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NEW QUESTION 230
Which of the following is a disadvantage of selecting a commercial software package rather than developing an application internally?
- A. Inadequate technical support.
- B. Incompatibility with client/server technology.
- C. Employee resistance to change.
- D. Lack of flexibility.
Answer: D
NEW QUESTION 231
Evaluating performance is not done to:
- A. Motivate the employees.
- B. Determine which employees deserve salary increases.
- C. Determine the amount of nondiscriminatory benefits that each employee deserves.
- D. Assess the available human resources of the firm.
Answer: C
Explanation:
Evaluations reinforce accomplishments, help in assessing employee strengths and weaknesses, provide motivation, assist in employee development, permit the organization to assess its human resource needs, and serve as a basis for wage increases. FJon discriminatory benefits are given to everyone in the organization in equal amounts, regardless of title, pay, or achievement of objectives.
NEW QUESTION 232
An entity had cash receipts from sales of US $175,000 during year 2, of which US
$30,000 was unearned at the end of Year 2. At the end of Year 1, the company had US $40,000 of deferred revenue, all of which was earned in Year 2. The company's sales revenue for Year 2 would be:
- A. US $165,000
- B. US $175,000
- C. US $185,000
- D. US $145,000
Answer: C
Explanation:
The sales revenue earned in Year 2 equals Year 2 cash receipts, minus any receipts in Year 2 for which the revenue was deferred, plus the revenue earned from cash receipts in Year 1. or US $185,000$175,000 - $30,000 $40,000).
NEW QUESTION 233
Without prejudice to your answer to any other question, assume that cost of goods sold for the current year ended December 31 is 2,000,000. Inventory turnover on total inventory for the entity would be:
- A. 2.04 times
- B. 4.82 times
- C. 4.08 times
- D. 3.54 times
Answer: C
Explanation:
Inventory turnover is the ratio of cost of goods sold to the average inventory balance. The total average inventory is 490,000 [(90,000 BFG + 105,000 BRM + 220,000 BWIP + 260,000 EFG + 130.000 ERM + 175.000 EWIP) - 2]. Hence, total inventory turnover is 4.08 times 2,000,000 assumed CGS 1 490,000 average total inventory).
NEW QUESTION 234
The bullwhip, or whiplash, effect on inventories begins when retailers face uncertain demand from consumers caused by randomness in buying habits. It can be avoided by:
- A. The need to purchase or manufacture goods in cost-efficient batches.
- B. Changes in price that may encourage purchases in anticipation of future increases.
- C. Shortages that may lead to rationing by suppliers or manufacturers and hoarding by manufacturers or retailers.
- D. Sharing of information and coordination among the organizations in the supply chain.
Answer: D
Explanation:
Sharing information about sales, inventory, pricing, advertising campaigns, and sales forecasts by all functions and organizations in the supply chain moderates demand uncertainty for all parties. The desired results are a) minimization of inventories held by suppliers, manufacturers, and retailers; b) avoidance of stackouts; c) fewer rush orders; and d) production as needed by retailers.
NEW QUESTION 235
Which of the following e-commerce audit protocol items relates to the area of fraud?
- A. Denial of orders placed or received, goods received, or payments made.
- B. Segregation of duties.
- C. Examination of service level agreements between buyer, supplier, and certification authority.
- D. Inadequacies in interfacing between e-commerce and financial management systems.
Answer: A
Explanation:
With regard to the e-commerce audit protocol in the area of fraud, the internal auditor should be alert for the following conditions:
Unauthorized movement of money e.g., transfers to jurisdictions where the recovery of funds would be difficult).
Duplication of payments.
Denial of orders placed or received, goods received, or payments made.
Exception reports and procedures, and effectiveness of the follow up.
Digital signatures: Are they used for all transactions Who authorizes them Who has access to them Protections against viruses and hacking activities history file use of tools).
Access rights Are they reviewed regularly Are they promptly revised when staff members are changed?
History of interception of transactions by unauthorized persons.
