Financial Management Process - CPA Auditing and Attestation (AUD)
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The amount of inventory that a company would tend to hold in safety stock would increase as the:
The amount of inventory that a company would tend to hold in safety stock would increase as the:
The amount of inventory that a company would tend to hold in stock would increase as the cost of carrying inventory decreases.
The amount of inventory that a company would tend to hold in stock would increase as the cost of carrying inventory decreases.
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When selecting suppliers before implementing a just-in-time (JIT) purchasing system, a company must take extreme care because a JIT purchasing system:
When selecting suppliers before implementing a just-in-time (JIT) purchasing system, a company must take extreme care because a JIT purchasing system:
JIT does not entail keeping a significant amount of inventory on hand. So, suppliers must be ready to provide products as soon as there is need.
JIT does not entail keeping a significant amount of inventory on hand. So, suppliers must be ready to provide products as soon as there is need.
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Which of the following characteristics is a primary benefit of a just-in-time inventory system for raw materials?
Which of the following characteristics is a primary benefit of a just-in-time inventory system for raw materials?
JIT is designed to minimize the amount of time inventory is kept on hand before it is utilized. Thus, it eliminates non value added operations.
JIT is designed to minimize the amount of time inventory is kept on hand before it is utilized. Thus, it eliminates non value added operations.
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What amount of annual sales must a company achieve to break even if the following information is given: Fixed Costs per month \$2,500, Unit Selling Price \$100, Variable cost as a percentage of sales 60%
What amount of annual sales must a company achieve to break even if the following information is given: Fixed Costs per month \$2,500, Unit Selling Price \$100, Variable cost as a percentage of sales 60%
\$2,500 * 12 months = \$30,000. 100% - 60% = 40% CM of sales. $30,000/40% = $75,000
\$2,500 * 12 months = \$30,000. 100% - 60% = 40% CM of sales. $30,000/40% = $75,000
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Which one of the following represents methods for converting A/R to cash?
Which one of the following represents methods for converting A/R to cash?
These are methods for converting A/R to cash.
These are methods for converting A/R to cash.
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The reorder point for a firm is the point at which the firm should reorder more inventory and it is calculated as:
The reorder point for a firm is the point at which the firm should reorder more inventory and it is calculated as:
The formula for reorder point needs to consider the amount of safety stock required by the firm, as well as the time it would take to acquire more inventory.
The formula for reorder point needs to consider the amount of safety stock required by the firm, as well as the time it would take to acquire more inventory.
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Which inventory costing method would a company that wishes to maximize profits in a period of rising prices use?
Which inventory costing method would a company that wishes to maximize profits in a period of rising prices use?
Using the FIFO method during a period of rising prices would account for the inventory that is the least expensive from the warehouse, thus maximizing profit.
Using the FIFO method during a period of rising prices would account for the inventory that is the least expensive from the warehouse, thus maximizing profit.
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Under US GAAP, during periods of inflation, a perpetual system would result in the same dollar amount of ending inventory as a periodic system under which of the following valuation methods?
Under US GAAP, during periods of inflation, a perpetual system would result in the same dollar amount of ending inventory as a periodic system under which of the following valuation methods?
Only under FIFO would the use of a perpetual system result in the same dollar amount of ending inventory as a periodic system.
Only under FIFO would the use of a perpetual system result in the same dollar amount of ending inventory as a periodic system.
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A corporation issues quarterly interim financial statements and uses the lower cost or market method to value its inventory in its annual financial statements. Which of the following statements is correct regarding how the corporation should value its inventory in its interim financial statements?
A corporation issues quarterly interim financial statements and uses the lower cost or market method to value its inventory in its annual financial statements. Which of the following statements is correct regarding how the corporation should value its inventory in its interim financial statements?
Using the IFRS lower of cost or market process would entail recognizing inventory losses during interim periods.
Using the IFRS lower of cost or market process would entail recognizing inventory losses during interim periods.
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What is the cost of ending inventory given the following factors? Beginning Inventory = \$5,000 Total Production Costs = \$60,000 Cost of Goods Sold = \$55,000 Direct Labor = \$40,000.
