31 Dec components of an internal

Bus/475 Week 4 Knowledge Check

1.

A fast-food restaurant asks customers to evaluate the drive-thru

service as good, average, or poor. What level of data measurement

is this classification?

A. Nominal

B. Ordinal

C. Interval

D. Ratio

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2.

In order to determine the average amount spent in November on

Amazon.com a random sample of 144 Amazon accounts were

selected. The sample mean amount spent in November was $250

with a standard deviation of $25. Assuming that the population

standard deviation is unknown, what is a 95% confidence interval for

the population mean amount spent on Amazon.com in November?

A. ($245.88, $254.12)

B. ($247.47, $260.09)

C. ($250.64, $256.92)

D. ($251.34, $256.22)

3.

A shipment of 20 DVDs has arrived at a video rental store. Based on

past experience, the manager knows that 10% of all new DVDs sent

to the store have a visible defect. The manager tells you to begin

inspecting the new DVDs one at a time at random until you find the

first DVD that has a defect. If 10% of the DVDs have a visible defect

in the new shipment, what is the probability that the first DVD that

has a defect is the 3rd one that you inspect? (Round your answer to

3 decimal places.)

A. .081

B. .268

C. .089

D. .716

4

4.

An insurance agent has selected a sample of drivers that she insures

whose ages are in the range from 16â42 years old. For each driver,

she records the age of the driver and the dollar amount of claims that

the driver filed in the previous 12 months. A scatterplot showing the

dollar amount of claims as the response variable and the age as the

predictor shows a linear regression line with: y^=3710 â 55.4x. If the

age of a driver increases by 1 year, by how much and in what

direction would the dollar amount of claims be predicted to change

for the driver?

A. Increase by 55.4 dollars

B. Decrease by 55.4 dollars

C. Increase by 3710 dollars

D. Increase by 3,654.6 dollars

5.

A researcher claims that the proportion of employees who play video

games in the workplace is higher than it was 10 years ago. You

might be willing to reject the null hypothesis of no change with a =

0.10 or larger. The p-value for this test is 0.15. In this case the

researcher should

A. not reject the null hypothesis

B. reject the null hypothesis

continue with further testing because the

result is inconclusive

C.

change the testing from nonparametric to

parametric

D.

6.

The general plan of major actions through which a firm intends to

achieve is long-term objectives is called its

A. corporate plan

B. long-term goal

C. grand strategy

D. mission

7.

How valuable a low-cost leader’s cost advantage is depends on

A. whether it is easy or inexpensive for rivals

to copy the low-cost leader’s methods or

otherwise match its low costs

B. how easy it is for the low-cost leader to

gain the biggest market share

C. the aggressiveness with which the lowcost

leader pursues converting the cost

advantage into the absolute lowest

possible costs

D. the leader’s ability to combine the cost

advantage with a reputation for good

quality

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8.

Which of the following represent marketing capabilities at the growth

stage of industry evolution?

A. Skills in aggressively promoting products

to new markets and holding existing

markets and pricing flexibility

B. Ability to establish brand recognition, find

niche, reduce price, solidity strong

distribution relations and develop new

channels

C. Cost effective means of efficient access to

selected channels and markets and

strong customer loyalty or dependence

D. Resources or skills to create widespread

awareness and find acceptance from

customers; advantageous access to

distribution

9

9.

__________ is an organization structured around the idea of sharing

knowledge, seeking knowledge, and creating opportunities to create

new knowledge.

A. A global company

B. A modular organization

C. An ambidextrous organization

D. A learning organization

10.

Which of the following types of strategic control has a low degree of

formalization?

A. Special alert control

B. Implementation control

C. Strategic surveillance

D. Premise control

11.

Investors and creditors are particularly interested in this financial

statement because it tells them what is happening to the companyâs

most important resource?

A. Statement of cash flows

B. Income statement

C. Retained earnings statement

D. Balance sheet

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12.

The cash basis of accounting is prohibited under GAAP for the

following reason:

A. It divides the economic life of a business

into artificial time frames.

B. It violates the revenue recognition

principle and the expense recognition

principle.

C. It fails to provide for adjusting entries.

D. It records revenues only in the time period

in which they are received.

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13.

Use the following data to determine the total dollar amount of assets

to be classified as property, plant, and equipment. Eddy Auto

Supplies Balance Sheet December 31, 2014 Cash $84,000 Accounts

payable $110,000 Accounts receivable $80,000 Salaries and wages

payable $20,000 Inventory $140,000 Mortgage payable $180,000

Prepaid insurance $60,000 Total liabilities $310,000 Stock

investments $170,000 Land $190,000 Buildings $226,000 Common

stock $240,000 Less: Accumulated Retained earnings $500,000

depreciation ($40,000) $186,000 Total stockholdersâ equity

$740,000 Trademarks $140,000 Total liabilities and Total assets

$1,050,000 Stockholdersâ equity $1,050,000

A. $686,000

B. $516,000

C. $556,000

D. $376,000

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14.

The manager of Weiser is given a bonus based on net income

before taxes. The net income after taxes is $35,700 for FIFO and

$29,400 for LIFO. The tax rate is 30%. The bonus rate is 20%. How

much higher is the manager’s bonus if FIFO is adopted instead of

LIFO?

A. $9,000

B. $12,600

C. $1,800

D. $6,300

15

15.

The SarbanesâOxley Act of 2002 requires publicly traded U.S.

companies to take the following actions to defect and prevent fraud:

A. Adopt accrual basis of accounting,

maintain an adequate system of internal

controls, and create penalties for

noncompliance

B. Maintain an adequate system of internal

controls, ensure that internal controls are

reliable and effective, and hire

independent auditors to attest adequacy

of internal controls

C.Ensure internal controls are reliable and

effective, corporate executives must

independently review internal controls,

and submit all financial statements to the

Public Company Accounting Oversight

Board

D.Maintain an adequate system of internal

controls, provide additional training to

managers and accountants regarding

internal controls, and publish internal

controls on the companyâs public website

D.

16

16.

On July 1, 2014, Linden Company purchased the copyright to

Norman Computer Tutorials for $140,000. It is estimated that the

copyright will have a useful life of 5 years. The amount of

amortization expense recognized for the year 2014 would be

A. $28,000

B. $13,125

C. $25,900

D. $14,000

17.

ABC Corp. receives a 7-month interest-bearing promissory note in

the amount of $360,000 on February 1. The interest rate is 15%.

What is the total interest expense ABC Corp will record assuming

ABC makes all of its payments?

A. $54,000

B. $31,500

C. $4,500

D. $36,000

18

18.

Logan Corporation issues 50,000 shares of $50 par value preferred

stock for cash at $60 per share. The entry to record the transaction

will consist of a debit to cash for $3,000,000 and a credit or credits to

A. preferred stock of $3,000,000

B. preferred stock for $2,500,000 and paid-in

capital in excess of par valueâpreferred

stock for $500,000

C. preferred stock for $2,500,000 and

retained earnings for $500,000

D. paid-in capital from preferred stock for

$3,000,000

19

19.

Which of the following tools of analysis is used to evaluate financial

statement information by expressing financial statement data as a

percentage over a base amount?

A. Vertical analysis

B. Horizontal analysis

C. Ratio analysis

D. Industry averages

20.

The SarbanesâOxley Act of 2002 requires publically-traded U.S.

companies to provide great internal controls. The five primary

components of an internal control system include: a control

environment, risk assessment, information and communication,

monitoring, and

A. Establishment of responsibility

B. Segregation of duties

C. Control activities

D. Human resource controls