BEC VII Blake CPA

Question 1

Ransomware

Answer 1

hacker locks a company out of their own network

Want money and will give network back

Question 2

Smishing attack

Answer 2

hacker attempts to gain access to a users phone

Question 3

1Bots, 2Zombies & 3Botnets

Answer 3

infected with virus, computer that is being controlled by hacker

Botnets -

Question 4

Complete Disaster REcovery plan

Answer 4

Alternate processing site

Backup and offsite storage procedures

Identification of critical applications

Test of the plan

Question 5

Phising attack

Answer 5

sends user fake email to mimic a company that consumers consider to be well-trusted

Question 6

Pharming attack

Answer 6

hacker sends user to a fake website

Question 7

Acceptable Use Policy

Answer 7

specifcy policies for a computer network that employees must sign befor receiving access

Question 8

The cash budget must be prepared before you can complete

Answer 8

GForecasted Balance Sheet

Forecasted IS can be prepared BEFORE CASH BUDGET

Question 9

Which of the following transactions does not change the current ratio or total current assets?

Answer 9

Cash Advance to a divisonal Office

Dr A/R - Cash Advance
Cr Cash

Reduction in cash is offset by an increase in receivables

Cash dividend J/E:

Dr Dividend declared
Cr payable

Question 10

Which of the following statement is correct regarding sales and costs presented in B/E charts?

Answer 10

Sales only = Total costs at Breakeven point

Question 11

Company increased its variable SG&A expenses while keeping SG&A expenses same, What affect with this have on absorption and variable approaches?

Answer 11

Operating margin will be the same under both the absorption approach and contribution approach

Produce same bottom line figure

Question 12

Rule for VOH efficiency variance

Answer 12

Budgetrd VOH based on STD hours - Budgeted VOH on Actual Hours

DL based on standard hours mean DL HOURS ALLOWED for actual level of production NOT Actual DL hours used

ex; .1 hour per fram & 19,000 actually produced * $2 STD Rate

Actual: 2,100 Hours Actualy used * $2 STD Rate

Question 13

In Microeconomicss, distinguishing characteristic of the long run supply side is that:

Answer 13

All Inputs Are Variable

Means that in the long run all costs are variable in accounting

ex: FC of Dep of a factory building becomes a VC when a 2nd factory building is added

Question 14

MR=MC
MR > MC
MC>MR

Answer 14

MR =MC Most profitable strategy for any market structure

Whem marginal revenue is greater than marginal cost, profits are left on the table

When MC > MR, firm is losing $ by contuining to produce

Question 15

Circular combination

Answer 15

Economies of scale is not consistent with this type of combination

Merger of different types of businesses with remote connections under a single MGT

Question 16

Horizontal combo

Answer 16

Economies of scale would be effective

Question 17

Opening Markets to Foreign Investments (Increase in Globalization factors)

Answer 17

Part of Globalization: distribution of industrial & service activites across many nations

Investment growth rates will increase

Emerging markets will become more integrated with world markets

Reduce volatility of emerging markets when integrated with world markets

Local firms will see decrease in their cost of capital, b/c of an increase of growth & demand

Question 18

Prescriptive analytics

Answer 18

reveal how to achieve a desired event

Question 19

Theory Of Constraints

Answer 19

Concerned with maximizing throughput by identifying and elleviating constraints

Question 20

JIT

Answer 20

Cost per purchase order decreases

Inventory unit carrying cost increases
maintaining fewer itms in inv or holding items for a shorter period will actually increases carrying costs

Question 21

E-Commerce environments place more epmhasis on what aspect compared tot hte planning of a traditional organization?

