Worksheetstrust
Total questions: 119
Worksheet time: 3570secs
Actual costing method calculates product costs using:
Actual costs on direct raw materials, direct labor, and overhead
Estimated costs on direct raw materials and direct labor, and actual costs on overhead
Actual costs on direct raw materials and direct labor, and estimated costs on overhead
Estimated costs on direct raw materials, direct labor, and overhead
For compilation, an accountant does the following?
1. Obtain an understanding of internal controls (yes) 2. Perform control testing (yes) 3. Perform transaction testing (no)
1. Obtain an understanding of internal controls (no) 2. Perform control testing (yes) 3. Perform transaction testing (yes)
1. Obtain an understanding of internal controls (no) 2. Perform control testing (no) 3. Perform transaction testing (no)
1. Obtain an understanding of internal controls (yes) 2. Perform control testing (no) 3.
Which of the following cycles does not affect cash in the bank?
Acquisition and payment.
Inventory and warehousing
Payroll and personnel cycles
Capital cycle
Which of the following is an effective internal control used to verify that production department employees actually punch time cards on the time clock?
Internal auditors must perform random payroll distribution observations
There is one person responsible for maintaining attendance records for non-salaried employees
Time cards must be carefully examined by individuals distributing payroll envelopes to employees
Daily reports showing time charged to jobs must be approved by supervisors and compared to the hours recorded on employees' time cards
Auditors should be aware of the client's capitalization policy to determine if the purchase:
I. Is recorded in accordance with accounting standards
II. Is treated consistently with previous years
III. Is necessary
II only
I only
III only
I and II
When reporting cash on the balance sheet, a company:
Shows each separate bank account.
Includes all restricted cash amounts.
Combines cash and cash equivalents.
Combines cash with accounts receivable
A common stock repurchase:
Decreases the number of issued common shares and reduces the common stock balance.
Decreases the number of issued common shares.
Generates a gain or loss to be reported on the income statement.
Reduces the common stock balance.
Which of the following intangible assets has an indefinite useful life?
Franchise
Copyright
Patent
Goodwill
Which of the following options does not apply to non-statistical sampling?
often referred to as judgmental sampling
mathematical rules apply that allow auditors to measure sampling risk
reaching conclusions about the population in judgmental samples
auditors select items for sampling that they believe will provide a lot of information
auditors select items for sampling that they believe will provide a lot of information
Prime costs cannot be easily allocated to products and services
Accurate actual cost information cannot be obtained in a timely manner
Difficult to obtain actual cost information for conversion costs
Difficult to obtain actual cost information for prime costs
One concept of costs is ____ which is the result of past decisions and cannot be changed by current or future actions.
Opportunity costs
Differential costs
Sunk costs
Avoidable costs
In divisional work reports, segment margin is equal to:
sales minus variable costs
sales minus cost of goods sold
sales minus variable costs and direct fixed costs
sales minus variable costs and indirect fixed costs
Cost Volume Profit (CVP) analysis can be used for all of the following, except:
CVP analysis can show the impact of new competitors on the profitability of the company's products
CVP analysis allows management to test the impact of price increases on profitability
CVP analysis can tell management how many units must be sold to achieve the break-even point.
All answers can be achieved with CVP analysis.
In the classification of quality costs, the costs of departments receiving customer complaints are included in
Internal failure costs
Prevention costs
Appraisal costs
External failure costs
Value stream reflects
a set of activities performed to create added value for customers
all activities performed
only non-value-added activities
only activities directly related to specific products
If a vertical analysis of the balance sheet shows that current assets have increased from 42% to 56%, when total assets are the basis for analysis, it can be concluded that:
the percentage of current assets to total assets has increased.
the total amount of assets has increased.
the total amount of assets has decreased.
the total amount of current assets has increased.
