts used by the manufacturer. A reason to use barcodes, rather than other means of identification, is to ensure that:
the movement of parts is easily and quickly recorded.
185
R Beck, Inc., has learned that 4,971 of 310,000 of its commercial DVDs over the past 12 months have arrived to the customer as blank discs with no data contained on them. Which improvement initiative would R Beck most likely adapt to reduce or eliminate the blank discs?
Six Sigma
185
Flowcharting software could be used to reduce
the cost of preparing and updating flowcharts.
186
Who Is Hurt by Inflation:
A key group that is hurt by unanticipated inflation is those individuals who receive a fixed income.
187
How many levels of interdependence are included in integrated planning?
Three levels
189
Classification of simultaneously produced products as joint product or by products is determined by
their relatives sales values.
190
The use of an accelerated method instead of the straight-line method of depreciation in computing the net present value of a project has the effect of:
increasing the present value of the depreciation tax shield.
191
DuPont ROI (return on investment) analysis looks at the traditional ROI computation as being driven by two separate factors. What are those two factors?
Return on sales and asset turnover
192
Uses analysis of production processed to ensure that resources stay within target costs:
Kaizen
193
A minimum price set above the equilibrium price, which causes surpluses to develop
Price Floor
193
The U.S. balance of trade is decreased by:
U.S. imports.
194
When two investments have the same expected return, the project with the
lower standard deviation is preferred
195
There are three levels of interdependence in integrated planning:
a. Pooled interdependence: There is a common source of resource, but no interrelationship between the work groups. b. Sequential Interdependence: The work groups coordinate the flow of information, tasks, or resources from one group to another. c. Reciprocal Interdependence: Information, tasks, and resources are passed back and forth between the groups.
196
Flowcharting software could be used to reduce
the cost of preparing and updating flowcharts.
196
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Before the initiative begins our answer was incorrect After completion of the initiative During the initiative
198
Computer program libraries can best be kept secure by:
restricting physical and logical access.
199
A disadvantage of the net present value method of capital expenditure evaluation is that it:
does not provide the true rate of return on investment.
199
Which of the following steps in the strategic planning process should be completed first?
Create a mission statement.
200
The O’Flynn Company manufactures a product using a series of approximately 35 separate operations. The company attempts to gain as much efficiency as possible in this process by benchmarking. What is meant here by the use of benchmarking?
Benchmarking is a company’s attempt to compare activities in a process against a target level of performance
200
is necessary to determine an organization's definition of a disaster and evaluate the effect of that disaster
Risk analysis
202
The Sarbanes-Oxley Act changed the way financial reports are treated. What section of the act requires the CEO to review the financial statements?
Section 302
203
The simple interest method of calculating interest on loans does not consider:
interest on interest.
205
Currently, the U.S. tax code requires that transfer prices for multinational corporations are “arms length transactions.” Methods that are prescribed by the IRS for setting arm's length prices for tangible goods include all of the following except:
the target revenue approach. This method starts at a target selling price for the distribution affiliate that allows for a reasonable profit less the transfer price and any additional costs to cover overhead costs.
206
The distribution of overhead costs is known as:
Cost Allocation
207
A city ordinance that freezes rent prices may cause:
demand for rental space to exceed supply.
208
relational databases
use tables.
209
What are the two approaches to measuring GDP
Expenditure Approach Income Approach
210
Which of the following statements is correct concerning the security of messages in an electronic data interchange (EDI) system?
Encryption performed by a physically secure hardware device is more secure than encryption performed by software.
211
The risk management process involves which of the following steps related to both internal and external controls?
Identifying and prioritizing risks and understanding their relevance; understanding the stakeholders' objectives and their tolerance for risk; and developing and implementing appropriate strategies in the context of a risk management policy
211
Which of the following would not be appropriate to consider in the physical design of a data center?
Design of authorization tables for operating system access
212
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Organizations must collect data before, during, and after the implementation to reach a desired target
213
The risk management process involves which of the following steps related to both internal and external controls?
Identifying and prioritizing risks and understanding their relevance; understanding the stakeholders' objectives and their tolerance for risk; and developing and implementing appropriate strategies in the context of a risk management policy
213
The U.S. balance of trade is decreased by:
U.S. imports.
214
Are opportunity costs of inputs supplied by the owners
Implicit Costs
215
Which of the following describes an off-shore operation?
A U.S. company incorporates in Japan.
216
Performance measures should assess how well subunits and managers are meeting:
goals of the organization.
218
Globalization suggests that firms need to take a serious look at the variety of implications of globalization for business strategies. Among the major factors that need to be considered are:
the need for scenario planning, which causes the firm to look at a number of different future possibilities for the firm under varying conditions of high uncertainty.
219
Even with the best designed, internal control systems can fail due to:
Human error Faulty Judgment Collusion Mgmt Override
220
Which of the following causes a reduction in the quantity demanded of product X?
The price of X increases.
222
Under oligopoly, strategic plan focus on:
Maintaining the market shares, ensuring product differentiation and adapting to price changes of required changes in production volume
224
is necessary to determine an organization's definition of a disaster and evaluate the effect of that disaster
Risk analysis
225
Off-shore operations” describes an organization
incorporating outside of the original jurisdiction of the primary operations.
226
When real GDP is below the potential level of output:
The economy will typically be experiencing a recession
226
Interest on debt is
tax deductible by a corporation, while dividends paid are not
226
Hierarchical databases
use tree structures to organize data
228
The Sarbanes-Oxley Act requires that all financial statements include:
all material off-balance-sheet liabilities, obligations, or transactions
229
Off-shore operations” describes an organization
incorporating outside of the original jurisdiction of the primary operations.
231
Diffusion involves
setting aside the conflict situation and concentrating on less controversial issues.
232
The purpose of regression analysis is
to use an independent variable to predict the value of another variable.It is a mathematical equation used to fit the best line possible to the observed data
233
A company buys a $10,000 bond from the XY Corporation on an open market. The bond pays a set annual interest rate of 6 percent over its five-year life. What is meant by interest rate risk as is applies to this bond?
The risk that other interest rates will rise so that the value of this bond will fall.
235
Inflation may be measured using each of the following measures
gross domestic product deflator. wholesale price index. consumer price index
236
Flowcharting software could be used to reduce
the cost of preparing and updating flowcharts.
236
What does integrated planning accomplish?
Participation of stakeholders and affected departments
238
Forecasting methods that relies mostly on judgment
Delphi
239
A major advantage in the adoption and use of electronic commerce lies in the replacement of :
Paper documents
240
An investor uses risk analysis to measure the probability of the variability of future returns from a proposed investment. What is the approach that is based upon utility theory and compels the decision maker to choose at what point he or she is indifferent to the choice between a certain amount of money and the expected value of a risky amount?
Certainty equivalent adjustments
241
Forecasting methods relies mostly on judgment?
Delphi
241
The purpose of regression analysis is
to use an independent variable to predict the value of another variable.It is a mathematical equation used to fit the best line possible to the observed data
242
Diffusion involves
setting aside the conflict situation and concentrating on less controversial issues.
244
The benefits of debt financing over equity financing are likely to be highest in which of the following situations?
High marginal tax rates and few noninterest tax benefits
245
the major advantage of debt financing is
is in lowering taxes. This advantage is greatest in periods of high marginal tax rates and few noninterest tax benefits.