NEW QUESTION 236
A company updates its accounts receivable master file weekly and retains the master files and corresponding update transactions for the most recent 2-week period.
The purpose of this practice is to
- A. Validate groups of update transactions for each version.
- B. Verify run-to-run control totals for receivables.
- C. Match internal labels to avoid writing on the wrong volume.
- D. Permit reconstruction of the master file if needed.
Answer: D
Explanation:
The grandfather-father-son approach normally employs magnetic tapes to furnish backup in a batch processing system. The procedure involves creation and retention of three generations of master files so that lost or destroyed data may be regenerated from the remaining master files and transaction data. In this case, a master file the grandfather) and the first week's transactions are used to generate a second master file (the father). This file and the second week's transactions are the basis for the current master file the son). Online systems employ rollback and recovery procedures. i.e., the master file is periodically dumped onto a storage medium. Reconstruction is then possible using the backup copy and the transactions lord.
NEW QUESTION 237
Which of the following is an example of a phishing attack?
- A. An employee receives an email that appears to be from the organization's bank, though it is not. The employee replies to the email and sends the requested confidential information.
- B. An organization's systems have been compromised by malicious software. The software locks the organization's operating system until d ransom is paid.
- C. An organization's communication systems have been intercepted. A communication session is controlled by an unauthorized third party.
- D. An organization's website has been hacked. The hacker added political content that is not consistent with the organization's views.
Answer: A
NEW QUESTION 238
For a multinational organization, which of the following is a disadvantage of an ethnocentric staffing policy?
1. It significantly raises compensation and staffing costs.
2. It produces resentment among the organization's employees in host countries.
3. It limits career mobility for parent-country nationals.
4. It can lead to cultural myopia.
- A. 1, 2, and 3 only
- B. 1, 2, and 4 only
- C. 2 and 3 only
- D. 1 and 4 only
Answer: B
NEW QUESTION 239
Dale has 20 days to complete production of an order for an important customer. The customer wants 96 units of product that may be painted either red or white. The red units can be produced at a rate of 4 per day. The white units, because of a different quality of paint, can be produced at a rate of 7 per day. The materials for the red units cost US $80 each, while the white units cost US $120 each. Dale wants to keep costs at a minimum. What is the constraint that expresses the number of units to be produced?
- A. R+W=20
- B. (R/4) + (W+7) 20
- C. 4R + 7W = 20
- D. 4R + 7W = 96
Answer: B
Explanation:
The constraint function that expresses the number of units to be produced is R + W = 96, but that is not one of the answer choices. Another constraint is that the total quantities of red (R) and white (W) units must be produced in 20 or fewer days at a rate of 4 red units per day and 7 white units per day. Thus, the time constraint is (R / 4) + (W + 7) 20.
NEW QUESTION 240
The EOQ (economic order quantity) model calculates the cost-minimizing quantity of a product to order, based on a constant annual demand, carrying costs per unit per annum, and cost per order. For example, the EOQ is approximately 447 units if the annual demand is 10,000 units, carrying costs are US $1 per item per annum, and the cost of placing an order is US $10. What will the EOQ be if the demand falls to 5,000 units per annum and the carrying and ordering costs remain at US $1 and US $10, respectively?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: C
Explanation:
The EOQ formula is:
NEW QUESTION 241
A company has sales of US $500,000, variable costs of US $300,000 and pretax profit of US $150,000. If the company increased the sales price per unit by 10%, reduced fixed costs by 20%, and left variable cost per unit unchanged, what would be the new breakeven point in sales dollars?
- A. US $88,000
- B. U S $125,000
- C. U S $110,000
- D. US $100,000
Answer: A
Explanation:
The breakeven point in sales dollars is equal to the sum of fixed cost plus any desired pretax profit, divided by contribution margin ratio [ sales -variable costs) - sales]. Fixed cost was US $50,000 $500,000 sales $300,000 VC - $150,000 pretax profit). Given the increase in sales of 10% and decrease in fixed costs of 20%. the breakeven point in sales is US $88,000.
