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CPA- BEC > MISC > Flashcards

MISC Flashcards

1
Q

CAPM

A

=RFR+Beta(Mkt Rate-RFR)

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2
Q

Negotiable CDS

A
  • Negotiable CDs generally carry interest rates slightly lower than bankers’ acceptances (which are drafts drawn on deposits at a bank) or commercial paper (which is unsecured debt issued by credit worthy customers).
  • have a formal secondary market
  • are regulated by the Fed
  • sold in denominations of $100,000
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3
Q

Avg gross receivable

A

Average daily sales × average collection period.

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4
Q

COSO- tone at the top

A
  • creates compliance-supporting culture committed to risk management
  • navigates gray areas
  • promotes willingness to seek assistance and report problems before it is too late
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5
Q

activity based costing- external or internal

A

not OK for external

OK for internal

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6
Q

job costing - external or internal

A

OK for external

OK for internal

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7
Q

variable costing - internal or external

A

not OK for external

OK for internal

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8
Q

process costing - internal or external

A

OK for internal

OK for external

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9
Q

direct labor

A

“operators”

NOT “mechanics” or “foreman”

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10
Q

cost of ending inventory

A

Beg Inventory + Production costs (includes direct labor, direct material, and applied overhead) - COGS

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11
Q

SOX addresses the problems related to inadequate board oversight by requiring public companies to have

A

Audit committee

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12
Q

Divesting of all properties on Florida coast in response to risk of interruptions from hurricanes is an example of

A

avoidance

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13
Q

database marketing

A

locating customers

promoting products to customers who use other related products

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14
Q

operating objective

A

eg. conducting focus groups

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15
Q

breach of duty of loyalty

A

usurping corporate opportunity

not presenting to the board of directors

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16
Q

criteria for evaluating the effectiveness of enterprise risk management are:

A

the components of the ERM framework

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17
Q

“someone who can get our new off the shelf production software to do what we want it to do so we can get on with running our business:

A

-systems analyst
take on the role of learning a purchased package and would have the job of integrating it into any existing software
-responsible for training staff in its use

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18
Q

database management systems advantages

A
  • reduced data redundancy and inconsistencies

- data accessibility increases timeliness, effectiveness, and availability of information

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19
Q

batch financial totals would detect:

A

transposition error on one employees paycheck on a weekly payroll run

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20
Q

cloud computing

A

allows organizations to use the internet to access and use services and applications that run on remote third party technology infrastructure

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21
Q

attribute of mgmt report that has greatest impact on mgmts ability to make effective decisions

A

relevance

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22
Q

business info systems

A
  • transaction processing systems

- management information systems

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23
Q

costs assigned to inventory under variable costing

A

variable overhead
direct material
direct labor

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24
Q

employee satisfaction and retention (balanced scorecard concept)

A

learning and growth

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25
Q

delphi model relies mostly on

A

judgement

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26
Q

performance reports include:

A
  • user focus
  • exceptional items that are controllable
  • specific time horizons
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27
Q

contribution margin

A

Sales price per unit- Variable cost per unit

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28
Q

breakeven formula

A

fixed costs/ contribution margin per unit

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29
Q

before tax profit

A

after tax profit/(1-tax rate)

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30
Q

units sold to achieve profit

A

(fixed costs + profit) / contribution margin per unit

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31
Q

for a company that produces more than one product, sales volume variance can be divided into

A

sales quantity variance and sales mix variance

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32
Q

total manufacturing costs

A

direct materials used + direct labor + overhead applied

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33
Q

value chain analysis

A

process of developing macro level flow charts of business processes that produce products or services and then identifying the value added by each process

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34
Q

process improvement

A

represents results of total quality management efforts

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35
Q

continuous quality improvement

A

represents an unswerving focus on customer satisfaction and quality, not necessarily the specific steps associated with value chain analysis

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36
Q

benchmarking

A

relates to determining the best practices and often using those practices as standards

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37
Q

imputed interest rate used in residual income

A

target return on investment set by company’s management

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38
Q

DM price variance

A

actual qty purchased x (actual price-standard price)

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39
Q

DM quantity usage variance

A

standard price x (actual quantity used -standard quantity allowed)

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40
Q

DL rate variance

A

actual hours worked x (actual rate-standard rate)

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41
Q

DL efficiency variance

A

standard rate x (actual hours worked - standard hours allowed)

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42
Q

a large decline in investment spending caused by a sharp rise in interest rates will most likely:

