Sept 18 Flashcards
What is not an attribute of a financial expert as required in the SEC rules regarding audit committees?
An understanding of GAAS
The COSO definition of internal control considers control activities a…
Component of internal control
Shipments would be an appropriate base for allocating indirect costs because there is a…
Cause and effect relationship between number of shipments and distributions costs
To measure controllable production inefficiencies, what is the best basis for flint to use in establishing standard hours allowed?
Engineering estimates based on attainable performance
When calculating manufacturing costs, Normal spoilage should…
Be debited to finished goods
The benefits of debt financing over equity financing are likely to be highest in which of the following situations? 2
1 high marginal tax rates
2 few no interest tax benefits
Excessive wages paid to family members are considered…
Discretionary items
When a discretionary adjustment is made for excessive wages paid to family members, the normalization adjustment would…
Need to be made to bring the amount paid within going market
Rates
A risk of using test library programs in emergency situations is…
Programs may not be further tested before being placed into production permanently
If one economy is booming and another is declining, what happens to the booming economy’s currency with respect to the declining economy?
Booming economy’s currency will decline
A firm with a higher degree of operating leverage when compared to the industry average implies that…
Firm’s profits are more sensitive to changes in sales volume
Access time in relation to computer processing is the amount of time it takes to…
Retrieve data from memory
Which of the following is correct in stating a similarity between firm’s ins perfectly competitive industry and a monopolistically competitive industry?
There are no significant barriers to entry in either market structure
Which of the following provides a spontaneous source of financing for the firm?
Accounts payable
Which of the following scenarios would encourage a company to use short term loans to retire its 10 year bonds that have 5 years until maturity?
Interest rates have declined over the last 5 years
