Seaport BUS C150 Quiz 1 – 15th Ed.

Seaport BUS C150 Quiz 1- 15th Ed.

  1. The utility of a product or service is its:
want-satisfying power.
re-usability.
function as a commodity.
design quality.

 

  1. The marketing philosophy summarized by the phrase “a high-quality product will sell itself” is characteristic of the _____ era.
production
sales
marketing
relationship

 

  1. Approximately, what percentage of new product ventures end in failure?
Less than 10 percent
Between 25 percent and 40 percent
Between 50 percent and 65 percent
More than 80 percent

 

  1. A market in which there are more buyers for fewer goods and services is known as a:
seller?s market.
monopoly.
buyer?s market.
oligopoly.

 

  1. In the relationship era, firms focus on:
short-term relationships with suppliers.
long-term relationships with customers and suppliers.
short-term relationships with customers and suppliers.
short-term relationships with customers.

 

  1. The process of anticipating future events and conditions and determining the best way to achieve organizational objectives is known as:
researching.
planning.
controlling.
managing.

 

  1. Effective relationship marketing is based in part on the use of:
inside information about competitors.
databases to track customer preferences.
large advertising budgets.
information about changing economic conditions.

 

  1. A company’s plans that focus largely on current and near-future activities are referred to as _____ plans.
strategic
marketing
economic
tactical

 

  1. The planning process begins with:
writing the mission statement.
establishing organizational objectives.
formulating a marketing plan.
hiring a senior planner.

 

  1. What is the third step in the marketing planning process?
Obtaining necessary financing
Defining the organization?s mission and vision
Assessing strengths, weaknesses, and opportunities
Establishing organizational objectives

 

  1. A firm that works with the Food and Drug Administration to create new regulations is practicing:
marketing management.
environmental scanning.
marketing research.
environmental management.

 

  1. The goal of __________ is to analyze information and decide whether the identified trends represent significant opportunities or pose major threats to the company.
environmental scanning
environmental management
benchmarking
deregulation movement

 

  1. Pharmaceutical companies often get patents granting them the exclusive right to produce and market drug formulations they have developed. These patents are:
the result of non-compete agreements signed by pharmaceutical firms.
in violation of ethical principles on which business is based.
probably of little use because what one firm can patent, another can duplicate.
rewards for the millions that the firms invested in the research and development process.

 

  1. In the United States, four major music companies receive 80% of recording revenues. Such a market structure is termed as _____.
perfect competition
oligopoly
monopolistic
duopoly

 

  1. In which of the following industries are you most likely to encounter time-based competition?
Construction
Technology
Commodities
Mining

 

  1. Internet penetration is the:
bandwidth usage in comparison to other forms of digital technology.
depth of information covered on each subject available on the Internet.
percentage of Internet usage per individual for a given period.
percentage of a region?s population who use the Internet.

 

  1. References to the Internet’s global reach have to do with its:
ability to communicate inexpensively with consumers anywhere at any time.
capacity to overcome cultural barriers between nations.
power to insulate national economies from events occurring outside their borders.
ability to use a single language, English, to communicate with world markets.

 

  1. The most important goal of a marketing Web site is to:
give prospective employees the opportunity to apply for jobs online.
provide financial information to investors.
increase purchases by visitors.
communicate product information and build relationships with customers.

 

  1. An online store where customers can view and order merchandise is called a(n):
multiplay.
corporate Web site.
online community.
electronic storefront.

 

  1. Home Depot has a Web site service which allows the company to interact with its suppliers and share all types of data related to e-marketing. This innovative Web site can be considered:
a marketing Web site.
a private exchange.
a corporate Web site.
an electronic storefront.

 

  1. The broadest environmental determinant of consumer behavior is:
income or purchasing power.
educational background.
culture.
social status.

 

  1. The relative position of an individual within a group is called _____.
cultural assimilation
a role
status
the Asch phenomenon

 

  1. Reference groups have a greater impact on the purchasing decision when the:
consumer is already established as the opinion leader in the group.
purchase is hard to recognize or see by the group.
product is common.
purchase is unique and conspicuous.

 

  1. A person who is satisfying the most basic level of needs is operating at which level of Maslow’s Hierarchy of Needs?
Self-actualization
Esteem
Physiological
Belongingness

 

  1. Virtual reality is the:
transmission of marketing information in a three dimensional fashion.
least effective method for advertising high priced products.
only way that automobile dealerships can sell cars online.
perception that consumers can be better satisfied by offering online products.

