Free IIA IIA-CIA-Part3 Practice Exam with Questions & Answers | Set: 6

Average cost method

First-in, first-out (FIFO) method

Specific identification method

Activity-based costing method

Cost of sales and net income are understated

Cost of sales and net income are overstated

Cost of sales is understated and net income is overstated

Cost of sales is overstated and net income is understated

A just-in-time purchasing environment

A large volume of custom purchases

A variable volume sensitive to material cost

A currently inefficient purchasing process

Salary and status.

Responsibility and advancement.

Work conditions and security.

Peer relationships and personal life.

Providing fire detection and suppression equipment

Establishing a physical security policy and promoting it throughout the organization

Performing business continuity and disaster recovery planning

Keeping an offsite backup of the organization’s critical data

Management by objectives is most helpful in organizations that have rapid changes

Management by objectives is most helpful in mechanistic organizations with rigidly defined tasks

Management by objectives helps organizations to keep employees motivated

Management by objectives helps organizations to distinguish clearly strategic goals from operational goals

It is particularly helpful to management when the organization is facing rapid change

It is a more successful approach when adopted by mechanistic organizations

It is more successful when goal-setting is performed not only by management, but by all team members, including lower-level staff

It is particularly successful in environments that are prone to having poor employer-employee relations

Board of directors.

Senior management.

Chief financial officer.

Accounting personnel.

Contribution margin is the amount remaining from sales revenue after fixed expenses have been deducted

Breakeven is the amount of units sold to cover variable costs

Breakeven occurs when the contribution margin covers fixed costs

Following breakeven, net operating income will increase by the excess of fixed costs less the variable costs per unit sold

To increase the ability to borrow additional funds from creditors

To reduce the organization’s free cash flow from operations

To improve the organization’s free cash flow from operations

To acquire the asset at the end of the lease period at a price lower than the fair market value