Review of ASK Exam

Owning a collection of investments (such as stocks from different industries, stocks from both small and large companies, bonds, and money market funds) in order to spread risk and have a safer overall investment

• Diversification

• Bond

• Mutual fund

• Money Market

Bear market

• Things seem to be calm

• Opportunity to buy shares in a sound, but undervalued company

• When everyone seems to be snapping up stocks and stock prices seem to keep raring upward

• A market to take advantage of

• Time when stocks seem to start at about the same level or lose ground

Bull market

• Things seem to be calm

• Opportunity to buy shares in a sound, but undervalued company

• When everyone seems to be snapping up stocks and stock prices seem to keep raring upward

• A market to take advantage of

• Time when stocks seem to start at about the same level or lose ground

Which of the following is any cost which cannot be capitalized into a prepaid expense, inventory, or fixed asset?

• Period cost

• Product cost

• Paradox cost

• Premium cost

Indirect costs cannot easily be traced to the cost object

• True

• False

Management accounting is designed for use by:

• Internal users

• Stockbrokers

• External users

• Clients

This answers the question, "How much is my asset worth right now?"

• net present value

• internal rate of return

• discount rate

• capital budgeting

This is the process of planning expenditures that generate cash flows expected to extend beyond one year.

• operating budgeting

• financial budgeting

• capital budgeting

• purchasing budgeting

Match the following

• a merchandising business that sells to those who use or consume the goods

• merchandising business

• goods that a business purchases to sell

• corporation

• a business that purchases and resells goods

• merchandise

• a business that buys and sells merchandise primarily to other merchandising businesses

• retail merchandising business

• an organization with the legal rights of a person which many persons or other corporations own

• wholesale merchandising business

An auditor has withdrawn from an audit engagement of a publicly held company after finding fraud that may materially affect the financial statements. The auditor should set forth the reasons and findings in correspondence with the 

• SEC
• Client's legal counsel
• Stock exchanges where the company's stock is traded
• Audit committee of the board of directors