A

shift the aggregate demand curve to shift left

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43
Q

first step in evaluation of transaction exposure is :

A

computation of : net currency inflows or outflows

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44
Q

annual after tax cash savings

A

cost of equipment/ expected payback period

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45
Q

appropriate working capital management

A

matches the maturity life of each asset with the length of the financial instrument used to finance that asset

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46
Q

return maximization

A

seeks to obtain optimal return rate by asset utilization

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47
Q

financial leverage

A

amount of debt used to finance an asset

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48
Q

operating leverage

A

degree that fixed costs are used in production process

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49
Q

strategic risk

A
  1. risk of choosing inappropriate technology

2. financial risk includes risk of having financial resources lost, wasted, or stolen

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50
Q

cost of goods manufactured

A

direct material beg +purchases -returns + transportation in - Ending inventory = direct materials used +direct labor = total direct costs + total indirect costs

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51
Q

a firm earning a profit can increase its return on investment by

A

increasing sales revenues and operating expenses by the same percentage

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52
Q

monitor and evaluate

A

ensuring IT function complies w/in external requirements COBIt process domain

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53
Q

GDP =

A

Government purchases + gross private domestic investment + personal consumption expenditures + net exports (GICE)

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54
Q

real GDP is falling while aggregate price level is falling

A

shift left in aggregate demand curve

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55
Q

sharp rise in nominal wages =>

A

cost push inflation

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56
Q

mitigation of economic risk

A

increasing or reducing sales in foreign markets represents a restructuring technique normally associated with mitigation of economic risk

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57
Q

futures hedge is an appropriate technique to :

A

mitigate transaction risk

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58
Q

forward hedge is an appropriate technique

A

to mitigate transaction risk

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59
Q

currency option hedge is appropriate technique to

A

mitigate transaction risk

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60
Q

cost of preferred stock =

A

dividend/(Sales price-underwriting fee)

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61
Q

cost to issue commercial paper =

A

(original issue discount + transaction fees) / total borrowed
======**annuallly**=======

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62
Q

effective annualized percentage cost of financing

A
  1. Actual interest (PxRatexTIme)
  2. Subtract interest earned (If any ) on additinoal required compensating balance
  3. Divide the difference (net interest) by the loan proceeds the company has use of
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63
Q

ad hoc report

A

report that does not currently exist but can be readily produced without having to get a software developer involved

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64
Q

push reports

A

reports that are automatically sent to an end users scree or desktop

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65
Q

query

A

specific question made up of various criteria that the end user can pose to a system; the question may or may not have been previously defined and programmed in to the system

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66
Q

disaster recovery

A

consists of plans for continuing operations in the event of destruction of not only program and data files but also processing capability

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67
Q

hot site

A

off site location completely equipped to take over oganization data processing

68
Q

cold site

A

off site location that has all of the electrical connections and other physical requirements for data processingbu t doesn to havet he actual equipment

69
Q

warm site

A

facility already equipped with the necessary hardware that creates a replication of the primary data center

70
Q

costs included in inventoriable costs -absorption costing

A

direct material, direct labor, all overhead

  • all product costs and no period expenses
  • includes fixed overhead
71
Q

pareto diagram

A

quality program used to rank an analyze individual and cumulative causes of defects

72
Q

cost of goods transferred out

A
  1. Cost of materials transferred out (% DM total)
  2. Conversion costs transferred out (100% for equivalent units transferred out + % of Ending inventory (EQU)
  3. Total
73
Q

COGM

A

Total MFTG costs + beg WIP - end WIP

74
Q

cost of goods transferred to finished goods

A

beg WIP + cost of manufacturing - Ending WIP

75
Q

total manufacturing cost

A

direct materials + direct labor + overhead applied

76
Q

gross profit

A

Sales - (Beg Inventory + COGM - EI)

77
Q

normal spoilage

A

normal spoilage * percent sold

allocated to good production

78
Q

abnormal spoilage

A

allocated to income statement

79
Q

use of activity based costing normally results in : (compared to normal costing)

A

substantially greater costs for low-volume products than reported by traditional costing

80
Q

net sales value at split off point

A

For purposes of allocating joint costs to joint products, the sales price at point of sale, reduced by cost to complete after split-off, is assumed to be equal

81
Q

Establishing objectives that will support the mission and vision of an organization generally involve supporting the mission with

A

Strategic objectives, supported by strategies and related objective

82
Q

restricted stock option programs

A

may reward current performance but also emphasize future performance. The employee must typically stay through the option strike period and the option is only valuable if the stock price increases.

