BEC 6 Flashcards
Are social security payments included or excluded from GDP using the expenditures approach?
Exclude
Are payments for doctor’s fees included or excluded from GDP using the expenditures approach?
Include
Are purchases of U.S. Made goods by foreign customers included or excluded from GDP using the expenditures approach?
Include
Which one of the following U.S. GAAP approaches to determining fair value converts future amounts to current amounts?
Market approach.
Sales comparison approach.
Income approach.
Cost approach.
Income approach.
Which of the following external factors would increase the inherent risk of a highly leveraged audit client that has closely monitored profit expectations and imports most of its resale inventory from Europe?
An increase in the prime interest rate.
A change in the management of the marketing department.
A low rate of inflation.
A stronger dollar relative to the euro.
An increase in the prime interest rate.
Virgil Corp. uses a standard cost system. In May, Virgil purchased and used 17,500 pounds of materials at a cost of $70,000. The materials usage variance was $2,500 unfavorable and the standard materials allowed for May production was 17,000 pounds. What was the materials price variance for May?
$17,500 favorable.
$17,500 unfavorable.
$15,000 favorable.
$15,000 unfavorable.
$17,500 favorable.
This answer is correct. The materials price variance is equal to (Actual quantity × Actual price) − (Actual quantity × Standard cost) and the materials usage variance is equal to (Actual quantity × Standard price) − (Standard quantity × Standard price). Since the standard quantity for May was 17,000 and the actual quantity was 17,500, the excess quantity used was 500 units (17,000 − 17,500). Therefore, the standard cost is $5.00 per unit ($2,500 unfavorable usage variance ÷ 500 excess units used), and the price variance is $17,500 favorable [$70,000 actual cost − (17,500 actual quantity used × $5.00 standard unit cost)].
Which one of the following sets identifies the three countries that are most likely the world’s largest export countries?
U.S., China, and Japan.
China, Germany, and Japan.
Germany, U.K., and China.
U.S., Germany, and China.
U.S., Germany, and China.
Which of the following is not included in a service auditor’s report?
Description of scope and nature of the auditor’s procedures.
Statement of inherent risk limitations present in the service organization.
Identification of parties for whom the report is intended.
Reference to the covered applications.
Statement of inherent risk limitations present in the service organization.
Roles for accountants in big data include all of the following except:
Assessing the quality and integrity of big data.
Integrating big data into evaluations of internal control.
Building big data systems.
Data scientists.
Building big data systems.
A manufacturing company properly classifies and accounts for one product as a by-product rather than as a main product because it
Can never be developed into a main product by this or any other manufacturer.
Has no sales value to the manufacturing company.
Has low physical volume when compared to the other main products.
Has low sales value when compared to the main products.
Has low sales value when compared to the main products.
The Slippin’ into Darkness Mortuary is reviewing its cybersecurity to explore its current state and related risks as a part of establishing high-level objectives for cybersecurity. In the framework for cybersecurity, this is an example of the element ______ and the function _______.
Categories; identify
Subcategories; respond
References; identify
Functions; detect
Categories; identify
A single-product company prepares income statements using both absorption and variable costing methods. Manufacturing overhead cost applied per unit produced in Year 2 was the same as in Year 1.
The Year 2 variable costing statement reported a profit, whereas the Year 2 absorption costing statement reported a loss.
The difference in reported income could be explained by the units produced in Year 2 being
Less than the units sold in Year 2.
Less than the activity level used for allocating overhead to the product.
In excess of the activity level used for allocating overhead to the product.
In excess of the units sold in Year 2.
Less than the units sold in Year 2.
Absorption costing includes fixed manufacturing costs as part of product costs; direct costing expenses fixed manufacturing costs as a period expense. Because of this, inventory valuation under absorption costing is more than inventory valuation under direct costing. When a firm sells more than it produces, it must use some of its existing inventory. Since absorption costing has a higher inventory valuation, the cost of goods sold under absorption costing will be higher (and income lower) than under direct costing.
Which one of the following would not cause an increase in demand for a commodity?
An increase in the number of consumers.
An increase in the price of a substitute commodity.
An increase in consumers’ preference for the commodity.
A reduction in the price of the commodity.
A reduction in the price of the commodity.
Which of the following statements is correct concerning the security of messages in an electronic data interchange (EDI) system?
Removable drives that can be locked up at night provide adequate security when the confidentiality of data is the primary risk.
Message authentication in EDI systems performs the same function as segregation of duties in other information systems.
Encryption performed by a physically secure hardware device is more secure than encryption performed by software.
Security at the transaction phase in EDI systems is not necessary because problems at that level will be identified by the service provider.
Encryption performed by a physically secure hardware device is more secure than encryption performed by software.
How do you calculate velocity of money?
Nominal GDP/the money supply