A business offers credit terms of 1/15, n/30. These terms indicate that:
the total amount due must be paid within 15 days
the buyer can take a 1% discount if the invoice is paid within 15 days or 30 days
a 1% discount can be taken if the invoice is paid within 15 days
there is a discount offered for early payment
If a company reports a net loss, then:
it may still have an increase in cash
it cannot pay cash dividends
it cannot obtain loans
it cannot obtain loans
According to Anthony and Govindarajan, companies have responsibilities to:
Suppliers and Customers
Stockholders
Stakeholders
Shareholders
Hedging is used to
manage all foreign currency exposures
do all of the above
ensure profits and losses in foreign currency exchanges
manage economic risks
In terms of product quality, the measure of how well a product meets specifications is an attribute of:
Conformity
Durability
Fitness for use
Reliability
Which of the following accounts is not included in the acquisition transaction group?
Inventory
Purchase discounts
Prepaid expenses
Accounts payable
Which of the following statements about fixed asset auditing is the least accurate?
Failure to record the acquisition of fixed assets affects the profit and loss statement until the asset is fully depreciated.
The primary accounting records for manufacturing equipment and other fixed assets are generally the fixed asset master file.
The emphasis when auditing fixed assets is on verifying the acquisition of assets in the current period.
Manufacturing equipment and current assets are usually audited in the same way regardless of the activities in those accounts.
A list of balances in the accounts receivable ledger on the balance sheet date, based on the balance amounts and the length of time outstanding of the receivable components, is called:
customer list
schedule of accounts receivable
aged trial balance
accounts receivable ledger
The three sections contained in the statement of cash flows are presented in the following order:
financing, operations, and investment.
financing, investment, and operations.
operations, investment, and financing.
investment, operations, and financing.
A partial financial productivity measure uses _____ to measure inputs and outputs.
Revenue
Physical quantity
Costs
Monetary
One dimension of quality is the length of time a product can function properly, which is an attribute of:
Fitness for use
Durability
Reliability
Conformity
Variable costing income typically exceeds absorption costing income when
there is no correct answer
production exceeds sales
production and sales are equal
sales exceed production
The price variance for raw materials is calculated using the formula:
(actual price- standard price) x standard quantity
(actual price- standard price) x actual quantity
(actual quantity- standard quantity) x actual price
(actual quantity- standard quantity) x standard price
The increase in equity resulting from delivering goods or services to customers is:
liability
expense
asset
revenue
Which of the following is not explicitly stated in the standard auditor's report?
The audit is conducted in accordance with generally accepted accounting principles
The financial statements are the responsibility of management
The audit includes assessing the accounting estimates used by management
The auditor believes that the audit provides a sufficient basis for expressing an opinion
If a company capitalizes costs that should be expenses, then:
assets will be overstated.
assets will be overstated.
expenses will be overstated in the year of the error.
expenses will be overstated in the year of the error.
expenses will be overstated in the year of the error.
Service Revenue
Common Stock
Wages Payable
Advertising Expense
The method that starts with net income and adjusts it for items that affect net income but do not affect cash is called:
gross profit method.
indirect method.
direct method.
market or lower of cost method
The statement "We have nothing to draw attention to that would indicate that this statement is not fairly presented" represents what type of opinion?
negative confirmation
negative assurance
no opinion given
shared opinion
The following are parts of internal analysis, except:
Technology know-how
Logistics know-how
Customer know-how
Distribution know-how
If the perpetual inventory master file shows a lower inventory amount than the physical count, a possible explanation for the difference may be the omission of:
purchase discounts
purchases
sales discounts
sales
Sales should be recorded as soon as possible, if:
credit is approved and verified that there is enough inventory to fulfill the order.
orders are received and credit is approved.
orders are received.
shipment is made.
The following is an example of strategic formulation, except:
Changing the debt to equity ratio
Entering a new business.
