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Question 76

Which of the following are appropriate functions for an IT steering committee? 1.Assess the technical adequacy of standards for systems design and programming. 2.Continually monitor of the adequacy and accuracy of software and hardware in use. 3.Assess the effects of new technology on the organization`s IT operations. 4.Provide broad oversight of implementation, training, and operation of new systems.

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

Question 77

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 78

Which mindset promotes the most comprehensive risk management strategy?

A.Increase shareholder value.
B.Mitigate losses.
C.Improve operational efficiency.
D.Maximize market share.

Question 79

For a finance lease, the gross investment, lease payments receivable, recorded by the lesser is equal to the:

A.Present value of the minimum lease payments minus the unguaranteed residual value accruing to the lesser at the end of the lease term.
B.Lower of 90% of the present value of the minimum lease payments or the fair value of the leased asset.
C.Minimum lease payments plus the unguaranteed residual value accruing to the lesser at the end of the lease term
D.Difference between the present value of the minimum lease payments and the unearned finance income.

Question 80

In December Year 1 catalogs were printed for use in a special promotion in January Year
2. The catalogs were delivered by the printer on December 13. Year 1 with an invoice for
US $70,000 attached. Payment was made in January Year 2. The US $70.000 should be reported as a deferred cost at the December 31. Year I. balance sheet date because of the:

A.Matching principle.
B.Revenue recognition principle.
C.Reliability principle.
D.Cost principle

Question 76

Question 77

Question 78

Question 79

Question 80

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