BEC VII Blake CPA Flashcards
Ransomware
hacker locks a company out of their own network
Want money and will give network back
Smishing attack
hacker attempts to gain access to a users phone
1Bots, 2Zombies & 3Botnets
infected with virus, computer that is being controlled by hacker
Botnets -
Complete Disaster REcovery plan
Alternate processing site
Backup and offsite storage procedures
Identification of critical applications
Test of the plan
Phising attack
sends user fake email to mimic a company that consumers consider to be well-trusted
Pharming attack
hacker sends user to a fake website
Acceptable Use Policy
specifcy policies for a computer network that employees must sign befor receiving access
The cash budget must be prepared before you can complete
GForecasted Balance Sheet
Forecasted IS can be prepared BEFORE CASH BUDGET
Which of the following transactions does not change the current ratio or total current assets?
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
Which of the following statement is correct regarding sales and costs presented in B/E charts?
Sales only = Total costs at Breakeven point
Company increased its variable SG&A expenses while keeping SG&A expenses same, What affect with this have on absorption and variable approaches?
Operating margin will be the same under both the absorption approach and contribution approach
Produce same bottom line figure
Rule for VOH efficiency variance
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
In Microeconomicss, distinguishing characteristic of the long run supply side is that:
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
MR=MC
MR > MC
MC>MR
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
Circular combination
Economies of scale is not consistent with this type of combination
Merger of different types of businesses with remote connections under a single MGT
Horizontal combo
Economies of scale would be effective
Opening Markets to Foreign Investments (Increase in Globalization factors)
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
Prescriptive analytics
reveal how to achieve a desired event
Theory Of Constraints
Concerned with maximizing throughput by identifying and elleviating constraints
JIT
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
E-Commerce environments place more epmhasis on what aspect compared tot hte planning of a traditional organization?
Maintain redundant systems for instand availibility to assure the flow of transactions in a e-commerce environment compared to a traditional organization
Program Modification controls
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
Operating $ Flow
N.I.
+Dep & Amort
+ (Decrease in CA)
-(Increase CA)
+(Increase AP)
(Subtract Reduce A/P)
-Capital expenditures
How to interpret P/E Ratio
Market Price per share/Earnings
P/E>Median Overvalued
P/E<Median Undervalued
Approaches to system conversion:
Direct Conversion (Highest Risk)
Parallel Conversion
Phase-in conversion
Pilot conversion
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
COSO CUBE
Audit framework is not a componenent of COSO Cube
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
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?
UE CONSTANT GROWTH DIVIDEND DISCOUNT MODEL
R - D1/E + G =
.09-1.50/20 = G
1.5%
OBJECTIVE OF EOQ
MINIMIZE TOTAL INVENTORY COSTS
ANTICIPATES ORDERS AT THE POINT WHERE CARRYING COSTS ARE NEAREST TO RESTOCKING COSTS
EXAMPLES OF CONVERTING A/R INTO CASH
COLLECTION AGENCIES
FACTORING A/R
CASH DISCOUNTS
EFT’S
is NI USED IN NPV CALUCLATIONS
NO
ONLY PV OF FUTURE $ INFLOWS
CAN USE EXPEXTED RETURN ON EQUITY AS MARKET RISK IN CAPM
EX: BETA = 1.05
RISK FREE RATE = 6%
EXPECTED RETURN ON EQUITY = 16%
=.06 + 1.05 * (.16-.06)
NPV ASSUMES THAT $ FLOWS ARE REINVESTED AT
DISCOUNT RATE USED IN ANALYSIS
PROFIT CENTER
INVESTMENT CENTER
REVENUE CENTER
COST CENTER
PC - RESPONSIBLE FOR REVENUES AND COSTS
IC - RESPONSIBLE FOR REVENUES, EXPENSES & INVESTED CAPITAL
RC - ONLY RESONSIBLE FOR REVENUES
COST CENTER - PNLY RESPONSIBLE FOR COSTS
MARKET SHARE VARIANCE
ACTUAL / TOTAL MARKET SHARE (UNITS) - BUDGET / TOTAL MARKET SHARE (UNITS) * TOTAL UNITS IN MARKET * BUDGETED CM PER UNIT
WHAT WOULD BE THE PRICE ELASTICITY OF PERFECTLY INLASTIC DEMAND?
WHAT WOULD BE THE PRICE ELASTICITY OF A PRODUCT THAT IS UNIT ELASTIC
PERFECTLY INALSITC = 0
UNIT ELASTIC = 1
A multiperiod project has a positive net present value. Which of the following statements is correct regarding its required rate of return?
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
