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Question 36

Which of the following statements describes the typical benefit of using a flat organizational structure for the internal audit activity, compared to a hierarchical structure?

A.A flat structure is more dynamic and offers more opportunities for advancement than a hierarchical structure.
B.A flat structure enables field auditors to report to and learn from senior auditors.
C.A flat structure results in lower operating and support costs than a hierarchical structure.
D.A flat structure results in a stable and very collaborative environment.

Question 37

The EOQ economic order quantity) model calculates the cost-minimizing quantity of a product to order, based an a constant annual demand, carrying costs per unit per annum, and cost per order. For example, the EOQ is approximately 447 units if the annual demand is 10,000 units, carrying costs are US $1 per item per annum, and the cost of placing an order is US $10. What will the EOQ be if the demand falls to 5,000 units per annum and the carrying and ordering costs remain at US $1 and US $10, respectively?

A.316
B.447
C.483
D.500

Question 38

To keep costs at a minimum and decrease the completion time by 1-1/2 days, Networks, Inc. should crash activity(ies):

A.AD and AB
B.DE
C.AD
D.AB and CE

Question 39

Activity scheduling information for the installation of a new computer system is given below

The earliest completion time for the project is:

A.A-C.
B.B-E.
C.A-D-E.
D.B-D-C.

Question 40

Which is the correct order of the following four steps in the accounting cycle?
Step 1 Prepare adjusting journal entries
Step 2 Take a post-closing trial balance
Step 3 Prepare an adjusted trial balance
Step 4 Prepare reversing entries

A.1, 3, 2, 4
B.4, 1, 3, 2
C.3, 1, 2, 4
D.1, 2, 3, 4

Correct Answer: A

The accounting cycle may be summarized as consisting of nine steps: record the period's transactions in the appropriate journals, post to the ledger(s) from the journals, prepare an unadjusted trial balance, prepare and post adjusting journal entries, prepare an adjusted trial balance, prepare the financial statements, prepare and post the closing entries take a post-closing trial balance and prepare reversing entries optional). On January 1, a new landscaping firm. Bandit Co. acquired a fleet of vehicles, all the necessary tools and equipment. and a parking and storage facility. It began operations immediately. It is now the end of the first year of operations, and the first set of year-end financial statements are being prepared. Several decisions have to be made regarding the appropriate accounting and reporting practices for this company. Relevant information for several of these items is described in the following list of transactions and events: At year-end. the parking and storage facility that was purchased for US $150,000 has a fair value of US $250,000. The physical flow of inventory is first in. first out, and the cost of materials has risen steadily over the year. To promote sales for the coming year. maintenance contracts were sold in December at very reasonable prices, provided that the customers paid cash. On April 1, the company arranged a US $100,000. 10% bank loan. Interest payments of US $5,000 are due on October 1 and April 1 of each year during the 5-year term of the loan. During the first year of operations, the company experienced a 5% bad debt rate on credit sales. None of the bad debts are expected to be recovered, given that 5% is the industry average level of bad debts. Total credit sales for the year were US $400,000. The year-end balance of accounts receivable includes uncollected overdue accounts of US $100,000. Half of the uncollected overdue amounts are estimated to be uncollectible.

Question 36

Question 37

Question 38

Question 39

Question 40

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