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ACC 555 Final Exam

  1. The 10,000 accounts receivable of DEF Company have a total book value of $120,000. A CPA has selected and audited a sample of 100 accounts with a total book value of $1,000 and an audited value of $1,200.

Using the ratio estimation technique, the estimated total audited value of the population is:

  1. $100,000.
  2. $120,000.
  3. $140,000.
  4. $144,000

2 The 10,000 accounts receivable of DEF Company have a total book value of $120,000. A CPA has selected and audited a sample of 100 accounts with a total book value of $1,000 and an audited value of $1,200.

Using the mean-per-unit estimation technique, the estimated total audited value of the population is:

  1. $100,000.
  2. $120,000.
  3. $140,000.
  4. $144,000.

3 Using the mean-per-unit estimation method an auditor has properly calculated the estimated total audited value of a population as $200,000. Her sample included 200 of the population’s 40,000 items. She found that, in her sample the average audited value was $1 less than the average book value. What was the average audited value in the sample?

  1. $4.
  2. $5.
  3. $6.
  4. $10.

4 Using difference estimation, an auditor has taken a sample of 200 from a population’s 40,000 items; that population has a book value of $200,000. She found that in her sample the average audited value was $4.20, while the average book value was $5.20. What is the estimated total audited value of the population?

  1. $160,000.
  2. $161,538.
  3. $168,000.
  4. $200,000.
  5. Using ratio estimation, an auditor has taken a sample of 200 from a population’s 40,000 items; that population has a book value of $200,000. She found that in her sample the average audited value was $4.20, while the average book value was $5.20. What is the estimated total audited value of the population?
  6. $160,000.
  7. $161,538.
  8. $168,000.
  9. $200,000.
  10. Using mean-per-unit estimation, an auditor has taken a sample of 200 from a population’s 40,000 items; that population has a book value of $200,000. She found that in her sample the average audited value was $4.20, while the average book value was $5.20. What is the estimated total audited value of the population?
  11. $160,000.
  12. $161,538.
  13. $168,000.
  14. $200,000.
  15. If the projected misstatement in a nonstatistical sampling is $8,000, while the tolerable misstatement is $9,000, what would an auditor likely conclude?
  16. Since the projected misstatement is less than the tolerable misstatement, the account is not misstated.
  17. Since the projected misstatement is less than the tolerable misstatement, the account is misstated.
  18. The risk is high that the account is materially misstated.
  19. The analysis has been improperly performed since the projected misstatement is unequal to the tolerable misstatement.
  20. A dual purpose test simultaneously.
  21. Addresses two different accounts.
  22. Functions as a substantive test and as a test of controls.
  23. Functions as an analytical procedure and a substantive test.
  24. Substantiates an ending balance and the transactions making up the balance.
  25. The 1000 accounts receivable of Winco Company have a total book value of $20,000 (Average book value = $20). Bob Duffo, CPA, has selected and audited a sample of 50 accounts with the following mean values:
  26. Book value of $19.
  27. Audited value of $19.60.

What is the estimated total audited value using mean per unit sampling?

  1. $19,000.
  2. $19,600.
  3. $20,000.
  4. $20,632.
  5. The 1000 accounts receivable of Winco Company have a total book value of $20,000 (Average book value = $20). Bob Duffo, CPA, has selected and audited a sample of 50 accounts with the following mean values:
  6. Book value of $19.
  7. Audited value of $19.60.

What is the estimated total audited value using difference estimation sampling?