246
A disadvantage of the net present value method of capital expenditure evaluation is that it:
does not provide the true rate of return on investment.
246
Interest on debt is
tax deductible by a corporation, while dividends paid are not
247
The federal budget deficit is the:
amount by which the federal government's expenditures exceed its revenues in a given year.
248
A computer system that converts the inputs into data that allows management to make unstructured decisions concerning the company's future is:
a strategic information system.
249
A disadvantage of the net present value method of capital expenditure evaluation is that it:
does not provide the true rate of return on investment.
251
When using a flexible budget, a decrease in production levels within a relevant range:
decreases total costs.
253
Occurs when two or more products which are produced simultaneously can be specifically identified and separated as individual products
The Split off point
253
Performance measures should assess how well subunits and managers are meeting:
goals of the organization.
254
Short-term interest rates are:
generally lower than long-term rates.
255
A city ordinance that freezes rent prices may cause:
demand for rental space to exceed supply.
255
Who Is Hurt by Inflation:
A key group that is hurt by unanticipated inflation is those individuals who receive a fixed income.
256
The purpose of regression analysis is
to use an independent variable to predict the value of another variable.It is a mathematical equation used to fit the best line possible to the observed data
257
What determines equilibrium price?
Interaction of demand & supply
258
The external environment, in a strategic planning context, includes:
limitations, opportunities, and threats coming from competitors, governmental agencies, and other external sources.
259
Gram Co. develops computer programs to meet customers' special requirements. How should Gram categorize payments to employees who develop these programs?
By direct costs and value-adding costs
260
What is the purpose of producing a balanced scorecard for an operation?
It outlines strategic objectives and then shows how the company’s success in those objectives will be measured and evaluated.
262
A system where several minicomputers are connected for communication and data transmission purposes, but where each computer can also process its own data, is known as a:
distributed data processing network.
263
equal to the periodic rate times the number of periods per year.
APR
264
Which of the following forecasting methods relies mostly on judgment?
Delphi
265
In order to comply with a director's duty of loyalty to a corporation, what action(s) should a director take when presented personally with a new business opportunity?
Offer the opportunity to the corporation and accept it only if the corporation rejects it
267
Nonfinancial measures useful in evaluating the performance of a manufacturing systems
1.Throughput time 2.Total setup time for machine/total production time 3.Number of rework units/total number of units completed
268
is the level to which work groups are organized
Interdependence
269
The amount of inventory that a company would tend to hold in stock would increase as the:
cost of carrying inventory decreases.
271
Access time in relation to computer processing is the amount of time it takes to:
retrieve data from memory.
273
Measure of how sensitive the demand for or the supply of a product is to a change in price
Elasticity
274
Inflation may be measured using each of the following measures
gross domestic product deflator. wholesale price index. consumer price index
275
Globalization suggests that firms need to take a serious look at the variety of implications of globalization for business strategies. Among the major factors that need to be considered are:
the need for scenario planning, which causes the firm to look at a number of different future possibilities for the firm under varying conditions of high uncertainty.
277
Mgmt is so fearful of the possibility of storm damage that they elect to divest or discontinues a product line:
Risk Avoidance
278
The risk management process involves which of the following steps related to both internal and external controls?
Identifying and prioritizing risks and understanding their relevance; understanding the stakeholders' objectives and their tolerance for risk; and developing and implementing appropriate strategies in the context of a risk management policy
278
When using a flexible budget, a decrease in production levels within a relevant range:
decreases total costs.
280
What is “commercial paper?”
Unsecured promissory notes issued to the public by corporations with up to a nine month maturity period
282
A major advantage in the adoption and use of electronic commerce lies in the replacement of which of the following?
Paper documents
283
The Sarbanes-Oxley Act requires that all financial statements include:
all material off-balance-sheet liabilities, obligations, or transactions
284
The benefits of debt financing over equity financing are likely to be highest in which of the following situations?
High marginal tax rates and few noninterest tax benefits
286
The amount of inventory that a company would tend to hold in stock would increase as the:
cost of carrying inventory decreases.
287
There are three levels of interdependence in integrated planning:
a. Pooled interdependence: There is a common source of resource, but no interrelationship between the work groups. b. Sequential Interdependence: The work groups coordinate the flow of information, tasks, or resources from one group to another. c. Reciprocal Interdependence: Information, tasks, and resources are passed back and forth between the groups.
288
A company is producing a balanced scorecard and officials have decided that a strategic objective should be to ensure that customers are satisfied when working with the company. Consequently, the number of customer complaints on a daily basis will serve as a performance measure. In creating a balanced scorecard, which of the following should be next?
Baseline Performance, Targets, and Strategic Initiatives
290
The simple interest method of calculating interest on loans does not consider:
interest on interest.
292
Under monopoly, strategic plan focus on
Profitablity from production levels that maximize profit, IGNORE market share
293
How many levels of interdependence are included in integrated planning?
Three levels
294
How many levels of interdependence are included in integrated planning?
Three levels
295
measure of the overall cost of a fixed basket of goods and services purchases by an average household
Consumer Price Index(CPI)
295
Which of the following security controls might prevent unauthorized access to sensitive data via an unattended data terminal directly connected to a mainframe?
Automatic log-off of inactive users
297
A major advantage in the adoption and use of electronic commerce lies in the replacement of which of the following?
Paper documents
298
Which of the following is not a part of the change control process?
Controlling a control
300
Regression analysis can be used to
develop simple regression equations of the type y = a + b(x), where a represents the constant (i.e., fixed) cost and b represents the variable rate
301
A city ordinance that freezes rent prices may cause:
demand for rental space to exceed supply.
303
Access time in relation to computer processing is the amount of time it takes to:
retrieve data from memory.
304
Which of the following procedures should be included in the disaster recovery plan for an information technology department?
Identification of critical applications
305
What does integrated planning accomplish?
Participation of stakeholders and affected departments
306
Which of the following budgets focuses on the income statement and its supporting schedules?
Operating budget
307
Business process re-engineering (BPR) identifies
identifies processes and workflows, analyzes processes and workflows, and designs processes and workflows
309
Establish what is the standard for quality
Planning
310
Which of the following would not be appropriate to consider in the physical design of a data center?
Design of authorization tables for operating system access
311
Computer program libraries can best be kept secure by:
restricting physical and logical access.
312
The study of the economy as a whole
Macroeconomic
313
R Beck, Inc., has learned that 4,971 of 310,000 of its commercial DVDs over the past 12 months have arrived to the customer as blank discs with no data contained on them. Which improvement initiative would R Beck most likely adapt to reduce or eliminate the blank discs?
Six Sigma
314
Which of the following is not a part of the change control process?
Controlling a control
315
Flowcharting software could be used to reduce
the cost of preparing and updating flowcharts.
316
The Sarbanes-Oxley Act changed the way financial reports are treated. What section of the act requires the CEO to review the financial statements?
Section 302
318
The Sarbanes-Oxley Act changed the way financial reports are treated. What section of the act requires the CEO to review the financial statements?
Section 302
318
Which of the following would not be appropriate to consider in the physical design of a data center?
Design of authorization tables for operating system access
319
A system where several minicomputers are connected for communication and data transmission purposes, but where each computer can also process its own data, is known as a:
distributed data processing network.