83
Q

circuit level gateways

A

only allow data into a network that result from requests from computers inside the network.

84
Q

Data entry and application programming (allocation)

A

Application programmers should not be allowed to enter data in production systems nor should they have unrestricted and uncontrolled access to application program change management systems. An application programmer is the person responsible for writing and/or maintaining application programs and should not be responsible for also controlling or handling data.

85
Q

asymmetric encryption

A

uses a public key to encrypt messages and a private key to decrypt

86
Q

profit center

A

responsible for revenues and costs

87
Q

revenue center

A

responsible for revenues only

88
Q

operating unit

A

division, not precisely defined

89
Q

investment center

A

responsible for revenues, costs, and invested capital

90
Q

Refinancing a short-term note payable with a two-year note payable would increase

A

working capital

91
Q

investment turnover

A

sales/avg investment

92
Q

if a multiperiod project has a positive NPV

A

then required rate of return is less than internal rate of return

93
Q

If a product required a great deal of electricity to produce, and crude oil prices increased, what costs most likely increased?

A

conversion costs (includes direct labor and overhead)

94
Q

Able Corporation owns numerous businesses along the coast of Florida. The company’s management has identified business interruption events as a potential risk resulting from storm damages caused by hurricanes. The company elects to not only insure its properties but to “buy down” standard deductibles with additional premium. Able’s response to potential risks is known as

A

sharing

95
Q

risk appetite has generally been exceeded when

A

the likelihood and impact of negative events significantly exceeds residual risks

96
Q

equivalent units for a period

A

completed and transferred out, + Ending WIP (%complete)

97
Q

product cost

A

assigned to goods purchased or manufactured for resale

98
Q

relevant costs

A

costs relevant to a particular decision

99
Q

period costs

A

costs expensed during a period not charged to a product

100
Q

opportunity costs

A

costs that would have been saved or profits that would have been earned if another decision had been made

101
Q

weighted average and FIFO equivalent units would be the same when:

A

no beginning inventory exists

102
Q

sequence of events in AIS:

A
  1. Transaction data from source documents is entered by end user
  2. Original source documents are filed
  3. Transactions recorded in appropriate journal
  4. Transactions are posted to the general and subsidiary ledgers
  5. Trial balances are prepared
  6. Financial reports are generated
103
Q

authoritative standards

A

standards set by management without employee input

104
Q

participative standards

A

standards set by management with collaborative input

105
Q

ideal standards

A

based on optimum conditions

106
Q

attainable standards

A

represent per unit budgets that assume normal conditions

107
Q

underlying assumptions of cost-volume-profit

A

All costs can be divided into fixed and variable elements.
Volume is the only relevant factor affecting cost.
Selling prices are to be unchanged

108
Q

variable costs include

A

direct materials, direct labor, delivery per unit, sales commissions

109
Q

difference in net income using variable costing or absorption costing

A

will be the amount of fixed manufacturing cost per unit times change in inventory

110
Q

The best basis upon which cost standards should be set to measure controllable production inefficiencies is

A

engineering standards based on attainable performance

111
Q

As a company becomes more conservative in its working capital management, it tends to have an

A

Increase in the ratio of current assets to units of output

112
Q

Refinancing of accounts payable with a two year note payable would:

A

increase working capital

113
Q

working capital increases when:

A

current assets increase or current liabilities decrease

114
Q

product demand is more elastic when:

A

more substitutes are available

115
Q

to increase money supply, the Fed could

A

reduce the discount rate

116
Q

a period of inflation increases:

A

price level, which is negatively related to purchasing power of money

117
Q

a decrease in the average age of the workforce would cause:

A

frictional unemployment

-younger workers tend to switch jobs

118
Q

internal failure costs

A

tooling changes

119
Q

appraisal costs

A

testing, quality checks, inspection

120
Q

external failure costs

A

lost customers

121
Q

prevention costs

A

preventative maintenance , employee training

122
Q

globalization is often associated with :

A

comparative advantage and increased specialization

123
Q

increased globalization is made possible by:

A

deregulation of international financial markets
reduced transportation costs
technological advancements

