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  1. Home
  2. IIA Certification
  3. IIA-CIA-Part3 Exam
  4. IIA.IIA-CIA-Part3.v2024-06-15.q282 Dumps
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Question 1

One advantage of a database management system DBMS) is:

Correct Answer: D
A fundamental characteristic of databases is that applications are independent of the database structure; when writing programs or designing applications to use the database. Only the name of the desired item is necessary. Programs can be developed for the user's specific needs without concern for data capture problems. Reference can be made to the items using the data manipulation language, after which the DBMS takes care of locating and retrieving the desired items. The physical or logical structure of the database can be completely altered without having to change any of the programs using the data items, only the schema requires alteration.
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Question 2

For an engineering department with a total quality management program, important elements of quality management include all of the following except:

Correct Answer: D
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Question 3

An organization that relies heavily on IT wants to contain the impact of potential business disruption to a period of approximately four to seven days. Which of the following business recovery strategies would most efficiently meet this organization's needs?

Correct Answer: B
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Question 4

General sales taxes tend to be regressive with respect to income because:

Correct Answer: A
A sales tax is regressive with respect to income even though the rate is the same regardless of the buyer's income. The reason is that a greater percentage of a low-income individual's income is exposed to the tax. A higher-income individual should be able to save more and therefore shield a greater percentage of his/her income from the tax.
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Question 5

A vendor sells specialty inks on consignment to a manufacturer of colored paper at a price of US $200 per barrel. Payment is made to the vendor in the month the manufacturer uses the barrels in production. The vendor records revenues when the barrels are shipped and makes no adjusting entries to record unearned revenues until the December 31 closing of the books. At the end of July the manufacturer had 40 barrels of ink on consignment.
During August, the vendor consigned 50 barrels and received payment for 30 barrels. Another five barrels were returned to the vendor by the manufacturer for credit. At the end of August, what is the amount of unearned revenue contained in the vendor's accounts receivable from the manufacturer?

Correct Answer: C
Under a consignment arrangement the consignor ships merchandise to the consignee who acts as agent for the consignor in selling the goods. The goods are in the physical possession of the consignee but remain the property of the consignor and are included in the consignor's inventory. Revenue and the related cost of goods sold from these consigned goods should only be recognized by the consignor when the merchandise is sold and delivered to the final customer. Accordingly, recognition occurs when notification is received that the consignee has sold the goods. Only then are the recognition criteria for a sale of goods satisfied: The enterprise has transferred the significant risks and rewards of ownership, the enterprise has neither continuing managerial involvement to an extent associated with ownership nor effective control over the goods, the amount can be reliably measured, it is probable that the economic benefits will flow to the enterprise, and transactional costs can be reliably measured. In this consignment arrangement. 30 barrels have been paid for, so the revenue is recognized for these barrels. The five barrels returned are not included in unearned revenue because they constitute a return of consigned goods. Accordingly, the amount of inappropriately recognized revenue is US $11,000 [(40 consigned + 50 consigned - 30 paid for- 5 returns) x $200].
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