Answer 21

Maintain redundant systems for instand availibility to assure the flow of transactions in a e-commerce environment compared to a traditional organization

Question 22

Program Modification controls

Answer 22

control over modfications of programs that are used in production applications

Prevent changes by unauthorized personnel and also that track program changes so that there is an exact record of what version of the program was running at any given time

contains software MGT tool & change request tracking tool

Question 23

Operating $ Flow

Answer 23

N.I.
+Dep & Amort
+ (Decrease in CA)
-(Increase CA)
+(Increase AP)
(Subtract Reduce A/P)
-Capital expenditures

Question 24

How to interpret P/E Ratio

Answer 24

Market Price per share/Earnings
P/E>Median Overvalued
P/E<Median Undervalued

Question 25

Approaches to system conversion:
Direct Conversion (Highest Risk)

Parallel Conversion

Phase-in conversion

Pilot conversion

Answer 25

1) Use the new one and drop the old one instantly - may lose data
2) Old system & New System used at the same time (duplicate work)
3) Multiple pieces 1, 2, 3, 4 - shows issue may see
4) Select people use it, not going live

Question 26

COSO CUBE

Audit framework is not a componenent of COSO Cube

Answer 26

Organizational structure is shown as a 3rd dimension (entity level, division, operating unit, function)

3 Categories of objectives: operations, reporting and compliance at shown as Columns rather than rows

Five components: CRIME are shown as ROWS rather than columns

Question 27

NEXT YEAR, WATTS INC EXPECTS TO PAY DIVIDENDS OF $1.50/SHARE. CURRENT STOCK PRICE IS $20 & EQUITY INVESTORS ARE REQUIRING A RETURN OF 9%

WHAT IS THE GROWTH RATE?

Answer 27

UE CONSTANT GROWTH DIVIDEND DISCOUNT MODEL

R - D1/E + G =

.09-1.50/20 = G

1.5%

Question 28

OBJECTIVE OF EOQ

Answer 28

MINIMIZE TOTAL INVENTORY COSTS

ANTICIPATES ORDERS AT THE POINT WHERE CARRYING COSTS ARE NEAREST TO RESTOCKING COSTS

Question 29

EXAMPLES OF CONVERTING A/R INTO CASH

Answer 29

COLLECTION AGENCIES
FACTORING A/R
CASH DISCOUNTS
EFT’S

Question 30

is NI USED IN NPV CALUCLATIONS

Answer 30

NO

ONLY PV OF FUTURE $ INFLOWS

Question 31

CAN USE EXPEXTED RETURN ON EQUITY AS MARKET RISK IN CAPM

EX: BETA = 1.05
RISK FREE RATE = 6%
EXPECTED RETURN ON EQUITY = 16%

Answer 31

=.06 + 1.05 * (.16-.06)

Question 32

NPV ASSUMES THAT $ FLOWS ARE REINVESTED AT

Answer 32

DISCOUNT RATE USED IN ANALYSIS

Question 33

PROFIT CENTER

INVESTMENT CENTER

REVENUE CENTER

COST CENTER

Answer 33

PC - RESPONSIBLE FOR REVENUES AND COSTS

IC - RESPONSIBLE FOR REVENUES, EXPENSES & INVESTED CAPITAL

RC - ONLY RESONSIBLE FOR REVENUES

COST CENTER - PNLY RESPONSIBLE FOR COSTS

Question 34

MARKET SHARE VARIANCE

Answer 34

ACTUAL / TOTAL MARKET SHARE (UNITS) - BUDGET / TOTAL MARKET SHARE (UNITS) * TOTAL UNITS IN MARKET * BUDGETED CM PER UNIT

Question 35

WHAT WOULD BE THE PRICE ELASTICITY OF PERFECTLY INLASTIC DEMAND?

WHAT WOULD BE THE PRICE ELASTICITY OF A PRODUCT THAT IS UNIT ELASTIC

Answer 35

PERFECTLY INALSITC = 0

UNIT ELASTIC = 1

Question 36

A multiperiod project has a positive net present value. Which of the following statements is correct regarding its required rate of return?

Answer 36

Required rate of return MUST BE LESS THAN THE PROJECT INTERNAL RATE OF RETURN

A PROJECT WITH A POSTIIVE NPV WILL HAVE AN IRR GREATER THAN THE REQUIRED RETURN USED TO COMPUTE THE NPV