124
Q

control chart

A

goalpost conformance, zero defects

125
Q

ROI

A

Income/Investment

Investment includes working capital + avg assets

126
Q

cost of equity =

A

(Expected dividend/current share price) + Growth Rate

127
Q

payback period method

A

uses expected cash flows, not annual income

128
Q

financial leverage increases when

A

debt to equity ratio increases (use more debt)

129
Q

effect on revenue if demand for a product is unit elastic

A

no effect

130
Q

Under pure competition, strategic plans focus on

A

maintaining market share

being responsive to the mkt conditions related to sales price

131
Q

PEG ratio

A

=(Price / Earnings)/(Growth rate * 100)

132
Q

performance of quality assurance occurs in the

A

implementation process, after the standard of quality has been defined

133
Q

prime costs

A

direct labor + direct material

134
Q

conversion cost

A

direct labor + manufacturing overhead

135
Q

traditional costing application of overhead

A
  1. calculated overhead rate = budgeted overhead costs/estimated cost driver
  2. applied overhead = actual cost driver/ overhead rate
136
Q

COGM

A

WIP Beg + DM used + Direct Labor + Mftg overhead applied = total costs available - WIP inventory, end = COGM

137
Q

DM Used

A

Beg DM + purchases + Freight in - returns = Available - EI DM = materials used

138
Q

COGS

A

FG Beg + COGM =COGAS - FG End Inventory= COGS

139
Q

BASE

A

Beg Inventory Add purchases/ used Subtract materials used/ transferred Equals Ending Inventory

140
Q

FIFO Equivalent units components

A

Beg WIP * (1-%complete) + EQU Started and completed - Beg WIP (total) + End WIP (% complete)

141
Q

Weighted average equivalent units components

A

1) units completed during the month (beg WIP + units started and completed)
2) Units partially complete at the end of the period

142
Q

An application programmer would have the responsibility to

A

code approved changes to a payroll program

143
Q

Systems analysis is the first step in the systems development life cycle

A

xxx

144
Q

cash conversion cycle =

A

inventory conversion period + receivables collection period - payables deferral period

145
Q

he Federal Reserve use to reduce inflationary pressures

A

increase margin requirements

146
Q

expansionary monetary policy

A

purchase securities and lower discount rate

147
Q

the primary reason for a company to agree to a debt covenant limiting the percentage of its long-term debt is

A

to reduce the coupon rate on NEW bonds being sold

148
Q

project sponsor

A

individual at the executive level of management who is responsible for allocating funding and resources to the project. The role of the project sponsor includes responsibility for overall project delivery.

149
Q

transaction risk

A

potential to lose based on changes in the exchange rates

150
Q

translation risk

A

risk that assets, liabilities, equity or income of consolidate organization that includes foreign subsidiaries will change as a result of changes in exchange rate

151
Q

economic risk

A

potential that the present value of an organizations cash flows could increase or decrease as a result of changes in the exchange rates

152
Q

valuation of start ups

A

price to sales ratio

153
Q

causes on fishbone diagram

A

method
manpower
machinery
(NOT manufacturing overhead- that is an allocated cost)

154
Q

at capacity, minimum price for a special order =

A

variable costs per unit + contribution margin of next best alternative

155
Q

annuity due

A

BEG of period

156
Q

event identification occurs

A

AFTER the development of objectives

157
Q

PKI refers to

A

system and processes used to issue and manage asymmetric keys and digital certificates

158
Q

Capital budgeting decisions include

A
  • Selecting among long-term investment alternatives.
  • Making investments that produce returns over a long period of time
  • Financing large expenditures
159
Q

The competitive model of supply and demand predicts that a surplus can only arise if there is a

A

Minimum price above the equilibrium price

160
Q

Vertical linkage analysis

A

nderstanding the activities of the suppliers and buyers of the product and determining where value can be created external to the firm’s operation

161
Q

peak of a business cycle

A
  • highest point of economic activity
  • firms are likely to face capacity constraints and labor shortages, which will put upward pressure on the overall price level
162
Q

project manager is responsible for

A

project administration on a day-to-day basis including identifying and managing internal and external stakeholder expectations

163
Q

Code of Ethics issued as part of the IPPF applies to

A

both individuals and entities that provide internal auditing services

164
Q

effective annual interest rate

A

(1 + std rate)/(#of periods ^ compounding periods)

165
Q

high low method

A
  1. (change in units high-low)/(change in cost) = unit price
  2. costs - (variable costs)= fixed costs
  3. combine based on units projected

CPA- BEC (13 decks)

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