Acquiring unrelated businesses
Expanding factories
Companies need to consider environmental costs. Activity costs used to determine whether products, processes, and other activities in the company have met environmental standards are called:
External environmental failure costs
Environmental detection costs
Environmental prevention costs
Internal environmental failure costs
In a manufacturing company, which department is often responsible for reviewing production reports?
accounts payable
production
purchasing
accounting
What should management accountants do in a global business environment?
Obtain good training and education and keep up with changes in the accounting field
Familiarize themselves with the accounting rules of the country where the company operates
Continuously monitor current trends in various business areas
Continuously monitor current trends in various business areas
Continuously monitor current trends in various business areas
(Fixed costs + Desired profit) / Contribution margin per unit
(Fixed costs + Desired profit) / Sales
(Fixed costs + Variable costs) / Contribution margin per unit
(Fixed costs + Variable costs) / Sales
Handling the receipt of ordered equipment is part of the cycle.
acquisition and payment
purchasing
inventory and warehousing
inventory
You are auditing the inventory account and are concerned about the possibility of overstated inventory. What is the most appropriate audit procedure to detect damaged inventory?
Observing the condition of inventory during physical counting.
Reconciling the physical inventory amount to the accounting records.
Reconciling the physical inventory amount to the accounting records.
Comparing the condition of inventory since the previous year's count to the current year's count.
The report on agreed-upon procedures is intended to be distributed to:
only involved parties, who will have the necessary knowledge about the procedures and the level of assurance generated from them.
only shareholders of the client
to parties desired by the client
only involved parties, who have knowledge about the procedures but not the level of assurance generated from them.
In bank reconciliation, items recorded by the bank but not yet recorded by the company include
outstanding checks.
deposits in transit.
accounts receivable collections by the bank.
both deposits in transit and outstanding checks.
The equity of an entity consists of two accounts, Joko's Equity and Budi's Equity. This indicates that the entity is in the form of?
sole proprietorship
corporation
partnership
non-profit organization
In completing an audit, management is asked to make a written statement that they are not aware of any undisclosed contingent liabilities. This statement will appear in:
management letter of representation
letter of inquiry
management letter.
letters testamentary
Which of the following audit evidence collection procedures would the auditor perform to obtain some assurance about the existence of inventory?
Confirmation of inventory in the general warehouse.
Written representation about inventory from management.
Observation of the physical inventory count.
Recalculation of the inventory extensions.
If one company owns more than 50% of the common stock of another company
the company whose stock is owned must be liquidated
there will be a parent-subsidiary relationship
there will be a partnership relationship
the equity method must be used to account for the investment
The exception rate for a sample is equal to:
the number of items in the population multiplied by the number of exceptions in the sample.
the number of exceptions in the population divided by the size of the population.
the number of exceptions in the population divided by the size of the sample.
the number of exceptions in the sample divided by the size of the sample.
Which of the following options is NOT a stage of the life-cycle cost commitment curve?
production
product planning
logistics
purchasing
Given the following data:
Current liabilities Rp450,000,000
Non-current liabilities Rp650,000,000
Shareholders' equity Rp500,000,000 In vertical analysis, current liabilities can be expressed as:
28%
356%
111%
356%
Asset misappropriation is usually committed by:
lower-level employees
company management
internal auditors
board members
In most manufacturing companies, the inventory and warehousing cycle begins with
receiving orders from customers
purchasing raw materials for customer orders
initiating production for customer orders
completing production for customer orders
Improving product and service quality will
Increase customer demand and reduce costs
Increase customer demand and increase costs
Decrease customer demand and increase costs
Decrease customer demand and reduce costs
Analyzing cash flow statements can help analysts determine the financial health of a company. Which of the signs below is NOT an indicator of a financially healthy company?
Company operations are the primary source of cash
Company operations are the main activities using cash
Company financing activities are not dominated by borrowing
Company investment activities involve more purchases than sales of long-term assets
If the auditor determines that subsequent events affecting the financial statements occurred after fieldwork was completed but before the auditor's report was issued, then on which dates can the auditor rely in the report?
