Deck 17 Flashcards Preview

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Flashcards in Deck 17 Deck (28):
1

What variance measures the departure from the denominator level of activity that was used to set the fixed OH rate?

Production volume variance

2

Translation exposure

Gain or loss generated from the conversion of financial statements from one currency to another based on different exchange rates

3

The value of the euro will fall in relation to the US Dollar; what kind of risk exposure is this?

Transaction exposure

4

The imputed interest rate used in the residual income approach is

Target return on investment set aside by management

5

Strategic Risk

The risk of choosing inappropriate technology

6

What working capital financing policy subjects the firm to the greatest risk?

Financing permanent current assets with short-term debt

7

When managing cash and short term investments, a corporate treasurer is primarily concerned with:

Liquidity and safety (board of directors and mgmt would be interested in maximizing rate of return)

8

An example of a risk that can be reduced by diversification?

Labor strikes (anything specific to a firm)

9

In microeconomic analysis, in the long run all supply side inputs are

Variable

10

How would change the aggregate demand and supply to decrease inflation?

Decrease AD and increase AS

11

Which component of ERM addresses an entity's process of distinguishing between different risks and opportunities?

Event identification

12

Risk assessment

Process for establishing the likelihood and impact of events

13

Which component of ERM addresses an entity's financial reporting objectives?

Risk assessment (control environment is used for financial reporting competencies)

14

Definition of application input control

Validates data before the data is successfully input

15

Run control total

Output control that is used to compare manual and computer generated batch totals

16

Repatriation restrictions exist when:

A company invests money in a foreign company but is restricted from bringing that money back to its home country

17

Full employment occurs when

There is no cyclical unemployment

18

examples of cost objectives

Efficiency measurement, determination of net income, and valuation of unexpired costs

19

How selling costs treated under the by-product method vs. joint product method?

By-product: including in gross margin; Joint product: not included in gross margin; Net income is the same under both methods

20

Acquire and implement vs. delivery and support (COBIT model)

AI: deliver the solution; DS: deliver the service

21

Strategic business units are established in what kind of environment?

Decentralized, not centralized

22

Opportunity cost:

lost contribution from not taking the job

23

Cost allocation is essential for?

Measuring income and assets for external reporting

24

Average gross receivables =

average daily sales x average collection period

25

are joint costs relevant costs?

NO

26

The steering committee provides....while the project manger provides...?

advise to the sponsor; manages the project

27

Which of the following requires a preexisting relationship before doing business? (BSB, B2C, EDI)

EDI only

28

which components of COSO ERM address risk appetite?

Internal environment and objective setting