321
is necessary to determine an organization's definition of a disaster and evaluate the effect of that disaster
Risk analysis
322
The arithmetic/logic unit of the CPU:
A Is the circuirty that performs the arithmetic calculations and logical operations
323
What is the effect on prices of U.S. imports and exports when the dollar depreciates?
Import prices will increase and export prices will decrease.
325
the major advantage of debt financing is
is in lowering taxes. This advantage is greatest in periods of high marginal tax rates and few noninterest tax benefits.
326
The most common approach in use to the application of overhead is:
Expected Annual Capacity
326
Inflation may be measured using each of the following measures
gross domestic product deflator. wholesale price index. consumer price index
327
Defined as a sustained increase in the general prices of good & services
Inflation
328
The amount of inventory that a company would tend to hold in stock would increase as the:
cost of carrying inventory decreases.
329
Who Is Hurt by Inflation:
A key group that is hurt by unanticipated inflation is those individuals who receive a fixed income.
331
What is the primary reason that the management of a manufacturing company might carry out cost-volume-profit analysis? - See more at: http://www.cpareviewforfree.com/exams.cfm?name=question&test\_id=2958117#sthash.HJ4RbNX2.dpuf
Profitability estimates can be made at all levels of production within the relevant range. - See more at: http://www.cpareviewforfree.com/exams.cfm?name=question&test\_id=2958117#sthash.HJ4RbNX2.dpuf
333
What causes inflation and/or deflation
Shift in AD and SRAS curves
334
The amount of inventory that a company would tend to hold in stock would increase as the:
cost of carrying inventory decreases.
335
Predict business cycles and their severity and duration using
Economic Indicators
336
When a company elect to buy insurance to cover potential losses
Risk Sharing
337
The forecasting technique most relevant for analyzing data prior to creation of a flexible budget is:
regression analysis.
339
Method of accounting for joint product costs that will produce the same gross-profit rate for all products
Relative Sales-value method
340
When consumer income decreased, the consumption of lunchmeat fell and the consumption of peanut butter increased. Everything else equal, which of the following must be true?
Peanut butter is an inferior good.
341
The benefits of debt financing over equity financing are likely to be highest in which of the following situations?
High marginal tax rates and few noninterest tax benefits
342
The U.S. balance of trade is decreased by:
U.S. imports.
343
The forecasting technique most relevant for analyzing data prior to creation of a flexible budget is:
regression analysis.
344
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Organizations must collect data before, during, and after the implementation to reach a desired target
345
Which of the following statements best describes the function of Job Control Language or JCL? - See more at: http://www.cpareviewforfree.com/exams.cfm?name=question&test\_id=2959309#sthash.NXaUWwbW.dpuf
A A language that prioritizes and controls when application programs are initiated.
345
The steps in project management are:
project initiation, project planning, project execution, project monitoring and control, and project closure
346
The Sarbanes-Oxley Act changed the way financial reports are treated. What section of the act requires the CEO to review the financial statements?
Section 302
346
A project manager's activities include all of the following, except:
establishing policies for IT.
348
The total market value of all final goods & services PRODUCED within the boarder of a nation in a particular time period
GDP
349
Currently, the U.S. tax code requires that transfer prices for multinational corporations are “arms length transactions.” Methods that are prescribed by the IRS for setting arm's length prices for tangible goods include all of the following except:
the target revenue approach. This method starts at a target selling price for the distribution affiliate that allows for a reasonable profit less the transfer price and any additional costs to cover overhead costs.
350
The online data entry control called preformatting is:
the display of a document with blanks for data items to be entered by the terminal operator.
351
Measures deviations from process standard
Control Chart
353
The Sarbanes-Oxley Act requires that all financial statements include:
all material off-balance-sheet liabilities, obligations, or transactions
354
In order to comply with a director's duty of loyalty to a corporation, what action(s) should a director take when presented personally with a new business opportunity?
Offer the opportunity to the corporation and accept it only if the corporation rejects it
355
The benefits of debt financing over equity financing are likely to be highest in which of the following situations?
High marginal tax rates and few noninterest tax benefits
356
In order to comply with a director's duty of loyalty to a corporation, what action(s) should a director take when presented personally with a new business opportunity?
Offer the opportunity to the corporation and accept it only if the corporation rejects it
358
Which of the following forecasting methods relies mostly on judgment?
Delphi
359
The purpose of the TDRA (top-down risk assessment) is for the company to analyze the internal controls currently in place and to assess the effectiveness of those controls so as to avoid material misstatement in the company's financial reporting. As part of that assessment process, which of the following items would be done?
As part of the TDRA, management will develop a list related to a particular account that would have a reasonable likelihood of material misstatement, focusing on problems that have been encountered in the past and the solutions that were developed to avoid such errors in the future.
360
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Before the initiative begins our answer was incorrect After completion of the initiative During the initiative
361
Examples of Decision Support System(DSS)
Sensitivity analysis application Database query application Financial model application
362
A manufacturer is considering using barcode identification for recording information on parts used by the manufacturer. A reason to use barcodes, rather than other means of identification, is to ensure that:
the movement of parts is easily and quickly recorded.
364
A firm's target or optimal capital structure is consistent with:
Minimum Weighted Average Cost of Capital or Miniminizing the cost of debt & equity
366
Change management control policies should contain which of the following elements?
1.Assess what impact each change will have on system availability, security, maintainability, and integrity 2. Require IT management to review, monitor, and approve all change requests 3. Ensure proper testing of changes before the changes are implemented in a production environment
367
Which function is generally responsible for writing programs for commercial use?
Internet Developer
368
What does integrated planning accomplish?
Participation of stakeholders and affected departments
369
Which of the following forecasting methods relies mostly on judgment?
Delphi
370
is the level to which work groups are organized
Interdependence
372
Which of the following describes an off-shore operation?
A U.S. company incorporates in Japan.
373
The U.S. balance of trade is decreased by:
U.S. imports.
375
The U.S. balance of trade is decreased by:
U.S. imports.
376
In Process costing:
All costs are assigned to products
376
The benefits of debt financing over equity financing are likely to be highest in which of the following situations?
High marginal tax rates and few noninterest tax benefits
377
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
379
Independent of the level of production:
Fixed Costs
381
Hierarchical databases
use tree structures to organize data
383
Betty Brainy is attempting to decipher the causes for the unusually high rate of inflation in the country of Teenistan. She has gathered several contributing factors, all of which are possible explanations for this increased inflation, EXCEPT: -
CTeenistan's potential GDP may exceed its real GDP, causing a shortage of labor and higher prices for goods and services.
384
relational databases
use tables.
385
The change control process helps
an organization identify a change, review the effectiveness of the change, approve the change, and implement the change.
387
The use of an accelerated method instead of the straight-line method of depreciation in computing the net present value of a project has the effect of:
increasing the present value of the depreciation tax shield.
389
A computer system that converts the inputs into data that allows management to make unstructured decisions concerning the company's future is:
a strategic information system.
390
The use of an accelerated method instead of the straight-line method of depreciation in computing the net present value of a project has the effect of:
increasing the present value of the depreciation tax shield.
391
A manufacturer is considering using barcode identification for recording information on parts used by the manufacturer. A reason to use barcodes, rather than other means of identification, is to ensure that:
the movement of parts is easily and quickly recorded.