1. Date of the last day of fieldwork only (no) 2. Date of the subsequent event only (yes) 3. Date on which the last day of fieldwork coincided with the date of the subsequent event (no)
1. Date of the last day of fieldwork only (yes) 2. Date of the subsequent event only (no) 3. Date on which the last day of fieldwork coincided with the date of the subsequent event (yes)
1. Date of the last day of fieldwork only (yes) 2. Date of the subsequent event only (yes) 3. Date on which the last day of fieldwork coincided with the date of the subsequent event (no)
1. Date of the last day of fieldwork only (no) 2. Date of the subsequent event only (no) 3. Date on which the last day of fieldwork coincided with the date of the subsequent event (yes)
In performance evaluation, variances indicate
Who is responsible for the variances
That actual performance is not in line with the plan
Causes of variances
Something that needs to be investigated
Which of the following reports summarizes the revenue, gains, expenses, and losses of an entity?
Balance sheet
Statement of retained earnings and operating statement
Cash flow statement and income statement
Income statement
The difference between total profit change and productivity-related profit change is
No correct answer
Price recovery component
Productivity ratio component
Quantity change component
Management control is
The process of deciding on strategy
The process of implementing strategy
The process of revising strategy
The process of implementing tasks
Sutra Bank lends Canton Furniture Company Rp100,000 on December 1. Canton Furniture Company signs a Rp100,000, 8%, 4-month note. The total cash paid at maturity is:
Rp106,000
Rp104,000
Rp108,000.
Rp104,000.
In vertical analysis
Determination of the base amount is required
Determination of the base amount is optional
Comparative financial statements are required
Comparative financial statements are optional
The following accounts arranged in order of liquidity are:
Accounts Receivable, Inventory, Cash and Cash Equivalents
Cash and Cash Equivalents, Marketable Securities, Accounts Receivable
Cash and Cash Equivalents, Accounts Receivable, Marketable Securities
Marketable Securities, Cash and Cash Equivalents, Accounts Receivable
Productivity is related to
Producing output efficiently
There is no correct answer
Producing output quickly
Producing the maximum possible output
All of the following accounts are reported as current liabilities, EXCEPT:
Sales tax payable
Accounts payable
Bonds payable
Unearned revenue
Events that have financial impacts on a business and can be reliably measured are called:
Expenses
Transactions
Assets
Journals
A multinational corporation is a company that
Manufactures goods in foreign trade zones
Exports finished goods to other countries
All of the above
Imports raw materials from other countries
The accounting method that records revenue when cash is received and records expenses when cash is paid is:
Accrual method
Cash method
Hybrid method
Accrual method
The standard cost of PT Luna is Rp200,000 and the allowable deviation is Rp20,000. The upper and lower control limits are
Rp220,000 and Rp180,000
Rp200,000 and Rp180,000
Rp220,000 and Rp200,000
Rp210,000 and Rp190,000
Output controls are not designed to ensure that the data generated by the computer is:
Complete
Accurate
Shared only with authorized personnel
Appropriately used by management
The cost incurred to determine whether the quality of products and services meets requirements is called
External failure cost
Appraisal cost
Prevention cost
Internal failure cost
Which of the following options describes the sequence of the continuous improvement cycle?
Act-plan-check-maintain
Plan-maintain-check-act
Plan-do-check-act
Plan-check-maintain-act
In the statement of cash flows, which of the following is NOT considered a financing activity?
Deferred income tax
Foreign currency effects on cash value
Payment of interest on long-term debt
Repayment of long-term debt
Environmental costs in environmental cost reports are presented as a total percentage of
Product costs
Sales
Operating costs
Total Environmental Costs
Petty cash funds are unlikely to be used to pay for which of the following items?
Small donations to local charities
Postage for mail
Monthly interest expenses
Office supplies
Operational productivity measurement uses _____ to measure input and output.