  1. $19,387.
  2. $19,400.
  3. $19,600.
  4. $20,600.
  5. Which of the following is correct concerning “window dressing” for cash?
  6. A segregation of duties within the cash function effectively eliminates its occurrence.
  7. It generally involves manipulation of inventory.
  8. It is illegal, and an audit is designed to provide reasonable assurance of its detection.
  9. Many forms of it require no action by the auditors.
  10. Which of the following statements is not correct?
  11. Cash is important to the audit process because of its vulnerability to misappropriation, despite the fact that the balance at the balance sheet date may be immaterial.
  12. Payroll cash account balances kept on an imprest basis are more easily controlled than others not so kept.
  13. Confirmation of cash should only be performed as of the balance statement date because the auditor expresses an opinion as of that date.
  14. Reviewing interbank transfers is important to the auditor because of the possibility that the client may be engaged in kiting.
  15. The auditors use a bank cutoff statement to compare:
  16. Deposits in transit on the year-end cash general ledger account to deposits in the cash receipts journal.
  17. Checks dated prior to year-end to the outstanding checks listed on the year-end bank reconciliation.
  18. Deposits listed on the cutoff statement to disbursements in the cash disbursements journal.
  19. Checks dated subsequent to year-end to the outstanding checks listed on the year-end bank statement.
  20. A practical and effective audit procedure for the detection of lapping is:
  21. Preparing an interbank transfer schedule.
  22. Comparing recorded cash receipts in detail against items making up the bank deposit as shown on duplicate deposit slips validated by the bank.
  23. Tracing recorded cash receipts to postings in customers’ ledger cards.
  24. Preparing a proof of cash.
  25. Which of the following is not a control that generally is established over cash transactions?
  26. Separating cash handling from recordkeeping.
  27. Centralizing the receipt of cash.
  28. Depositing each day’s receipts intact.
  29. Obtaining a receipt for every disbursement.
  30. Which of the following controls would be most likely to reduce the risk of diversion of customer receipts by a company’s employees?
  31. A bank lockbox system.
  32. Approval of all disbursements by an individual independent of cash receipts.
  33. Monthly bank cutoff statements.
  34. Prenumbered remittance advices.
  35. Which of the following is not a control that generally is established over cash receipts?
  36. To prevent abstraction of cash, a control listing of cash receipts should be prepared by mailroom personnel.
  37. To insure accurate posting, the accounts receivable clerk should post the customers’ receipts from customers’ checks.
  38. To insure accuracy of the accounts receivable records, the records should be reconciled monthly to the accounts receivable controlling account.
  39. To prevent theft of cash, receipts should be deposited daily.
  40. Tracing recorded sales transactions in the sales journal to the shipping documents (bills of lading) provides evidence about the:
  41. Completeness of recording of sales transactions.
  42. Occurrence of sales transactions.
  43. Billing of all sales transactions.
  44. Presentation of payables.
  45. By preparing a four-column bank reconciliation (“proof of cash”) for the last month of the year, an auditor will generally be able to detect:
  46. An unrecorded check written at the beginning of the month which was cashed during the period covered by the reconciliation.
  47. A cash sale which was not recorded on the books and was stolen by a bookkeeper.
  48. An embezzlement of unrecorded cash receipts on receivables before they had been deposited into the bank.
  49. A credit sale which has been recorded twice in the sales journal.
  50. In October, three months before year-end, the bookkeeper erroneously recorded the receipt of a one year bank loan with a debit to cash and a credit to miscellaneous revenue. Select the most effective method for detecting this type of error.
  51. Foot the cash receipts journal for October.
  52. Send a bank confirmation as of year-end.
  53. Prepare a bank reconciliation as of year-end.
  54. Prepare a bank transfer schedule as of year-end.
  55. Which of the following would an auditor most likely question included in calculation of the overhead rate for a company that manufactures a product?
  56. Factory supervisor salary.
  57. Indirect materials.
  58. Miscellaneous expense.
  59. Sales expense.
  60. A “bill and hold” scheme is most likely to include:
  61. Shipment of items to a customer beyond what the customer has ordered.
  62. Recording as sales items that the company retains as of year-end.
  63. Billing of items that are held by customers for future revenue production purposes.
  64. Selling items at substantial discounts near year-end.
  65. Which of the following is an auditor least likely to consider a departure from U.S. generally accepted accounting principles?
  66. Valuing inventory at cost.
  67. Including in inventory items that are consigned out to vendors, but not yet sold.
  68. Using standard cost as the measure of inventory cost.
  69. Including in inventory items shipped subsequent to year-end, but for which valid orders did exist at year-end.
  70. Which of the following is least likely to be accurate statement concerning characteristics of an audit?
  71. An analysis of inventory turnover addresses whether the proper method of determining inventory costs–as contrasted to market values–is being applied.
  72. Characteristics of the double entry bookkeeping system make it possible to test for overstated sales when tests of accounts receivable are being performed.
  73. The direction of tests for overstatement errors is generally directed from the recorded entry to source documents.