What is the cost of ending inventory given the following factors? Beginning Inventory = \$5,000 Total Production Costs = \$60,000 Cost of Goods Sold = \$55,000 Direct Labor = \$40,000.
$5,000 + $60,000 - $55,000 = $10,000
$5,000 + $60,000 - $55,000 = $10,000
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What was ABC company's cost of goods manufactured if cost of goods sold is \$43,000, ending finished goods inventory is \$21,000, beginning finished goods inventory is \$16,000 and net income is \$19,000.
What was ABC company's cost of goods manufactured if cost of goods sold is \$43,000, ending finished goods inventory is \$21,000, beginning finished goods inventory is \$16,000 and net income is \$19,000.
COGM = $43,000 + $21,000 - $16,000 = $48,000
COGM = $43,000 + $21,000 - $16,000 = $48,000
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The moving average method requires , while the weighted average method requires .
The moving average method requires , while the weighted average method requires .
Both the weighted average method and moving average methods are alternatives to LIFO and FIFO.
Both the weighted average method and moving average methods are alternatives to LIFO and FIFO.
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All of the following are valid reasons for a business to hold cash and marketable securities, except to:
All of the following are valid reasons for a business to hold cash and marketable securities, except to:
The three primary motives for holding cash are transaction demand, precautionary demand, and speculative demand.
The three primary motives for holding cash are transaction demand, precautionary demand, and speculative demand.
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A company has total costs of \$100,000, of which 40% is variable costs. What is the operating leverage?
A company has total costs of \$100,000, of which 40% is variable costs. What is the operating leverage?
Operating leverage is calculated as fixed costs divided by variable costs. If 40% of \$100,000 are variable costs, the remaining \$60,000 must be fixed costs. Thus, $60,000/$40,000=1.5.
Operating leverage is calculated as fixed costs divided by variable costs. If 40% of \$100,000 are variable costs, the remaining \$60,000 must be fixed costs. Thus, $60,000/$40,000=1.5.
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As a company becomes more conservative with respect to working capital policy, it would tend to have a(n):
As a company becomes more conservative with respect to working capital policy, it would tend to have a(n):
An increase in the ratio of current assets to non-current assets would be indicative of an increasingly conservative working capital policy.
An increase in the ratio of current assets to non-current assets would be indicative of an increasingly conservative working capital policy.
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Each of the following items is included when computing a firm's target cash conversion cycle, except the:
Each of the following items is included when computing a firm's target cash conversion cycle, except the:
The cash conversion cycle does not include the cash discount period. Cash discounts would be considered as a component of receivables collections and payables deferrals.
The cash conversion cycle does not include the cash discount period. Cash discounts would be considered as a component of receivables collections and payables deferrals.
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An increase in sales collections resulting from an increased cash discount for prompt payment would be expected to cause a:
An increase in sales collections resulting from an increased cash discount for prompt payment would be expected to cause a:
An increase in sales collections would decrease the cash conversion cycle.
An increase in sales collections would decrease the cash conversion cycle.
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The cash conversion cycle is the length of time from an initial expenditure for production to the date:
The cash conversion cycle is the length of time from an initial expenditure for production to the date:
This is the definition and purpose of the cash conversion cycle which exists to quantify a firm's ability to generate cash flow.
This is the definition and purpose of the cash conversion cycle which exists to quantify a firm's ability to generate cash flow.
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The amount of inventory that a company would tend to hold in safety stock would increase as the:
The amount of inventory that a company would tend to hold in safety stock would increase as the:
The amount of inventory that a company would tend to hold in stock would increase as the cost of carrying inventory decreases.
The amount of inventory that a company would tend to hold in stock would increase as the cost of carrying inventory decreases.
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When selecting suppliers before implementing a just-in-time (JIT) purchasing system, a company must take extreme care because a JIT purchasing system:
When selecting suppliers before implementing a just-in-time (JIT) purchasing system, a company must take extreme care because a JIT purchasing system:
JIT does not entail keeping a significant amount of inventory on hand. So, suppliers must be ready to provide products as soon as there is need.
JIT does not entail keeping a significant amount of inventory on hand. So, suppliers must be ready to provide products as soon as there is need.
Compare your answer with the correct one above