Dollars
Physical quantities
Revenue
Costs
Gross profit margin is calculated by dividing gross profit by:
Net sales
Net income
Cost of goods sold
Operating expenses
Company profitability is calculated by
Summing the profit of each value stream
Summing the profit of each value stream and then subtracting sustaining costs to obtain gross factory/company profit
Summing the profit of each value stream, subtracting sustaining costs, and then adjusting for changes in inventory to obtain gross factory/company profit
Summing the profit of each value stream and then adjusting for changes in inventory to obtain gross factory/company profit
Possible misstatements can arise from:
1) Calculation of sampling errors for cash account (No) 2) Differences in judgment between management and auditor regarding account balances (Yes) 3) Misstatement
1) Calculation of sampling errors for cash accounts (Yes) 2) Differences in considerations between management and auditors regarding account balances (No) 3) Projection of misstatement based on auditor tests on samples from a population (No)
1) Calculation of sampling errors for cash accounts (Yes) 2) Differences in considerations between management and auditors regarding account balances (Yes) 3) Projection of misstatement based on auditor tests on samples from a population (No)
1) Calculation of sampling errors for cash accounts (No) 2) Differences in considerations between management and auditors regarding account balances (No) 3) Projection of misstatement based on auditor tests on samples from a population (No)
________ is recorded as a long-term asset when purchased or developed, and its cost is allocated to expense through a process called depletion.
Franchise
Intangible asset
Trademark
Natural resource
Which of the following is most reliable for verifying accounts payable balances?
Bill of lading
Vendor statement
Confirmation
Invoice from the vendor
The following are ratios that assess a company's liquidity, EXCEPT:
Debt-to-asset ratio
Current ratio
Inventory turnover ratio
Acid-test ratio
There must be periodic physical counts by the client of inventory on hand
regardless of the client's inventory valuation method
when the client uses the lower cost or market method
when the client uses the LIFO method
when the client uses both the LIFO and FIFO methods
PT Tanah owns 500 common shares of PT Rumput. PT Rumput has 100,000 common shares outstanding. PT Rumput is a:
Investor
Parent company
Controlling company
Investee
Productivity ratio is used as a partial measure of operational productivity, calculated by the formula:
Input/Cost
Input/Output
Input/Sales
Output/Input
Which of the following statements is true about application controls?
Application controls relate to various aspects of the IT function including physical security and transaction processing across various cycles
Application controls relate to all aspects of the IT function
Application controls relate to various aspects of the IT function including software acquisition and transaction processing
Application controls relate to individual transaction processes
Corporations, as one form of business entity, provide the following benefits, except:
separation between ownership and management
sustainable existence
protection through government regulation
limited liability for owners
The costs associated with activities that occur after the disposal of contaminants and waste into the environment are referred to as
Environmental external failure costs
Environmental detection costs
Environmental internal failure costs
Environmental prevention costs
Based on the audit evidence collected and evaluated, the auditor decides to increase the level of control risk from the originally planned. To achieve an overall audit risk level substantially the same as the planned audit risk level, the auditor will:
increase the materiality level
reduce substantive testing
reduce detection risk
increase inherent risk
If ABC Corporation has net sales of Rp600,000 and cost of goods sold of Rp390,000, the gross profit percentage is
54%
25%
35%
65%
What is the method to calculate cost per unit?
By dividing total production costs by the number of units produced
By adding variable costs per unit to total fixed costs
By adding all variable costs per unit associated with the units produced
By dividing total fixed costs by the number of units produced
Short-term promissory notes payable are:
one of the accounts shown after long-term liabilities
one of the accounts shown in current liabilities
the result of subtracting notes receivable on the balance sheet
generally for a period of 6 to 8 months.
Audit standards ________ that the basis used to determine preliminary judgments about materiality is documented in the audit file.
allow
require
encourage
do not allow
In the balanced scorecard, ____ measures the outcomes of efforts in the past.
