Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

BEC CPA > ME Reviews > Flashcards

ME Reviews Flashcards

1
Q

Cost objectives (3)

A

Determine net income, valuation of unexpired costs, measurement of efficiency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Balanced scorecard general purpose

A 
Classify activities of an organization into major headings and identify the critical success factors & related goals (FICA)
Finance
Internal business process
Customer service
humAn capital
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Do fixed Costs change in relevant range

A

Hell no. Relevant range is the range which the relationship between a cost and driver remain valid; so fixed shouildl remain fixed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Inflation rate measures what

A

The rate at which the overall price level increases

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Increase in the price of a complementary product has what impact on the demand of the main product (ex: increase in price of gas has what impact on SUV sales)

A

Causes demand for SUVs to shift left

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Increase in the price of a inpu has what impact on the supply of the main product (ex: increase in price of steel has what impact on SUV sales)

A

Causes decrease in supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Reparation restrictions

A

Exist when a company invests money in a foreign company but is restricted from bringing that money back into its home country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Appropriate order for developing a business continuity plan

A

Assess key risks, identify mission-critical applications and data, develop a plan for handling applications, determine responsible parties for handling disaster recovery, test the recovery plan

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Investor with risk averse behavior will reduce risk mixing investments in a portfolio with different risk; what type of risk is the investor trying to reduce?

A

Unsystematic risk; firm specified or non-market risk

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Techniques to conserve cash

A
  • speed up collections (prompt billing, review credit policies)
  • take advantage of vendor grace periods
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

How long should auditors of issuers maintain work papers

A

7 years from the end of the fiscal period in which the audit or review was conducted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Periodically meeting with employees, service beneficiareiis, governance board members to comparing and updating the mission values and values is classified as what framework under COSO

A 
Monitoring activity (separate & ongoing evaluation)
Because they are meeting with employees, trying to make sure their enviornment is set
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Purpose & use of an executive information system

A

Software solution that gives senior executives ready access to data that has been consolidated at the enterprise level from different pieces of the company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

If something is “not marketable at split off” or “NRV cannot be determined at split off”, how do you arrive at the NRV?

A

If you cannot determine the NRV at split-off, the additional added costs at split off point must be subtracted from the FINAL SELLING PRICE.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Competitive strategy for an ologopolistic market structure

A

Allocate proper amount of resources to advertising to ensure product differentiation & adapt to price/volume changes
- oligopoly want differentiation, so a good way is to invest in advertising

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Market strategy for monopoly

A

Want to focus solely on profitability

Monopoly would focus investment on product enhancements & research

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Son-father-grandfather concept

A

Backup file system
Most recent file is the son
Second most recent is the father
Preceding file is the grandfather

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Formula for calculating opportunity costs (if given question regarding discount period)

A

(360/(total pay period- discount period) * (discount %/ (1-discount %)

Note: if given something like 3/10, net 45
This means, 3% discount if paid within 10 days (discount period) otherwise payment due in 45 days

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Goal of flexible budget analysis

A

Eliminate sales volume activity from budget variance analysis by adjusting the master budget amounts for actual sales

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Price elasticity of demand (midpoint method) formula

A

[(New quantity demanded - old QD)/ (new QD + old QD) ] / [(new price - old price) / (new price + old price) ]

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

4 stages of change continuum noted by COSO

A

Control baseline, followed by change identification, change management, control validation/update

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

When is price discrimination most effective

A

When customers are distinct segments, they can’t join together to gain bargaining power

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What does it mean when something is price inelastic

A

An increase in price results in an increase in total revenue, because the increase in price results in a decrease in quantity demanded that is proportionally smaller than the increase in price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

If demand is UNIT elastic, what impact does a change in price have on total revenue