391
Which of the following management practices involves concentrating on areas that deserve attention and placing less attention on areas operating as expected?
Management by exception
392
The Sarbanes-Oxley Act changed the way financial reports are treated. What section of the act requires the CEO to review the financial statements?
Section 302
393
is the level to which work groups are organized
Interdependence
394
Refers to the level of real GDP(national output) that the economy would produce if its resources(capital and labor)were fully employed
Potential GDP
395
Tale Company has two competitors in one of its major product segments. Recently one of those firms had its major product in that segment subjected to severe restrictions by a governmental regulatory body. These restrictions are likely to continue indefinitely. This action and its effect on Tale is an example of:
external environment.
397
What is the effect on prices of U.S. imports and exports when the dollar depreciates?
Import prices will increase and export prices will decrease.
398
There are three levels of interdependence in integrated planning:
a. Pooled interdependence: There is a common source of resource, but no interrelationship between the work groups. b. Sequential Interdependence: The work groups coordinate the flow of information, tasks, or resources from one group to another. c. Reciprocal Interdependence: Information, tasks, and resources are passed back and forth between the groups.
400
Access time in relation to computer processing is the amount of time it takes to:
retrieve data from memory.
402
Change management control policies should contain which of the following elements?
1.Assess what impact each change will have on system availability, security, maintainability, and integrity 2. Require IT management to review, monitor, and approve all change requests 3. Ensure proper testing of changes before the changes are implemented in a production environment
404
Tale Company has two competitors in one of its major product segments. Recently one of those firms had its major product in that segment subjected to severe restrictions by a governmental regulatory body. These restrictions are likely to continue indefinitely. This action and its effect on Tale is an example of:
external environment.
406
R Beck, Inc., has learned that 4,971 of 310,000 of its commercial DVDs over the past 12 months have arrived to the customer as blank discs with no data contained on them. Which improvement initiative would R Beck most likely adapt to reduce or eliminate the blank discs?
Six Sigma
407
Performance measures should assess how well subunits and managers are meeting:
goals of the organization.
408
Off-shore operations” describes an organization
incorporating outside of the original jurisdiction of the primary operations.
410
Fixed interest rate loans lock in a particular interest rate over the duration of a loan. If price levels and interest rates rise during this period:
borrowers benefit.
411
Which of the following statements is correct concerning the security of messages in an electronic data interchange (EDI) system?
Encryption performed by a physically secure hardware device is more secure than encryption performed by software.
411
Diffusion involves
setting aside the conflict situation and concentrating on less controversial issues.
413
The purpose of the TDRA (top-down risk assessment) is for the company to analyze the internal controls currently in place and to assess the effectiveness of those controls so as to avoid material misstatement in the company's financial reporting. As part of that assessment process, which of the following items would be done?
As part of the TDRA, management will develop a list related to a particular account that would have a reasonable likelihood of material misstatement, focusing on problems that have been encountered in the past and the solutions that were developed to avoid such errors in the future.
414
Is the core of foundation of any system of internal control
Control Environment
415
Interest on debt is
tax deductible by a corporation, while dividends paid are not
416
A recession can be caused by
A decrease in AS and AD
418
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
419
Which of the following statements regarding segregation of IT duties is not true?
Segregation of controls allows information systems departments to initiate transactions and authorize transactions.
420
Currently, the U.S. tax code requires that transfer prices for multinational corporations are “arms length transactions.” Methods that are prescribed by the IRS for setting arm's length prices for tangible goods include all of the following except:
the target revenue approach. This method starts at a target selling price for the distribution affiliate that allows for a reasonable profit less the transfer price and any additional costs to cover overhead costs.
421
used to identify causes and effects of defects
Ishikawa (or fishbone) diagrams
422
R Beck, Inc., has learned that 4,971 of 310,000 of its commercial DVDs over the past 12 months have arrived to the customer as blank discs with no data contained on them. Which improvement initiative would R Beck most likely adapt to reduce or eliminate the blank discs?
Six Sigma
423
Who Is Hurt by Inflation:
A key group that is hurt by unanticipated inflation is those individuals who receive a fixed income.
425
Which of the following security controls might prevent unauthorized access to sensitive data via an unattended data terminal directly connected to a mainframe?
Automatic log-off of inactive users
426
Which of the following describes the relationship between inflation and the unemployment rate? -
When the unemployment rate falls the inflation rate increases at an increasing rate.
426
What does business process re-engineering do within an organization?
Analyzes and designs workflows and processes
427
What does integrated planning accomplish?
Participation of stakeholders and affected departments
429
Lynn Dissinger has been hired as the investment strategy manager at her company and is identifying the various types of risk the company is facing in its investment activity. Which of the following statements about investment risk is FALSE? -
C The company's exposure to loss on its investments resulting from changes in the rate of inflation is referred to as price risk.
429
A major advantage in the adoption and use of electronic commerce lies in the replacement of which of the following?
Paper documents
431
Which of the following statements is correct concerning the security of messages in an electronic data interchange (EDI) system?
Encryption performed by a physically secure hardware device is more secure than encryption performed by software.
432
What does integrated planning accomplish?
Participation of stakeholders and affected departments
434
The online data entry control called preformatting is:
the display of a document with blanks for data items to be entered by the terminal operator.
435
An investor uses risk analysis to measure the probability of the variability of future returns from a proposed investment. What is the approach that is based upon utility theory and compels the decision maker to choose at what point he or she is indifferent to the choice between a certain amount of money and the expected value of a risky amount?
Certainty equivalent adjustments
436
Sometimes referred to as the "Tone at the top"
Control Environment
437
Sales Values Not Available at Split Off Must
Incur separable cost to finish
439
Short-term interest rates are:
generally lower than long-term rates.
440
R Beck, Inc., has learned that 4,971 of 310,000 of its commercial DVDs over the past 12 months have arrived to the customer as blank discs with no data contained on them. Which improvement initiative would R Beck most likely adapt to reduce or eliminate the blank discs?
Six Sigma
442
Which of the following forecasting methods relies mostly on judgment?
Delphi
443
The U.S. balance of trade is decreased by:
U.S. imports.
445
A key point in economics is
Opportunity Cost
446
What are the primary factors that shift SRAS:
Changes in input(resources)prices Supply Shocks
447
How many levels of interdependence are included in integrated planning?
Three levels
448
The simple interest method of calculating interest on loans does not consider:
interest on interest.
449
The purpose of regression analysis is
to use an independent variable to predict the value of another variable.It is a mathematical equation used to fit the best line possible to the observed data
450
Costing that can be used for both process or job costing
Activity Based Costing
451
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
452
is necessary to determine an organization's definition of a disaster and evaluate the effect of that disaster
Risk analysis
454
Price level increases are negatively related to the
purchasing power of money.
456
What does business process re-engineering do within an organization?
Analyzes and designs workflows and processes
457
is the level to which work groups are organized
Interdependence
459
The amount of inventory that a company would tend to hold in stock would increase as the:
cost of carrying inventory decreases.
460
The annual rate of interest actually being earned or charged is the definition of the
Effective annual rate (EAR)
462
Which of the following is a tool that is useful in conducting a preliminary analysis of internal controls in an organization or organizational unit?
Flowcharting
463
A project manager's activities include all of the following, except:
establishing policies for IT.