A company manufactures and sells a single product It takes two machine hours to produce one unit. Annual sales are expected to be 75.000 units. Annual production capacity is
200.000 machine hours. Expected selling price is US $10 per unit. Cost data for manufacturing and selling the product are as follows:
NEW QUESTION 242
Organizations mat adopt just-in-time purchasing systems often experience which of the following?
- A. A slight increase in carrying costs.
- B. An increase in the number of suitable suppliers
- C. A greater need for linkage with a vendor s computerized order entry system.
- D. A greater need for inspection of goods as the goods arrive.
Answer: C
NEW QUESTION 243
Which of the following statements is true regarding an organization's servers?
- A. Servers enforce access controls between networks transmitting data on the information system
- B. Servers manage the interconnectivity of system hardware devices in the information system.
- C. Servers optimize data processing by sharing it with other computers on the information system
- D. Servers manage the data stored in databases residing on the information system.
Answer: B
NEW QUESTION 244
The efficient markets theory implies that securities prices are:
- A. Not the best benchmark for corporate financial decisions
- B. Not a good estimate of future cash flows.
- C. Fair and a reflection of all publicly available information.
- D. Always less than their fair value.
Answer: C
Explanation:
The efficient markets theory proposes that the market is continuously adjusting to new information and acting to correct pricing errors.
NEW QUESTION 245
When management uses the absorption costing approach, fixed manufacturing overhead costs are classified as which of the following types of costs?
- A. Direct product costs
- B. Direct period costs
- C. Indirect product costs
- D. Indirect period costs.
Answer: A
NEW QUESTION 246
An organization's computer system should have an intrusion detection system IDS if it has external connections An AIDs
- A. Must monitor every call on the system as it occurs.
- B. Uses only behavior-based detection.
- C. May examine only packets with certain signatures.
- D. Uses only knowledge-based detection.
Answer: C
Explanation:
A network IDS works by using sensors to examine packets traveling on the network. Each sensor monitors only the segment of the network to which it is attached. A packet is examined if it matches a signature. String signatures certain strings of text) are potential signs of attack. Port signatures alert the IDS that a point subject to frequent intrusion attempts may be under attack. A header signature is a .I suspicious combination in a packet header.
NEW QUESTION 247
An audit manager has just returned from an executive training program and has suggested that the audit department develop a mathematical model to help identify factors that may be causing changes in the cost of production. According to the manager, the model should recognize that the company currently has three separate production (cost) centers.
Which of the following approaches would best provide the analysis suggested by the audit manager?
- A. Develop a classical variables sampling estimate of cost of production per department, with the sample stratified by the dollar value of each product produced.
- B. Develop a 3-year ratio analysis of the cost of production compared to the cost of raw inventory across the three departments.
- C. Develop a linear regression analysis relating the cost of production to the cost of goods sold.
- D. Develop a multiple regression analysis of production costs, including such variables as raw material inventory costs, number of employees in the department, and overtime pay.
Answer: D
Explanation:
Regression analysis extends correlation to find an equation for the linear relationship among variables. The behavior of a dependent variable, such as cost of production, is explained in terms of one or more independent variables (for example, raw material costs, employees, overtime). Thus, multiple regression analysis determines functional relationships among quantitative variables.
NEW QUESTION 248
Which of the following hiring procedures provides the most control over the accuracy of information submitted on an employment application?
- A. Applicants are required to submit unofficial copies of their transcripts along with the application as verification of their educational credentials.
- B. Applicants are required to sign a statement that the information on the application is true and correct as a confirmation of its truth.
- C. The hiring organization calls the last place of employment for each finalist to verify the employment length and position held.
- D. Letters of recommendation that attest to the applicants character must be mailed directly to the hiring organization rather than being submitted by the applicant.
Answer: C
Explanation:
Calling the last place of employment for candidates to verify information represents an independent verification of employment. The hiring organization is performing the verification process.
NEW QUESTION 249
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