Objective measures
Lag measures
Financial measures
External measures
The process of allocating the cost of fixed assets as expenses during the period in which the assets are used is called:
amortization
allocation
disclosure
depreciation
PT Mobil Indonesia sells new cars. PT Mobil Indonesia is likely to use the ________ method for its ending inventory cost.
LIFO
weighted average
FIFO
specific identification/unit cost
When expressing an unqualified opinion, an auditor evaluating audit findings must be confident that:
Known misstatements are documented in management representation letters
Known misstatements are recognized and recorded by the client
Estimates of likely misstatements include sample errors
Estimates of known and likely misstatements are less than the materiality level
When an auditor seeks to understand the operation of an accounting system by tracing several transactions through the accounting system, the auditor is said to be:
performing tests of controls
conducting a walk-through
tracing
vouching
Velocity is the number of units
sold in a specific period of time
examined within a specific timeframe
that can be produced within a specific timeframe
delivered within a specific timeframe
Which of the following formulas would be used to calculate the spending variance related to variable overhead?
(actual hours- standard hours) x actual variable overhead rate
(actual variable overhead rate- standard variable overhead rate) x standard hours
(actual hours- standard hours) x standard variable overhead rate
(actual variable overhead rate- standard variable overhead rate) x actual hours
Total changes in a company's equity from all sources other than business owners are:
earnings per share
investment capitalization
comprehensive income
earnings quality
Non-depreciated fixed assets are:
land
furniture
patents
machinery
Accounting principles dictate that a company records warranty costs in the same period as the recognition of revenue from sales. The principle referred to is:
matching principle
consistency principle
going concern principle
conservatism principle
The statement of changes in equity will include all of the following transactions EXCEPT:
cumulative translation adjustments
gains from foreign exchange
Cash dividends declared by the board of directors
Treasury stock repurchased by the company
Bonds that have periodic installments due over a specified period are called
term bonds
call option bonds
serial bonds
convertible bonds
Which audit test involves physical examination and confirmation?
tests of controls
tests of balances
analytical procedures
tests of transactions
Which of the following statements is most accurate regarding internal controls involving segregation of duties?
Only employees responsible for recording should authorize transactions
Employees authorizing transactions should not have custody of related assets
Employees are allowed to open evidence of cash receipts and record those receipts
Employees should not have custody of assets either temporarily or permanently
Which of the following services provides the lowest level of assurance on financial statements?
Services that do not provide assurance on financial statements
Any service that provides a level of assurance on financial statements
Review
Audit
In the context of WebTrust attestation engagements, what assurance do public accountants provide that a company's website complies with Trust Services principles?
moderate
absolute
limited
reasonable
Audit and accounting issues are resolved by the "proof of cash" procedure through
reconciling book and bank balances
identifying cash transfers
adjusting account balances
determining month-end balances
The cost of the value stream product is calculated by
finding the sum of the unit costs of each product
dividing the total value stream cost in one period by the number of units shipped during that period
calculating the total cost of each product
calculating the total cost of each product and multiplying by the number of products
Financial statements that report cash receipts and cash payments classified according to the company's main activities in operations, investing, and financing are:
cash flow statements
balance sheets
statements of operations
profit and loss statements
Which of the following audit tests forms the basis for the auditor's report on internal controls over financial reporting?
Analytical procedures
Tests of controls
Tests of detail balances
Tests of transactions
Which of the following options is typically prepared prior to the preparation of the direct materials purchase budget?
Pro forma balance sheet
Cash budget
Pro forma income statement
Production budget
The proper segregation of duties for one function is illustrated by the following segregation of duties:
authorization, payment, and recording
authorization, execution, and payment
custody, execution, and reporting
authorization, recording, and custody
Equipment is acquired by issuing a promissory note of Rp57,000 and a down payment of Rp30,000. The cash flow statement will present:
Rp57,000 cash inflow in the financing activities section
Rp30,000 cash inflow in the operating activities section
Rp57,000 cash inflow in the investing activities section
Rp30,000 cash outflow in the investing activities section
