BEC EXAM Flashcards
From a corporate governance standpoint, which of the following best describes the main goal of a form of executive compensation?
Align the incentives of executives with those of the corporate shareholders.
The COSO definition of internal control considers control activities a(n)
Component of internal control.
If internal control is properly designed, the same employee should not be permitted to
Prepare disbursement vouchers and sign checks because the preparation of disbursement vouchers and signing of checks places an individual in a position in which he or she can both prepare erroneous vouchers and then pay them.
A director of Riley Corporation is made aware of an opportunity that would be advantageous and of interest to the corporation. Which of the following represents his best course of action?
Bring the opportunity to Riley Corporation.
For a manufacturing company, which of the following is an example of a period cost rather than a product cost?
Wages of salespersons.
In developing a variable factory overhead application rate for use in a process costing system, which of the following could be used in the denominator?
Estimated direct manufacturing labor hours.
What’s the Direct Method of distributing costs
Distributing service department overhead costs directly to producing departments without allocation to the other service department.
Lane Co. produces main products Kul and Wu. The process also yields byproduct Zef. Net realizable value of byproduct Zef is subtracted from joint production cost of Kul and Wu. If Lane uses the net realizable value method for allocating joint cost, how much of the joint cost should be allocated to product Kul?
$ 26,667 because net realizable value (NRV) is the predicted selling price in the ordinary course of business, less reasonably predictable costs of completion and disposal.
An overhead application rate is commonly called…
A predetermined overhead rate
Auditing standards divide internal control into five interrelated components as follows:
(1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring.
If the U.S. dollar declines in value relative to the currencies of many of its trading partners, the likely result is that…
U.S. exports will tend to increase. Weaker dollar decreases the prices of U.S. exports, which should increase the demand for these goods.
Which of the following activities involves collecting data about all segments of the firm’s general environment to understand the effects of economic changes on the firm’s industry?
Scanning involves a review of all segments of the general environment.
The law of diminishing marginal utility states that
Marginal utility will decline as a consumer acquires additional units of a specific product. value.
Which of the following types of merger is most likely to contribute to the formation of an oligopoly?
Horizontal. An oligopoly is formed by the combination of firms in the same line of business, as in a horizontal merger. An oligopoly is a market for a good or service that is dominated by a small number of firms.