465
When using a flexible budget, a decrease in production levels within a relevant range:
decreases total costs.
466
What is the main difference between on-line transaction processing and on-line analytical processing?
B On-line transaction processing supports day to day processing while on-line analytical processing allows for the day to day data to be analyzed
467
Short-term interest rates are:
generally lower than long-term rates.
468
What does business process re-engineering do within an organization?
Analyzes and designs workflows and processes
469
What does business process re-engineering do within an organization?
Analyzes and designs workflows and processes
471
Interest on debt is
tax deductible by a corporation, while dividends paid are not
472
relational databases
use tables.
473
Flowcharting software could be used to reduce
the cost of preparing and updating flowcharts.
474
A system where several minicomputers are connected for communication and data transmission purposes, but where each computer can also process its own data, is known as a:
distributed data processing network.
475
When the price of product X went up the demand for product Y decreased. In this case, which of the following must be true?
Products X and Y are complements
477
relational databases
use tables.
477
relational databases
use tables.
478
What are the four dates in the dividend payment process
Declaration Date Ex-dividend Date Date of Record Payment Date
479
The federal budget deficit is the:
amount by which the federal government's expenditures exceed its revenues in a given year.
480
The external environment, in a strategic planning context, includes:
limitations, opportunities, and threats coming from competitors, governmental agencies, and other external sources.
481
The technique commonly used to determine zero defects and goal post conformance is called
Control Chart
482
Globalization suggests that firms need to take a serious look at the variety of implications of globalization for business strategies. Among the major factors that need to be considered are:
the need for scenario planning, which causes the firm to look at a number of different future possibilities for the firm under varying conditions of high uncertainty.
483
When real GDP is below the potential level of output:
The economy will typically be experiencing a recession
485
Access time in relation to computer processing is the amount of time it takes to:
retrieve data from memory.
486
Includes the output of foreign-owned factories in the U.S.
GDP
487
Which of the following procedures should be included in the disaster recovery plan for an information technology department?
Identification of critical applications
488
the major advantage of debt financing is
is in lowering taxes. This advantage is greatest in periods of high marginal tax rates and few noninterest tax benefits.
489
The Database Administrator or DBA is responsible
maintaining the database and restricting access to the database to authorized users only.
491
When the price of product Z increases from $10 to $11 the quantity demanded declines from 500 units to 450 units. Which of the following is true?
The demand for product Z has unit price elasticity.
493
The online data entry control called preformatting is:
the display of a document with blanks for data items to be entered by the terminal operator.
495
Companies that adapt JIT purchasing systems often experience
A reduction in the number of suppliers
496
A product whose demand is positively related to income
Normal Good
498
the major advantage of debt financing is
is in lowering taxes. This advantage is greatest in periods of high marginal tax rates and few noninterest tax benefits.
499
how does expanionary monteray policy happens:
when the FED increases the money supply
500
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
502
What are two ways Federal Gov't can control the economy
Changes in Gov't spending Changes in consumer taxes
504
Which of the following describes an off-shore operation?
A U.S. company incorporates in Japan.
505
When the currency of a country appreciates in real terms relative to the currencies of its trading partners?
Its goods will become relatively expensive for foreigners While foreign goods will become relatively cheap for its resident USA
506
The purpose of regression analysis is
to use an independent variable to predict the value of another variable.It is a mathematical equation used to fit the best line possible to the observed data
507
Gram Co. develops computer programs to meet customers' special requirements. How should Gram categorize payments to employees who develop these programs?
By direct costs and value-adding costs
509
An investor uses risk analysis to measure the probability of the variability of future returns from a proposed investment. What is the approach that is based upon utility theory and compels the decision maker to choose at what point he or she is indifferent to the choice between a certain amount of money and the expected value of a risky amount?
Certainty equivalent adjustments
510
Which of the following statements is correct concerning the security of messages in an electronic data interchange (EDI) system?
Encryption performed by a physically secure hardware device is more secure than encryption performed by software.
511
The change control process helps
an organization identify a change, review the effectiveness of the change, approve the change, and implement the change.
513
The Sarbanes-Oxley Act requires that all financial statements include:
all material off-balance-sheet liabilities, obligations, or transactions
514
Access time in relation to computer processing is the amount of time it takes to:
retrieve data from memory.
516
Regression analysis can be used to
develop simple regression equations of the type y = a + b(x), where a represents the constant (i.e., fixed) cost and b represents the variable rate
517
What is the purpose of producting a balanced scorecard for an operation?
It outlines strategries objectives and then shows how the company's success in those objectives will be measured and evaluated
519
Hierarchical databases
use tree structures to organize data
520
Which of the following is the most important budget in the master budget process and required to be prepared first?
SALES BUDGET
520
The risk management process involves which of the following steps related to both internal and external controls?
Identifying and prioritizing risks and understanding their relevance; understanding the stakeholders' objectives and their tolerance for risk; and developing and implementing appropriate strategies in the context of a risk management policy
521
Flowcharting software could be used to reduce
the cost of preparing and updating flowcharts.
523
When using a flexible budget, a decrease in production levels within a relevant range:
decreases total costs.
524
The learning and growth perspective concerns the company’s
ability to maximize employee loyalty and improve the company by good utilization of those employees
525
Diffusion involves
setting aside the conflict situation and concentrating on less controversial issues.
527
A fund where investors buy shares from and sell shares to the fund at the fund's net asset value(NAV) is known as :
Open-End Fund
528
Controlling computer operations can be accomplished by:
Segregation controls, backup and recovery, contingency processing, file protection rings and internal and external labels
529
Which of the following is not a part of the change control process?
Controlling a control
530
The online data entry control called preformatting is:
the display of a document with blanks for data items to be entered by the terminal operator.
531
Which of the following statements regarding systems flowcharts is true? -
They illustrate informational processes (such as logic flows, inputs, outputs, data storage) and operational processes (such as physical flows
532
Price Elasticity will have
an absolute price elasticity of demand \> 1.0
533
Represents the value of the next best alternative foregone( or not chosen)
Opportunity
534
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Before the initiative begins our answer was incorrect After completion of the initiative During the initiative
535
Performance measures should assess how well subunits and managers are meeting:
goals of the organization.
536
Off-shore operations” describes an organization
incorporating outside of the original jurisdiction of the primary operations.
536
Which of the following is a tool that is useful in conducting a preliminary analysis of internal controls in an organization or organizational unit?
Flowcharting
538
When using a flexible budget, a decrease in production levels within a relevant range:
decreases total costs.
539
Passwords are often components of control systems over EDP facilities. A password is an example of:
access control.
541
In order to comply with a director's duty of loyalty to a corporation, what action(s) should a director take when presented personally with a new business opportunity?
Offer the opportunity to the corporation and accept it only if the corporation rejects it
542
A major advantage in the adoption and use of electronic commerce lies in the replacement of which of the following?
Paper documents
544
Which of the following procedures should be included in the disaster recovery plan for an information technology department?
Identification of critical applications
545
Tale Company has two competitors in one of its major product segments. Recently one of those firms had its major product in that segment subjected to severe restrictions by a governmental regulatory body. These restrictions are likely to continue indefinitely. This action and its effect on Tale is an example of:
external environment.
546
Which of the following procedures should be included in the disaster recovery plan for an information technology department?
