Question 1

To achieve the objectives of sections 302 and 404 of the Sarbanes-Oxley Act, management and independent auditors should:

Accepted Answer

A) disclose the minutia of the internal control structure. 
B) conduct a cost-beneﬁt analysis prior to deciding whether or not to adopt these sections. 
C) emphasize those areas where the greatest risk of fraud or material misstatement is likely to 
D) analyze all ﬁnancial transactions that are included in the reported ﬁnancial statements. 
E) work together to design the most effective internal control system. 
A) disclose the minutia of the internal control structure. 
B) conduct a cost-beneﬁt analysis prior to deciding whether or not to adopt these sections. 
C) emphasize those areas where the greatest risk of fraud or material misstatement is likely to 
D) analyze all ﬁnancial transactions that are included in the reported ﬁnancial statements. 
E) work together to design the most effective internal control system.

Question 2

At the economic order quantity:

Accepted Answer

A) total annual inventory costs, holding costs, and ordering costs are all minimized. 
B) total annual inventory costs and holding costs are minimized. 
C) total annual inventory costs are minimized, and holding costs equal ordering costs. 
D) total annual inventory costs are minimized, and holding costs exceed ordering costs. 
E) total annual inventory costs are minimized, and ordering costs exceed holding costs. 
A) total annual inventory costs, holding costs, and ordering costs are all minimized. 
B) total annual inventory costs and holding costs are minimized. 
C) total annual inventory costs are minimized, and holding costs equal ordering costs. 
D) total annual inventory costs are minimized, and holding costs exceed ordering costs. 
E) total annual inventory costs are minimized, and ordering costs exceed holding costs.

Question 3

Olive Loom wants to accumulate $3,880 for a down payment toward the purchase of a car.Olive plans to make this purchase 3 years from today.If Olive can earn 8%, approximately how much does she need to deposit into the fund today in order to accumulate the desired down payment? Use appendix Table 1, Table 2, Table 3 and Table 4.

Accepted Answer

A) $3,080. 
B) $4,890. 
C) $925. 
D) $3,258. 
E) $2,915. 
A) $3,080. 
B) $4,890. 
C) $925. 
D) $3,258. 
E) $2,915.

Question 4

A series of equal cash ﬂows is called a (n):

Accepted Answer

A) ongoing cash ﬂow. 
B) payback. 
C) accrual. 
D) cash accumulation. 
E) annuity. 
A) ongoing cash ﬂow. 
B) payback. 
C) accrual. 
D) cash accumulation. 
E) annuity.

Question 5

Larch West invested $71,030 in exchange for a series of $10,000 annual payments beginning one year from today.If the investment pays 10% interest, how many payments will Larch receive? Use appendix Table 1, Table 2, Table 3 and Table 4.

Accepted Answer

A) 7. 
B) 13. 
C) 10. 
D) 12. 
E) None of the answers is correct. 
A) 7. 
B) 13. 
C) 10. 
D) 12. 
E) None of the answers is correct.

Question 6

Elk Creek Industries (ECI) purchased equipment to expand its production facilities.The purchase agreement calls for annual payments of $60,000 at the end of each year for the next 6 years.If ECI's discount rate is 12%, at what amount should ECI record the equipment? Use appendix Table 1, Table 2, Table 3 and Table 4.

Accepted Answer

A) $360,000. 
B) $231,300. 
C) $331,540. 
D) $246,660. 
E) None of the answers is correct. 
A) $360,000. 
B) $231,300. 
C) $331,540. 
D) $246,660. 
E) None of the answers is correct.

Question 7

Which of the following is classiﬁed as an inventory shortage cost?

Accepted Answer

A) Purchase order preparation. 
B) Production disruption. 
C) Lost sales and lost customers. 
D) Spoilage. 
E) Both production disruption and lost sales and lost customers. 
A) Purchase order preparation. 
B) Production disruption. 
C) Lost sales and lost customers. 
D) Spoilage. 
E) Both production disruption and lost sales and lost customers.

Question 8

Which of the following bodies oversees audits and auditors, and sanctions ﬁrms and individuals for violations of laws and regulations?