  74. Use of a perpetual rather than a periodic inventory system is likely to affect the nature of cutoff errors made at year-end.
  75. Which of the following is not a reason for the special significance attached by the auditors to the verification of inventories?
  76. The determination of inventory valuation directly affects net income.
  77. The existence of inventories is inherently difficult to substantiate.
  78. Special valuation problems often exist for inventories.
  79. Inventories are often the largest current asset of an enterprise.
  80. Which of the following is true about the auditors’ observation of the client’s physical inventory?
  81. The count must be made at year-end.
  82. The auditors should supervise the client’s personnel.
  83. The auditors’ observation addresses the existence assertion.
  84. The auditors should justify any omission of the observation in the audit report.
  85. In verifying debits to perpetual inventory records of a non-manufacturing firm, the auditor would be most interested in examining the:
  86. Purchases journal.
  87. Purchase requisitions.
  88. Purchase orders.
  89. Vendors’ invoices.
  90. In verifying credits to perpetual inventory records of a non-manufacturing firm, the auditor would be most interested in examining the:
  91. Shipping documents.
  92. Receiving reports.
  93. Purchase orders.
  94. Vendors’ invoices.
  95. The client’s physical count of inventories is lower than the inventory quantities in the perpetual records. This could be the result of a failure to record:
  96. Purchases.
  97. Purchase discounts.
  98. Sales.
  99. Sales discounts.
  100. An auditor has accounted for a sequence of inventory tags and is now going to trace information on a representative number of tags to the inventory summary sheets. Which assertion does this procedure relate to most directly?
  101. Completeness.
  102. Existence.
  103. Legality.
  104. Valuation.
  105. Which of the following is not explicitly included in an audit report for a nonpublic company?
  106. A statement that he auditor believes that his or her audit provides a reasonable basis for expressing negative assurance.
  107. A statement that the auditor’s responsibility is to express an opinion on the financial statements.
  108. A statement that the financial statements are the responsibility of management.
  109. A title with the word “independent.”
  110. When an auditor has concluded there is substantial doubt about an entity’s ability to continue as a going concern for a reasonable period of time beyond the current financial statement date (9/30/X1), the auditor’s responsibility includes:
  111. Preparing prospective financial information to verify whether management’s plans can be effectively implemented.
  112. Projecting conditions and events from one year prior to this year’s date (9/30/X0) to 9/30/X1.
  113. Issuing an adverse or negative assurance opinion, depending upon materiality, due to the possible effects on the financial statements.
  114. Considering the adequacy of disclosure about the entity’s possible inability to continue as a going concern.
  115. A basis for modification paragraph in the audit of the financial statements of a nonpublic company:
  116. Is only included with qualified, adverse or disclaimers of opinion.
  117. Is presented after the opinion paragraph.
  118. Has a section title: Emphasis-of-Matter.
  119. Must be included in all nonpublic company audit reports.
  120. After considering an entity’s negative trends and financial difficulties, an auditor has substantial doubt about the entity’s ability to continue as a going concern. The auditor’s considerations relating to management’s plans for dealing with the adverse effects of these conditions most likely would include management’s plans to:
  121. Increase current dividend distributions.
  122. Reduce existing lines of credit.
  123. Increase ownership equity.
  124. Purchase assets formerly leased.
  125. When an auditor does not confirm material accounts receivable, but is satisfied by the application of alternative auditing procedures, she normally should:
  126. Issue an unmodified opinion, but disclose elsewhere in the report this departure from a customary procedure.
  127. Issue an unmodified opinion with no reference to this omission.
  128. Issue a qualified opinion or a disclaimer, depending on the materiality of the receivables.
  129. Issue an adverse opinion.
  130. When financial statements are affected by a material departure from generally accepted accounting principles, the auditors should:
  131. Issue an unmodified opinion with a basis for modification paragraph.
  132. Withdraw from the engagement.
  133. Issue an “except for” qualification or an adverse opinion.
  134. Issue an “except for” qualification or a disclaimer of opinion.
  135. When an auditor of financial statements has substantial doubt about an entity’s ability to continue as a going concern, the auditor most likely would express a qualified opinion if
  136. The effects of the adverse financial conditions are likely to be negative.
  137. Information about the entity’s ability to continue as a going concern is not disclosed in the financial statements.
  138. Management has no plans to reduce or delay future expenditures.
  139. Negative trends and recurring operating losses appear to be irreversible.
  140. An auditor of financial statements believes that there is substantial doubt about an entity’s ability to continue as a going concern for a reasonable period of time. In evaluating the entity’s plans for dealing with the adverse effects of future conditions and events, the auditor most likely would consider, as a mitigating factor, the entity’s plans to
  141. Repurchase the entity’s stock at a price below its book value.
  142. Issue stock options to key executives.
  143. Lease rather than purchase operating facilities.
  144. Accelerate the due date of an existing mortgage.