Identification of critical applications
547
Emphasize reliable financial reporting
Mgmt Philosopy & Operating Style
548
The Sarbanes-Oxley Act requires that all financial statements include:
all material off-balance-sheet liabilities, obligations, or transactions
549
The change control process helps
an organization identify a change, review the effectiveness of the change, approve the change, and implement the change.
550
Which of the following describes an off-shore operation?
A U.S. company incorporates in Japan.
551
The simple interest method of calculating interest on loans does not consider:
interest on interest.
552
A disadvantage of the net present value method of capital expenditure evaluation is that it:
does not provide the true rate of return on investment.
553
The change control process helps
an organization identify a change, review the effectiveness of the change, approve the change, and implement the change.
554
An investor uses risk analysis to measure the probability of the variability of future returns from a proposed investment. What is the approach that is based upon utility theory and compels the decision maker to choose at what point he or she is indifferent to the choice between a certain amount of money and the expected value of a risky amount?
Certainty equivalent adjustments
555
What does integrated planning accomplish?
Participation of stakeholders and affected departments
557
A project manager's activities include all of the following, except:
establishing policies for IT.
558
Business process re-engineering (BPR) identifies
identifies processes and workflows, analyzes processes and workflows, and designs processes and workflows
560
Performance measures should assess how well subunits and managers are meeting:
goals of the organization.
562
A system where several minicomputers are connected for communication and data transmission purposes, but where each computer can also process its own data, is known as a:
distributed data processing network.
563
Diffusion involves
setting aside the conflict situation and concentrating on less controversial issues.
564
The benefits of debt financing over equity financing are likely to be highest in which of the following situations?
High marginal tax rates and few noninterest tax benefits
565
Which of the following statements is correct concerning the security of messages in an electronic data interchange (EDI) system?
Encryption performed by a physically secure hardware device is more secure than encryption performed by software.
566
Flowcharting software could be used to reduce
the cost of preparing and updating flowcharts.
567
Monopolistic competition is characterized by
Large group of sellers who produce differential products
568
Which of the following forecasting methods relies mostly on judgment?
Delphi
569
the major advantage of debt financing is
is in lowering taxes. This advantage is greatest in periods of high marginal tax rates and few noninterest tax benefits.
570
How many levels of interdependence are included in integrated planning?
Three levels
571
Business process re-engineering (BPR) identifies
identifies processes and workflows, analyzes processes and workflows, and designs processes and workflows
572
Describe the product or servicesthe project must deliver at completion
Statement of Work(Scope of the project)
573
A manufacturer is considering using barcode identification for recording information on parts used by the manufacturer. A reason to use barcodes, rather than other means of identification, is to ensure that:
the movement of parts is easily and quickly recorded.
574
In order to compute equivalent units of production, what must be reasonbly estimated?
Percentage of Completion
575
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Organizations must collect data before, during, and after the implementation to reach a desired target
576
Value chain analysis is concerned with:
Additional value a product gains by passing through all the activities of the production chain
577
is necessary to determine an organization's definition of a disaster and evaluate the effect of that disaster
Risk analysis
578
The use of an accelerated method instead of the straight-line method of depreciation in computing the net present value of a project has the effect of:
increasing the present value of the depreciation tax shield.
580
The most common measure of the economic activity or output of an economy is
Gross Domestic Product(GDP)
581
Characterized by falling economic activity and growth and follows a peak
Contractionary Phase
583
What characteristic of effective performance measures does the ROI lacks:
ROI does not balance long and short term issues
584
Which of the following procedures should be included in the disaster recovery plan for an information technology department?
Identification of critical applications
585
Hierarchical databases
use tree structures to organize data
586
is the level to which work groups are organized
Interdependence
587
You see a simultaneous decrease in supply and demand for tobacco products. Which of the following represents the effect of these shifts on output quantity and market price?
Output quantity decreases and output price is indeterminate
589
Project authorization requires the creation of a:
Project Charter
590
The online data entry control called preformatting is:
the display of a document with blanks for data items to be entered by the terminal operator.
591
Net operating profit after taxes (NOPAT or NOPLAT) minus the firm's cost of capital in dollar terms (capital investment x weighted average cost of capital) is the definition of
Economic valued added (EVA)
593
Costs do not change during the production
Fixed
594
The risk management process involves which of the following steps related to both internal and external controls?
Identifying and prioritizing risks and understanding their relevance; understanding the stakeholders' objectives and their tolerance for risk; and developing and implementing appropriate strategies in the context of a risk management policy
595
Millicent Monroe has been tasked with drafting the master budget for her small manufacturing firm. Which of the following presents the proper in order in which Millicent must prepare these budgets?
1.Sales budget 2.production budget 3.budgeted income statement 4. budgeted balance sheet
597
Use case diagrams, activity diagrams, business process modeling notation, extended business modeling language, and unified modeling language are all
business model processing
598
Which price index is based on a comparison of the prices of items in a "typical" shopping cart to a base value?
The Consumer Price Index
599
Globalization suggests that firms need to take a serious look at the variety of implications of globalization for business strategies. Among the major factors that need to be considered are:
the need for scenario planning, which causes the firm to look at a number of different future possibilities for the firm under varying conditions of high uncertainty.
601
Interest on debt is
tax deductible by a corporation, while dividends paid are not
602
Quality programs that demand compliance with the most rigorous standards apply the concept of :
Absolute Conformance
604
A project manager's activities include all of the following, except:
establishing policies for IT.
605
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Organizations must collect data before, during, and after the implementation to reach a desired target
606
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Before the initiative begins our answer was incorrect After completion of the initiative During the initiative
607
A manufacturer is considering using barcode identification for recording information on parts used by the manufacturer. A reason to use barcodes, rather than other means of identification, is to ensure that:
the movement of parts is easily and quickly recorded.
608
An investor uses risk analysis to measure the probability of the variability of future returns from a proposed investment. What is the approach that is based upon utility theory and compels the decision maker to choose at what point he or she is indifferent to the choice between a certain amount of money and the expected value of a risky amount?
Certainty equivalent adjustments
609
Total fixed cost along the relevant range will:
Stays the same as volume increases
610
A process that never stops throughout the life of the project
Planning
611
Excludes the output of U.S\> owned factories operating abroad
GDP
612
What is the effect on prices of U.S. imports and exports when the dollar depreciates?
Import prices will increase and export prices will decrease.
613
Used to analyze the source of potential problems and their locations within a process is called
Fish Bone Diagram
614
R Beck, Inc., has learned that 4,971 of 310,000 of its commercial DVDs over the past 12 months have arrived to the customer as blank discs with no data contained on them. Which improvement initiative would R Beck most likely adapt to reduce or eliminate the blank discs?
Six Sigma
616
Price set ABOVE the equilibrium price means:
Quantity demanded will be less than Quantity supplied, a surplus will result
617
A major advantage in the adoption and use of electronic commerce lies in the replacement of which of the following?
Paper documents
618
The external environment, in a strategic planning context, includes:
limitations, opportunities, and threats coming from competitors, governmental agencies, and other external sources.
618
Which of the following describes an off-shore operation?
A U.S. company incorporates in Japan.
620
The Sarbanes-Oxley Act requires that all financial statements include:
all material off-balance-sheet liabilities, obligations, or transactions
621
Refers to an unsecured bond
Debenture
623
The benefits of debt financing over equity financing are likely to be highest in which of the following situations?
