PTC3 Flashcards
Which one of the following is not a major approach for assigning a value to an entire going business? Market approach. Income approach. Cost approach. Asset approach
The cost approach is not a major approach to assigning value to an entire going business. The market approach, the income approach and the asset approach are the major approaches to assigning value to an entire going business.
Strobel Company has a large amount of variable rate financing due in one year. Management is concerned about the possibility of increases in short-term rates. Which of the following would be an effective way of hedging this risk?
Buy Treasury notes in the futures market.
Sell Treasury notes in the futures market.
Buy an option to purchase Treasury bonds.
Sell an option to purchase Treasury bonds.
Sell Treasury notes in the futures market.
Treasury notes for delivery in the future, the company can hedge increases in short-term interest rates. If interest rates increase, the value of the Treasury notes will decline, resulting in a gain to the company. If the hedge is effective, the gain will offset the increase in the company’s interest costs.
Economic markets that are characterized by monopolistic competition have all of the following characteristics except
(This question is CMA adapted)
One seller of the product.
Economies or diseconomies of scale.
Advertising.
Heterogeneous products.
One seller of the product.
Monopolistic competition is a market that has numerous sellers of similar but differentiated products.
Gus McCrae, an accountant at Lonesome Dove Cattle Ranch, builds a spreadsheet to track cow movements between locations. However, there are so few movements of cattle between locations that the spreadsheet is unhelpful. This problem illustrates which of the following issues? Inadequate scope and scalability Lack of strategic focus Lack of strategic engagement Digitization
Lack of strategic focus
Correct! This spreadsheet was not needed and should not have been created.
Multiple regression differs from simple regression in that it
Provides an estimated constant term.
Has more dependent variables.
Allows the computation of the coefficient of determination.
Has more independent variables.
Has more independent variables.
This Answer is Correct
This answer is correct. If only one independent variable exists, the analysis is known as simple regression. Multiple regression consists of a functional relationship with multiple independent variables.
In its first year of operations, Magna Manufacturers had the following costs when it produced 100,000 and sold 80,000 units of its only product:
Manufacturing costs Fixed $180,000
Variable 160,000
Selling and admin. costs Fixed 90,000
Variable 40,000
How much lower would Magna’s net income be if it used variable costing instead of full absorption costing?
$36,000
$54,000
$68,000
$94,000
The difference between net income under variable costing and net income under full absorption costing is $36,000, which is equal to 20,000 × $180,000/100,000. The difference between the two methods is the fixed cost of manufacturing in the ending inventory that would be capitalized under the full absorption costing method and expensed under the variable costing method.
In an accounting system, a header can be used to Help format a word processing document. Identify data records. Identify file folders. All of the above.
Identify data records
Headers are used to identify data records in an accounting system file.
Which of the following production processes best describes lean manufacturing?
Making a small number of a high variety of unique products with relatively low-skilled labor.
Making a large number of standardized products with highly skilled labor.
Making small batches of a high variety of unique products with cross-trained labor.
Making a large number of standardized products with relatively low-skilled labor.
Making small batches of a high variety of unique products with cross-trained labor.
Lean manufacturing is accurately described as using small batches of a high variety of unique products with highly skilled, cross-trained labor.
What type of computerized data processing system would be most appropriate for a company that is opening a new retail location? Batch processing. Real-time processing. Sequential-file processing. Direct-access processing.
Real-time processing.
This answer is correct because real-time processing is the best method for use by retail businesses.
A heat map used as a part of assessing risks plots the___________________ on the vertical axis against the___________________ on the horizontal axis.
likelihood rating; impact ratings
inherent risk; risk appetite
target residual risk, actual residual risk
internal control; inherent risk
likelihood rating; impact ratings
Correct! A heat map that is used in assessing the severity of risk plots the likelihood of the risk occurring on the vertical axis against the impact of the risk, should it occur, on the horizontal axis.
A production cycle of long duration would be expected to have which one of the following effects on working capital?
A higher working capital requirement than a shorter production cycle.
A lower working capital requirement than a shorter production cycle.
The same working capital requirement as a shorter production cycle.
No effect on the working capital requirement of the firm
A higher working capital requirement than a shorter production cycle.
As the term implies, the production cycle is the time needed to convert raw materials into finished goods. The longer the duration (time) of this cycle, the higher the level of working capital that would be expected to be devoted to the process. For example, more work-in-process inventory would be incurred in a long production cycle than would be involved in a short production cycle.
Which of the following types of networks is often utilized to process electronic data interchange (EDI) transactions?
Wide area network (WAN).
Secure electronic transactions (SET) network.
Value-added network (VAN).
Intranet.
Value-added network (VAN).
VANs often provide the additional security and addressing capabilities necessary to process EDI transactions.