A

No impact

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Definition of economic fluctuations (business cycles)
Fluctuations in the level of economic activity,relative to a long-term growth trend
26
Characterization of an economic trough
Unused productive capacity, and an unwillingness to risk investments Lowest of the low, no positive indicators for the future
27
Monopolistic competition strategic plan
Maintaining market share and planning for enhanced product differentiation
28
Sales volume variance formula
(Budgeted units sold - actual units sold) = variance in units CM per unit = budgeted CM/ budgeted units sold Variance due to sales volume = variance in units * CM per unit (budgeted)
29
What costing method is useful for external reporting
Absorption represents GAAP, so it’s the most beneficial
30
Equation for beta coefficient
% change in stock price / % change in market price
31
Formula for cost of equity capital
R = (D1/ P0) + g ``` G = expected growth rate in dividends P0 = current market price per share of common stock D1 = Current dividend per share * (1 + g) ```
32
What type of bond maintains a constant market value
Floating-rate bonds
33
3 factors of the fraud triangle
Pressure/motivation, opportunity, rationalization
34
Impact of cost pools and allocation bases when an ABC costing system replaces a traditional costing system
Both increase! ABC breaks down production process into many activities, then accumulates costs by activity (cost pool) and uses the appropriate allocation base for each activity
35
What formula is the best for evaluating the performance of a firm’s capital in a given year
Economic value added, as it uses the NOPAT and compares it to the required return for the capital EVA = NOPAT - Required Return Required Return = investment x WACC Positive EVA = performance meets standards Negative = performance is not meeting standards
36
ROA is used to do what
Evaluate the efficiency of asset usage & management
37
what two controls are a key component of disaster recovery plan
backup and downtime controls
38
objective of data security controls
to ensure that storage media are subject to approval prior to access, change or destruction
39
financial risk includes
risks of having financial resources lost, wasted or stoeln
40
in their most basic function, what is the role of a router, switches, gateways, and servers
routers manage network traffic, switches connect devices, gateways act as intermediaries, servers provide computing power
41
risk acceptance
taking no action, just accepting the risk
42
if the government wants to stimulate the economy, what does this mean & what actions can they take
STIMULATE THE ECONOMY = FISCAL POLICY | so to drive consumer demand, want to reduce consumer taxes and increase government spending
43
transaction exposure risk
risk that the currency a transaction is denominated in will be adversely impacted by the currency a transaction is settled in ex: greek company need to purchase 1,000 usd, risk that the value of euro will fall in relation to the dollar first step is to determine net currency inflows/outflows
44
profitability index
PV of net future cash inflows / PV of net initial investment
45
limitation of the profitability index
requires detailed long term forecasts of a given projects cash flows
46
length of time required to recover an initial cash outlay is determined using what method
payback method
47
types of risks (DIM CLP)
default, interest rate, market, credit, liquidity, price
48
market risk
``` either diversifiable (unsystematic/non-market) or nondiversificable (market/ systematic) ```
49
liquidity risk
can you sell the investment in a short period of time without price concessions
50
Market value at risk analysis is used to help an investor understand what type of financial risk
Financial risk
51
Risk averse behavior
Managers demand more return on an investment as risk increases
52
What does it mean when an investor is “certainty equivalent”
It’s the point an investor is indifferent to risk If the CE > expected value of an investment alternative = risk seeking If the CE < expected value of an investment alternative = risk averse, as they seek higher return for more risk taken on
53
Default risk premium
Additional compensation demanded by investor for bearing the risk that the security issuer will fail to pay interest and/or principal on a timely basis
54
What does a “DECLINING” domestic currency imply
It will become WEAKER in regard to the foreign currency | Means dollar is less expensive relative to the foreign currency
55
IRR is defined as
The rate of interest that equates the present value of cash outflows and the present value of cash inflows
56
The higher the PV factor, the IRR
The higher the PV factor, the lower the IRR. Increases to the investment or decreases to the cash flows increases the PV factor as: PV factor = investment / cash flows
57
Payback period formula
Net initial investment / average incremental cash flow *avg incremental cash flow = annual net cash savings, after tax If cash flows are not the same, simply just calculate manually until initial outlay = 0
58
Assuming excess capacity is available, what’s the minimum price acceptable for a special order
The SUM of the variable costs of the currently produced units. Ex: want to produce 10 units of Y (with excess capacity) and X variable costs are $5, and x fixed cost are $2 Minimum selling price of Y is $5! Ignore fixed costs, it’s not relevant bc it’s excess capacity
59
If not using excess capacity, what is minimum selling price you would accept for a special order
Sum of current VC + CM for next best alternative | So if current VC is $5, and next best alternative CM is $2, minimum price is $7
60
What is DUMPING
Price charged to foreign consumers on exported goods is < either price charged in domestic market or < production cost
61
Theory of constraints
Concerned with maxim action of throughput by identifying and alleviating constraints
62
Just in time purchasing systems, do you require more or less suppliers
LESS | Usually you require a better relationship with fewer suppliers to implement JIT systems
63
Transaction exposure, what to do for payable/receivables
Payables - BUY | receivable - SELL

BEC CPA (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions