Question 1

Estimating the appropriate cost driver as part of activity-based costing is an example of which type of predictive analytics?

Accepted Answer

A)  classification 
B)  regression 
C)  time series 
D)  variance analysis 
A)  classification 
B)  regression 
C)  time series 
D)  variance analysis B

Question 2

Forecasting earnings is an example of which type of predictive analytics?

Accepted Answer

A)  classification 
B)  regression 
C)  time series 
D)  variance analysis 
A)  classification 
B)  regression 
C)  time series 
D)  variance analysis C

Question 3

Which predictive analytics technique would be used to predict whether a firm is likely to have a material misstatement in the coming year?

Accepted Answer

A)  Regression 
B)  Classification 
C)  Benford's law 
D)  Monetary unit sampling 
A)  Regression 
B)  Classification 
C)  Benford's law 
D)  Monetary unit sampling B

Question 4

According to Beneish, which of the following factors are predictive of financial statement fraud?

Accepted Answer

A)  Sales/Total assets. 
B)  Decrease in sales growth in the current period. 
C)  Increase in selling, general and administrative expenses. 
D)  Decline in gross margin as a percent of sales. 
A)  Sales/Total assets. 
B)  Decrease in sales growth in the current period. 
C)  Increase in selling, general and administrative expenses. 
D)  Decline in gross margin as a percent of sales.

Question 5

Which type of analysis would predictive analytics not be useful?

Accepted Answer

A)  Classification 
B)  Finding anomalies and outliers 
C)  Regression 
D)  Time series analysis 
A)  Classification 
B)  Finding anomalies and outliers 
C)  Regression 
D)  Time series analysis

Question 6

According to Altman, while those firms in the __________ zone are at risk of bankruptcy, they are not at significant risk of bankruptcy.

Accepted Answer

A)  distress 
B)  gray 
C)  safe 
D)  green 
A)  distress 
B)  gray 
C)  safe 
D)  green

Question 7

Forecasting sales for budget purposes is an example of which type of predictive analytics?

Accepted Answer

A)  Time series 
B)  Regression 
C)  Classification 
D)  Fuzzy Matching 
A)  Time series 
B)  Regression 
C)  Classification 
D)  Fuzzy Matching

Question 8

According to the text, Apple Computer was in the __________ zone in 1997, or at risk of bankruptcy.

Accepted Answer

A)  distress 
B)  gray 
C)  safe 
D)  green 
A)  distress 
B)  gray 
C)  safe 
D)  green

Question 9

What would be a possible independent variable in a regression determining "How do lenders set interest rates paid by borrowers?" at a lender?

Accepted Answer

A)  Interest rate charged/paid to borrower 
B)  Borrower credit history 
C)  Borrower salary 
D)  Borrower debt 
A)  Interest rate charged/paid to borrower 
B)  Borrower credit history 
C)  Borrower salary 
D)  Borrower debt

Question 10

The balance in the cash account is deterministic as compared to being probabilistic.

Accepted Answer

A) True 
 B)False

Question 11

We would expect a positive (+) relationship between loan acceptance and employment length.

Accepted Answer

A) True 
 B)False

Question 12

The ability of a computer to automatically learn without being explicitly programmed to do so is called __________.

Accepted Answer

A)  machine learning 
B)  automated task repetition 
C)  robotic process automation 
D)  predictive automation 
A)  machine learning 
B)  automated task repetition 
C)  robotic process automation 
D)  predictive automation

Question 13

The higher the expected risk, the lower the expected return.

Accepted Answer

A) True 
 B)False

Question 14

If a company has an Altman Z-score of 3.1, the company would be classified in the __________.

Accepted Answer

A)  distress zone, or at significant risk of bankruptcy 
B)  gray zone, or at risk of bankruptcy 
C)  safe zone, not currently at risk of bankruptcy 
D)  green zone, no risk of bankruptcy 
A)  distress zone, or at significant risk of bankruptcy 
B)  gray zone, or at risk of bankruptcy 
C)  safe zone, not currently at risk of bankruptcy 
D)  green zone, no risk of bankruptcy

Question 15

Predictive analytics is useful for which type of analysis?

Accepted Answer

A)  Summarizing data 
B)  Finding anomalies and outliers 
C)  Uncovering patterns 
D)  Regression analysis 
A)  Summarizing data 
B)  Finding anomalies and outliers 
C)  Uncovering patterns 
D)  Regression analysis

Question 16

Which predictive analytics technique would be used to predict the interest rate given from a lender (bank) to a borrower?

Accepted Answer

A)  Regression 
B)  Cross-tabulation 
C)  Looking for anomalies and outliers 
D)  Time-series analysis 
A)  Regression 
B)  Cross-tabulation 
C)  Looking for anomalies and outliers 
D)  Time-series analysis

Question 17

Regression analysis can be used to help confidently identify __________.

Accepted Answer

A)  which factors matter the most 
B)  which factors can be ignored 
C)  how factors influence each other 
D)  which factors matter most, can be ignored and how the factors influence each other 
A)  which factors matter the most 
B)  which factors can be ignored 
C)  how factors influence each other 
D)  which factors matter most, can be ignored and how the factors influence each other

Question 18

What would be the independent variable in a regression determining "How are firm overhead costs dependent on the time for production?" at a manufacturing company?

Accepted Answer

A)  Indirect material costs 
B)  Direct material costs 
C)  Machine hours 
D)  Overhead costs 
A)  Indirect material costs 
B)  Direct material costs 
C)  Machine hours 
D)  Overhead costs

Question 19

According to Altman's Z, the __________ amount of long-term profitability generally leads to __________ risk of bankruptcy.

Accepted Answer

A)  greater; greater 
B)  greater; lower 
C)  lesser; lower 
D)  lesser; no 
A)  greater; greater 
B)  greater; lower 
C)  lesser; lower 
D)  lesser; no

Question 20

__________ is a statistic that evaluates a customer's creditworthiness and ability to repay a loan.

Accepted Answer

A)  Credit score 
B)  Customer score 
C)  Going concern 
D)  Loan repayment score 
A)  Credit score 
B)  Customer score 
C)  Going concern 
D)  Loan repayment score

Estimating the appropriate cost driver as part of activity-based costing is an example of which type of predictive analytics?

Forecasting earnings is an example of which type of predictive analytics?

Which predictive analytics technique would be used to predict whether a firm is likely to have a material misstatement in the coming year?

According to Beneish, which of the following factors are predictive of financial statement fraud?

Which type of analysis would predictive analytics not be useful?

According to Altman, while those firms in the __________ zone are at risk of bankruptcy, they are not at significant risk of bankruptcy.

Forecasting sales for budget purposes is an example of which type of predictive analytics?

According to the text, Apple Computer was in the __________ zone in 1997, or at risk of bankruptcy.

What would be a possible independent variable in a regression determining "How do lenders set interest rates paid by borrowers?" at a lender?

The balance in the cash account is deterministic as compared to being probabilistic.

We would expect a positive (+) relationship between loan acceptance and employment length.

The ability of a computer to automatically learn without being explicitly programmed to do so is called __________.

The higher the expected risk, the lower the expected return.

If a company has an Altman Z-score of 3.1, the company would be classified in the __________.

Predictive analytics is useful for which type of analysis?

Which predictive analytics technique would be used to predict the interest rate given from a lender (bank) to a borrower?

Regression analysis can be used to help confidently identify __________.

What would be the independent variable in a regression determining "How are firm overhead costs dependent on the time for production?" at a manufacturing company?

According to Altman's Z, the amount of long-term profitability generally leads to risk of bankruptcy.

__________ is a statistic that evaluates a customer's creditworthiness and ability to repay a loan.

Using Data Analytics to Ask and Answer Accounting Questions

Master the Data: an Introduction to Accounting Data

Accounting Data Data Types and How They Are Used

Master the Data: Preparing Data for Analysis

Perform the Analysis: Types and Tools of Data Analyses

Perform the Analysis: Descriptive Analyses

Perform the Analysis: Diagnostic Analyses

Perform the Analysis: Prescriptive Analytics

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Exam 8: Perform the Analysis: Predictive Analytics

Estimating the appropriate cost driver as part of activity-based costing is an example of which type of predictive analytics?

Forecasting earnings is an example of which type of predictive analytics?

Which predictive analytics technique would be used to predict whether a firm is likely to have a material misstatement in the coming year?

According to Beneish, which of the following factors are predictive of financial statement fraud?

Which type of analysis would predictive analytics not be useful?

According to Altman, while those firms in the __________ zone are at risk of bankruptcy, they are not at significant risk of bankruptcy.

Forecasting sales for budget purposes is an example of which type of predictive analytics?

According to the text, Apple Computer was in the __________ zone in 1997, or at risk of bankruptcy.

What would be a possible independent variable in a regression determining "How do lenders set interest rates paid by borrowers?" at a lender?

The balance in the cash account is deterministic as compared to being probabilistic.

We would expect a positive (+) relationship between loan acceptance and employment length.

The ability of a computer to automatically learn without being explicitly programmed to do so is called __________.

The higher the expected risk, the lower the expected return.

If a company has an Altman Z-score of 3.1, the company would be classified in the __________.

Predictive analytics is useful for which type of analysis?

Which predictive analytics technique would be used to predict the interest rate given from a lender (bank) to a borrower?

Regression analysis can be used to help confidently identify __________.

What would be the independent variable in a regression determining "How are firm overhead costs dependent on the time for production?" at a manufacturing company?

According to Altman's Z, the __________ amount of long-term profitability generally leads to __________ risk of bankruptcy.

__________ is a statistic that evaluates a customer's creditworthiness and ability to repay a loan.

Using Data Analytics to Ask and Answer Accounting Questions

Master the Data: an Introduction to Accounting Data

Accounting Data Data Types and How They Are Used

Master the Data: Preparing Data for Analysis

Perform the Analysis: Types and Tools of Data Analyses

Perform the Analysis: Descriptive Analyses

Perform the Analysis: Diagnostic Analyses

Perform the Analysis: Prescriptive Analytics

Share the Story

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According to Altman's Z, the amount of long-term profitability generally leads to risk of bankruptcy.