High marginal tax rates and few noninterest tax benefits
624
The federal budget deficit is the:
amount by which the federal government's expenditures exceed its revenues in a given year.
625
Shady Lane Corporation is determining its path forward for budgeting for the coming year. Although the company has always utilized a top-down approach to budgeting, management is considering incorporating a participative approach to budgeting. Which of the following statements is true?
A participative budgeting process has the advantages of improved morale and wider acceptance of the budget, but has the disadvantage of possible budget slack being built in by area managers.
627
When using a flexible budget, a decrease in production levels within a relevant range:
decreases total costs.
628
Which of the following security controls might prevent unauthorized access to sensitive data via an unattended data terminal directly connected to a mainframe?
Automatic log-off of inactive users
628
A city ordinance that freezes rent prices may cause:
demand for rental space to exceed supply.
629
The same as a process costing system EXCEPT that materials are allocated on the basis of batches of production
Operating Costing Systems
630
The purpose of regression analysis is
to use an independent variable to predict the value of another variable.It is a mathematical equation used to fit the best line possible to the observed data
631
Off-shore operations” describes an organization
incorporating outside of the original jurisdiction of the primary operations.
632
An investor uses risk analysis to measure the probability of the variability of future returns from a proposed investment. What is the approach that is based upon utility theory and compels the decision maker to choose at what point he or she is indifferent to the choice between a certain amount of money and the expected value of a risky amount?
Certainty equivalent adjustments
633
Which of the following is capable of explaining a lower market equilibrium price for cell phones?
An improved technology that makes it cheaper to produce cell phones.
635
How many levels of interdependence are included in integrated planning?
Three levels
636
The Thornston Company is preparing a balanced scorecard and is currently looking at this process from the perspective of the company’s customers. A strategic objective has been established that is critical to the company’s success. A performance measure (such as the customer retention rate) has also been selected. What component of a balanced scorecard is most likely to come next?
Baseline performance is to be determined.
637
Regression analysis can be used to
develop simple regression equations of the type y = a + b(x), where a represents the constant (i.e., fixed) cost and b represents the variable rate
638
Business process re-engineering (BPR) identifies
identifies processes and workflows, analyzes processes and workflows, and designs processes and workflows
639
Information systems process data and transactions within a business organization. These actions include all but which of the following?
Validation and comparison of system generated reports to input data
641
Which of the following procedures should be included in the disaster recovery plan for an information technology department?
Identification of critical applications
642
Regression analysis can be used to
develop simple regression equations of the type y = a + b(x), where a represents the constant (i.e., fixed) cost and b represents the variable rate
643
A major advantage in the adoption and use of electronic commerce lies in the replacement of which of the following?
Paper documents
644
Currently, the U.S. tax code requires that transfer prices for multinational corporations are “arms length transactions.” Methods that are prescribed by the IRS for setting arm's length prices for tangible goods include all of the following except:
the target revenue approach. This method starts at a target selling price for the distribution affiliate that allows for a reasonable profit less the transfer price and any additional costs to cover overhead costs.
645
What is the main advantage to programmers utilizing a fourth generation language (4GL)?
B 4GLs are relatively easy for programmers to use
647
The federal budget deficit is the:
amount by which the federal government's expenditures exceed its revenues in a given year.
649
A project manager's activities include all of the following, except:
establishing policies for IT.
650
Used to stablize the economy with the use of the money suppl
Monetary Policy
651
Which of the following security controls might prevent unauthorized access to sensitive data via an unattended data terminal directly connected to a mainframe?
Automatic log-off of inactive users
652
It is NOT considered an advantage of the corporate form of business organization?
Taxation
653
Which function is generally responsible for preparing data to be entered into the system?
End-users
654
Which of the following is not a part of the change control process?
Controlling a control
655
The NPV needs to be positive(above zero) for an:
Investment to be recommended
656
A computer system that converts the inputs into data that allows management to make unstructured decisions concerning the company's future is:
a strategic information system.
657
Gram Co. develops computer programs to meet customers' special requirements. How should Gram categorize payments to employees who develop these programs?
By direct costs and value-adding costs
659
Activities that are associated with completing the work that has been specified
Implementation
660
Change management control policies should contain which of the following elements?
1.Assess what impact each change will have on system availability, security, maintainability, and integrity 2. Require IT management to review, monitor, and approve all change requests 3. Ensure proper testing of changes before the changes are implemented in a production environment
661
A project manager's activities include all of the following, except:
establishing policies for IT.
663
A system where several minicomputers are connected for communication and data transmission purposes, but where each computer can also process its own data, is known as a:
distributed data processing network.
664
the major advantage of debt financing is
is in lowering taxes. This advantage is greatest in periods of high marginal tax rates and few noninterest tax benefits.
665
A city ordinance that freezes rent prices may cause:
demand for rental space to exceed supply.
666
A computer system that converts the inputs into data that allows management to make unstructured decisions concerning the company's future is:
a strategic information system.
667
What does business process re-engineering do within an organization?
Analyzes and designs workflows and processes
669
The purpose of the TDRA (top-down risk assessment) is for the company to analyze the internal controls currently in place and to assess the effectiveness of those controls so as to avoid material misstatement in the company's financial reporting. As part of that assessment process, which of the following items would be done?
As part of the TDRA, management will develop a list related to a particular account that would have a reasonable likelihood of material misstatement, focusing on problems that have been encountered in the past and the solutions that were developed to avoid such errors in the future.
670
If demand is price inelastic:
Price will increase Total Revenue will increase Quantity Demanded will decrease
671
Perform the project tasks by carrying out the work and producing the deliverables
Project Members
672
A period of time in which some of the inputs used for production are fixed
Short -Run
673
CONSIDERED THE MOST IMPORTANT BUDGET
SALES BUDGET
674
The Sarbanes-Oxley Act changed the way financial reports are treated. What section of the act requires the CEO to review the financial statements?
Section 302
676
Short-term interest rates are:
generally lower than long-term rates.
677
Flowcharting software could be used to reduce
the cost of preparing and updating flowcharts.
678
Fixed interest rate loans lock in a particular interest rate over the duration of a loan. If price levels and interest rates rise during this period:
borrowers benefit.
679
The maximum quantity of ALL goods & services that household,firms, & the gov't are willing and able to purchase at any given price level
AD curve
680
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
681
Gram Co. develops computer programs to meet customers' special requirements. How should Gram categorize payments to employees who develop these programs?
By direct costs and value-adding costs
682
A manufacturer is considering using barcode identification for recording information on parts used by the manufacturer. A reason to use barcodes, rather than other means of identification, is to ensure that:
the movement of parts is easily and quickly recorded.
684
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Organizations must collect data before, during, and after the implementation to reach a desired target
686
An individual at the executive level of mgmt who is responsible for allocating funding and resources to the project
Project Sponsor
687
A needs assessment involves assessing
data capture, processes, information, and reporting needs.
688
R Beck, Inc., has learned that 4,971 of 310,000 of its commercial DVDs over the past 12 months have arrived to the customer as blank discs with no data contained on them. Which improvement initiative would R Beck most likely adapt to reduce or eliminate the blank discs?
Six Sigma
689
Short-term interest rates are:
generally lower than long-term rates.
691
A computer system that converts the inputs into data that allows management to make unstructured decisions concerning the company's future is:
a strategic information system.
