Chapter 7 quiz

Question 1

Time management would be considered a quantitative date input

Answer 1

False

Question 2

A performance index for individual segments can be calculated by dividing the revenue objective by actual revenue

Answer 2

False

Question 3

If internal auditors are used for the planning audit, they should be

Answer 3

employees who are knowledgable of working relationships and have familiarity with the organization’s operating environment

Question 4

Common expense ratios are profit margins, selling expense ratio, cost per sales call, and advertising expense ratio

Answer 4

True

Question 5

There are only two basic types of cost analysis, analysis of ledger accounts and functional analysis

Answer 5

False

Question 6

What does functional cost analysis involve?

Answer 6

allocating costs from the natural accounts to accounts set up for each function or activity

Question 7

What of the following are basic types of cost analyses?

Answer 7

all of the above are used in cost analyses

Question 8

What are the methods of allocating indirect costs to segments like products, customers, territories, etc.

Answer 8

all the above are methods of allocating indirect costs

Question 9

A planning audit is a

Answer 9

comprehensive, systematic, independent and periodic review of an organizations environment, objectives, strategies, and activities

Question 10

Relative market share is the total revenue of the market divided by the firm’s revenue

Answer 10

False

Question 11

The four key control areas are: revenue, costs, public, and customers

Answer 11

False

Question 12

Asset turnover is a measure of liability

Answer 12

False

Question 13

Cost control analysis is designed to give managers input on the costs of products, functions, and expenses

Answer 13

True

Question 14

Which of the following is not a purpose of an audit?

Answer 14

determine executive’s bonuses

Question 15

Relative market share is described as:

Answer 15

one firm’s share of the market held by the top two, three, or four firms

Question 16

Gross profit margin is an indication of the total margin available to cover operating expenses and yield a profit

Answer 16

True

Question 17

Share of total market is calculated by:

Answer 17

a firm’s sales divided by total sales in the market

Question 18

The four key control areas are revenue, costs, profits, and stakeholders

Answer 18

false

Question 19

One area of revenue control data is provided from an analysis of individual segments

Answer 19

True