  145. Which of the following procedures most likely would assist an auditor in identifying conditions and events that may indicate substantial doubt about an entity’s ability to continue as a going concern?
  146. Performing cutoff tests of sales transactions with customers with long-standing receivable balances.
  147. Evaluating the entity’s procedures for identifying and recording related party transactions.
  148. Inspecting title documents to verify whether any real property is pledged as collateral.
  149. Inquiring of the entity’s legal counsel about litigation, claims, and assessments.
  150. A scope restriction is least likely to result in a(an):
  151. Qualified opinion.
  152. Disclaimer of opinion.
  153. Adverse opinion.
  154. Standard unmodified opinion.
  155. When a client declines to disclose essential information in the financial statements or notes, the auditor of the financial statements should:
  156. Provide the information in the audit report, if practicable, and qualify the opinion because of a limitation on the scope of the audit.
  157. Provide the information in the audit report, if practicable, and qualify the opinion because of a departure from GAAP.
  158. Issue a disclaimer of opinion because the client has interfered with the auditor’s function of assessing the adequacy of disclosure.
  159. Issue an unmodified opinion, but inform the reader by including the omitted information in the audit report.
  160. CPA Firm A has performed most of the audit of Consolidated Company’s financial statements and qualifies as the group auditor. CPA Firm B did the remainder of the work. Firm A wishes to assume full responsibility for Firm B’s work. Which of the following statements is correct?
  161. Such assumption of responsibility violates the profession’s standards.
  162. In such circumstances, when appropriate requirements have been met, Firm A should issue a standard unmodified opinion on the financial statements.
  163. In such circumstances, when appropriate requirements have been met, Firm A should issue an unmodified opinion on the financial statements but should make appropriate reference to Firm B in the audit report.
  164. CPA firm A should normally qualify its audit report on the basis of the scope limitation involved when another CPA firm is involved.
  165. The Rotter Company changed accounting principles in 20X4 from those followed in 20X3. The auditor believes that the new principles are not in conformity with GAAP, and therefore that the 20X4 financial statements are misleading due to pervasive misstatements. The change (including its dollar effect) has been described in the notes to the 20X4 statements, which are being presented by themselves. Under these circumstances, in reporting on the 20X4 financial statements, the auditor should:
  166. Express an adverse opinion with a basis for modification paragraph disclosing the reason (the accounting change) for the opinion.
  167. Express an unmodified opinion with an emphasis-of-matter paragraph and disclose the accounting change from 20X3 and its effect on the financial statements.
  168. Disclaim an opinion and explain all of the reasons therefore.
  169. Express an adverse opinion regarding the 20X4 financial statements, without a basis for modification paragraph since the reason therefore since that reason will be included in the notes to the statements.
  170. Which of the following accounting changes requires an emphasis-of-matter paragraph regarding consistency in the auditors’ report?
  171. A change in the estimated useful lives of a class of fixed assets.
  172. A write-off of a patent because future benefits do not appear to exist.
  173. A change from the straight line method of depreciation to an accelerated method for a class of fixed assets.
  174. A change in calculating bad debt expense from one percent to two percent of credit sales.
  175. Which of the following is least likely to result in an emphasis-of-matter paragraph being added to an unmodified auditor’s report on the financial statements of a client that sells jewelry through a retail store?
  176. A decision by the auditor to emphasize that the client is a part of a larger organization.
  177. Reliance placed upon a specialist to evaluate the diamonds.
  178. A change from FIFO to specific identification accounting for inventory.
  179. A question as to whether the client will be able to remain a going concern.
  180. According to PCAOB standards, determining the allowance for doubtful accounts is referred to as a(n):
  181. Substantive transaction.
  182. Routine transaction.
  183. Nonroutine transaction.
  184. Accounting estimate transaction.
  185. The framework most likely to be used by the client in its internal control assessment is the:
  186. COSO internal control framework.
  187. COSO enterprise risk management framework.
  188. FASB 37 internal control definitional framework.
  189. AICPA internal control analysis manager.
  190. A material weakness that exists at year end will result in what type of audit report on internal control?
  191. Adverse.
  192. Qualified.
  193. Unqualified.
  194. Unqualified with explanatory language.
  195. Assume that an auditor is focusing on two weaknesses in internal control. Although neither is by itself a material weakness, the two significant deficiencies in combination represent a material weakness. The client effectively remediates one of them prior to year-end but does not have time to remediate the other prior to year-end. What type of audit report on internal control is appropriate?
  196. Adverse.
  197. Qualified.
  198. Unqualified.
  199. Unqualified with explanatory language.
  200. Which of the following is a weakness in internal control that allows a reasonable possibility that a significant (but less than material) misstatement may occur and not be detected?
  201. Control deficiency.
  202. Material weakness.
  203. Reportable material item.
  204. Significant deficiency.

 

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