Accepted Answer

A) American Institute of Certiﬁed Public Accountants (AICP
A) . 
B) American Accounting Association (AA
A) . 
C) Public Company Accounting Oversight Board (PCAO
B) . 
D) Financial Accounting Standards Board (FAS
B) . 
E) Accounting Principles Board (AP
B) . 
A) American Institute of Certiﬁed Public Accountants (AICP
A) . 
B) American Accounting Association (AA
A) . 
C) Public Company Accounting Oversight Board (PCAO
B) . 
D) Financial Accounting Standards Board (FAS
B) . 
E) Accounting Principles Board (AP
B) .

Question 9

Internal controls focus on all of the following except:

Accepted Answer

A) effectiveness of operations. 
B) reliability of ﬁnancial reporting. 
C) compliance with applicable laws and regulations. 
D) maximization of proﬁt and cash ﬂows. 
E) eﬃciency of operations. 
A) effectiveness of operations. 
B) reliability of ﬁnancial reporting. 
C) compliance with applicable laws and regulations. 
D) maximization of proﬁt and cash ﬂows. 
E) eﬃciency of operations.

Question 10

Pika Pumps uses a special component in manufacturing its pool pumps.Pika produces 26,000 pool pumps per year, each of which requires one of these special components.The annual cost of holding one component is $4 and Pika's management estimates that the cost of placing and receiving a typical order is $125.Production is constant, and the lead time to receive an order is one week.Assume 52 weeks in a year. Pika's economic order quantity is approximately:

Accepted Answer

A) 456. 
B) 41. 
C) 1,275. 
D) 901. 
E) 1,803. 
A) 456. 
B) 41. 
C) 1,275. 
D) 901. 
E) 1,803.

Question 11

What does it mean to say that the concept of risk exposure may be the key to making SOX sections 302 and 404 more effective?

Accepted Answer

As some critics of SOX have suggested, i

To achieve the objectives of sections 302 and 404 of the Sarbanes-Oxley Act, management and independent auditors should:

At the economic order quantity:

A series of equal cash ﬂows is called a (n):

Larch West invested $71,030 in exchange for a series of $10,000 annual payments beginning one year from today.If the investment pays 10% interest, how many payments will Larch receive? Use appendix Table 1, Table 2, Table 3 and Table 4.

Which of the following is classiﬁed as an inventory shortage cost?

Which of the following bodies oversees audits and auditors, and sanctions ﬁrms and individuals for violations of laws and regulations?

Internal controls focus on all of the following except:

What does it mean to say that the concept of risk exposure may be the key to making SOX sections 302 and 404 more effective?

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Basic Cost Management Concepts

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis, Cost Behavior, and Cost Estimation

Cost-Volume-Profit Analysis

Variable Costing and the Costs of Quality and Sustainability

Financial Planning and Analysis: the Master Budget

Standard Costing and Analysis of Direct Costs

Flexible Budgeting and Analysis of Overhead Costs

Responsibility Accounting, Operational Performance Measures, and the Balanced Scorecard

Filters

Exam 13: Inventory Management and Economic Order Quantity (EOQ) Analysis

To achieve the objectives of sections 302 and 404 of the Sarbanes-Oxley Act, management and independent auditors should:

At the economic order quantity:

A series of equal cash ﬂows is called a (n):

Larch West invested $71,030 in exchange for a series of $10,000 annual payments beginning one year from today.If the investment pays 10% interest, how many payments will Larch receive? Use appendix Table 1, Table 2, Table 3 and Table 4.

Which of the following is classiﬁed as an inventory shortage cost?

Which of the following bodies oversees audits and auditors, and sanctions ﬁrms and individuals for violations of laws and regulations?

Internal controls focus on all of the following except:

What does it mean to say that the concept of risk exposure may be the key to making SOX sections 302 and 404 more effective?

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Basic Cost Management Concepts

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis, Cost Behavior, and Cost Estimation

Cost-Volume-Profit Analysis

Variable Costing and the Costs of Quality and Sustainability

Financial Planning and Analysis: the Master Budget

Standard Costing and Analysis of Direct Costs

Flexible Budgeting and Analysis of Overhead Costs

Responsibility Accounting, Operational Performance Measures, and the Balanced Scorecard

Filters