While an operating budget is a key element in planning and control, it is not likely to:

• A.Establish a commitment of company resources.
• B.Set out long-range, strategic concepts.
• C.Integrate organizational activities.
• D.Provide subsidiary planning information.

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In reconciling profit on an accrual basis to net cash from operating activities, what adjustment is needed to profit because of an increase during the period in prepaid expenses and2) the periodic amortization of premium on bonds payable?

• A.Add Add
• B.Add Deduct
• C.Deduct Add
• D.Deduct Deduct

Correct Answer: D

An increase in prepaid expenses indicates that cash outlays for expenses exceeded the related expense incurred, thus, profit exceeded net cash from operating activities, and a deduction is needed in the reconciliation. Also, the amortization of premium on bonds payable causes a reduction of interest expense but does not increase cash; therefore, profit exceed net cash from operating activities, and a deduction is needed in the reconciliation. Balance sheets on December 31, Year 1, and December 31, Year 2, are presented below:

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Which of me following application controls is the most dependent on the password owner?

• A.Password lockout
• B.Password rotation
• C.Password aging
• D.Password selection

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Which of the following organization structures would most likely be able to cope with rapid changes and uncertainties?

• A.Tall structure
• B.Decentralized
• C.Departmentalized
• D.Centralized

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An airline should recognize revenue from airline tickets in the period when:

• A.Passenger reservations are booked.
• B.B Passenger reservations are confirmed.
• C.Tickets are issued
• D.Related flights occur

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