According to MA guidance on IT which of the following best describes a but recovery and restore processes have not been defined?

• A.Hot recovery plan
• B.Absence of recovery plan
• C.Warm recovery plan
• D.Cold recovery plan.

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An entity plans to tighten its credit policy. The new policy will decrease the average number of days in collection from 75 to 50 days and will reduce the ratio of credit sales to total revenue from 70% to 60%. The entity estimates that projected sales will be 5% less if the proposed new credit policy is implemented. If projected sales for the coming year are US $50 million, calculate the dollar impact on accounts receivable of this proposed change in credit policy. Assume a 360-day year.

• A.US $3,817,445 decrease
• B.US $6,500,000 decrease
• C.US $3,333,334 decrease
• D.US $18,749,778 increase

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The company uses a planning system that focuses first on the amount and timing of finished goods demanded and then determines the derived demand for raw material, components, and subassemblies at each of the prior stages of production. This system is referred to as:

• A.Economic order quantity.
• B.Material requirements planning.
• C.Linear programming.
• D.Just-in-time purchasing.

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Cost of goods sold in Year 2 was:

• A.US $147,000
• B.US $160,000
• C.US $167,000
• D.US $180,000

Correct Answer: A

Cost of goods sold equals beginning inventory, plus purchases, minus ending inventory. To determine cost of goods purchases must be calculated. Purchases equal US $167,000$49,000 ending accounts payable + $ 130,000 payments to suppliers - $62,000 beginning accounts payable). Thus, cost of goods sold equals US $ 147,000$120,000 beginning inventory + $167,000 purchases - $140,000 ending inventory).
Balance sheets on December 31, Year 1, and December 31, Year 2, are presented below

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Which of the following best describes the concept of relevant cost?

• A.A past cost that is the same among alternatives.
• B.A future cost that differs among alternatives.
• C.A past cost that differs among alternatives.
• D.A future cost that is the same among alternatives.

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