692
The forecasting technique most relevant for analyzing data prior to creation of a flexible budget is:
regression analysis.
693
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
694
In the short run cost structure of a firm as the quantity produced increases:
Average total costs reach a minimum when average total cost equals marginal cost
695
Is a low point of economic activity. Unused productive capacity and an unwilligness to risk new investment
Trough
696
The amount of inventory that a company would tend to hold in stock would increase as the:
cost of carrying inventory decreases.
698
relational databases
use tables.
699
benefits of business process improvements.
greater efficiency, higher product quality, and alignment of processes with customer needs.
700
The simple interest method of calculating interest on loans does not consider:
interest on interest.
701
is the level to which work groups are organized
Interdependence
702
Typcially used to compare standards of living across countries or across time
Real GDP per Capita
702
Which of the following would not be appropriate to consider in the physical design of a data center?
Design of authorization tables for operating system access
703
A natural monopoly exists because:
Economic and technical conditions permit only one efficient supplier
704
The project has a negative NPV. Therefore, it is not generating cash flows that amount to 9 percent per year or more. The project's IRR is less than the firm's cost of capital (9%). Because the rate of return is less than the desired rate,
the investment should be rejected.
705
Which of the following would not be appropriate to consider in the physical design of a data center?
Design of authorization tables for operating system access
706
Which of the following is not a part of the change control process?
Controlling a control
707
Short-term interest rates are:
generally lower than long-term rates.
708
Diffusion involves
setting aside the conflict situation and concentrating on less controversial issues.
710
Regression analysis can be used to
develop simple regression equations of the type y = a + b(x), where a represents the constant (i.e., fixed) cost and b represents the variable rate
711
Computer program libraries can best be kept secure by:
restricting physical and logical access.
712
What are some of the most cited economic measures:
Real GDP Unemployment Inflation rate Interest rate
713
What is the order of the business cycles
Expansionary Phase Peak Contractionary Phase Trough Recovery Phase
715
Responsible for project administration on a day today basis
Project Manager
716
Measured as the percentage change in the consumer price index(CPI) from one period to the next
Inflation or Deflation
717
The forecasting technique most relevant for analyzing data prior to creation of a flexible budget is:
regression analysis.
718
Which of the following describes an off-shore operation?
A U.S. company incorporates in Japan.
719
Based on how well the company manages to do a particular process
Internal Business Processes is measured
720
A city ordinance that freezes rent prices may cause:
demand for rental space to exceed supply.
721
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Before the initiative begins our answer was incorrect After completion of the initiative During the initiative
722
The U.S. balance of trade is decreased by:
U.S. imports.
723
Beta coefficient measures:
Systematic Risk
724
Currently, the U.S. tax code requires that transfer prices for multinational corporations are “arms length transactions.” Methods that are prescribed by the IRS for setting arm's length prices for tangible goods include all of the following except:
the target revenue approach. This method starts at a target selling price for the distribution affiliate that allows for a reasonable profit less the transfer price and any additional costs to cover overhead costs.
725
The control environment consists of
the actions, policies and procedures that reflect management's overall attitudes about internal control
727
The original maturity of a Treasury Bill is
One year or Less
728
The purpose of the TDRA (top-down risk assessment) is for the company to analyze the internal controls currently in place and to assess the effectiveness of those controls so as to avoid material misstatement in the company's financial reporting. As part of that assessment process, which of the following items would be done?
As part of the TDRA, management will develop a list related to a particular account that would have a reasonable likelihood of material misstatement, focusing on problems that have been encountered in the past and the solutions that were developed to avoid such errors in the future.
729
Access time in relation to computer processing is the amount of time it takes to:
retrieve data from memory.
730
Which of the following statements relating to decentralized processing is not true?
Decentralized processing has been replaced with more efficient forms of processing.
731
is necessary to determine an organization's definition of a disaster and evaluate the effect of that disaster
Risk analysis
732
Tale Company has two competitors in one of its major product segments. Recently one of those firms had its major product in that segment subjected to severe restrictions by a governmental regulatory body. These restrictions are likely to continue indefinitely. This action and its effect on Tale is an example of:
external environment.
733
The external environment, in a strategic planning context, includes:
limitations, opportunities, and threats coming from competitors, governmental agencies, and other external sources.
734
Potential output(real GDP) will exceed actual output(real GDP)
Recession
736
The change control process helps
an organization identify a change, review the effectiveness of the change, approve the change, and implement the change.
737
The federal budget deficit is the:
amount by which the federal government's expenditures exceed its revenues in a given year.
738
Diffusion involves
setting aside the conflict situation and concentrating on less controversial issues.
739
Tale Company has two competitors in one of its major product segments. Recently one of those firms had its major product in that segment subjected to severe restrictions by a governmental regulatory body. These restrictions are likely to continue indefinitely. This action and its effect on Tale is an example of:
external environment.
740
Business process re-engineering (BPR) identifies
identifies processes and workflows, analyzes processes and workflows, and designs processes and workflows
741
The purchase and sale of commodities for current delivery is known as which market?
Spot Market
742
The change control process helps
an organization identify a change, review the effectiveness of the change, approve the change, and implement the change.
743
An investor uses risk analysis to measure the probability of the variability of future returns from a proposed investment. What is the approach that is based upon utility theory and compels the decision maker to choose at what point he or she is indifferent to the choice between a certain amount of money and the expected value of a risky amount?
Certainty equivalent adjustments
744
Short-term interest rates are:
generally lower than long-term rates.
745
Expenditure Approach is the sum what four components
G-overnment Purchases of good & services I-Gross Private Domestic Investment C-Personal Consumption Expenditures E-Net Exports(export- imports)
746
The equation for the SML is the :
Capital Asset Pricing Model(CAPM)
747
A system where several minicomputers are connected for communication and data transmission purposes, but where each computer can also process its own data, is known as a:
distributed data processing network.
748
Business process re-engineering (BPR) identifies
identifies processes and workflows, analyzes processes and workflows, and designs processes and workflows
749
Gram Co. develops computer programs to meet customers' special requirements. How should Gram categorize payments to employees who develop these programs?
By direct costs and value-adding costs
751
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
752
Currently, the U.S. tax code requires that transfer prices for multinational corporations are “arms length transactions.” Methods that are prescribed by the IRS for setting arm's length prices for tangible goods include all of the following except:
the target revenue approach. This method starts at a target selling price for the distribution affiliate that allows for a reasonable profit less the transfer price and any additional costs to cover overhead costs.
753
data capture, processes, information, and reporting needs.
NORMAL GOOD
754
Which of the following security controls might prevent unauthorized access to sensitive data via an unattended data terminal directly connected to a mainframe?
Automatic log-off of inactive users
755
The online data entry control called preformatting is:
the display of a document with blanks for data items to be entered by the terminal operator.
756
The change control process helps
an organization identify a change, review the effectiveness of the change, approve the change, and implement the change.
757
A disadvantage of the net present value method of capital expenditure evaluation is that it:
does not provide the true rate of return on investment.
758
Raj Patel is considering his financial position in a period of rising prices. Unfortunately, only one of his conclusions below is correct. Which of the following is the correct conclusion during a period of inflation
During this period of rising prices, the purchasing power of Patel 's money has decreased.
759
760
761
