2022 Realistic ActualPDF IIA-CIA-Part3 Dumps PDF - 100% Passing Guarantee
Free IIA IIA-CIA-Part3 Exam Questions and Answer
IIA IIA-CIA-Part3 Exam Syllabus Topics:
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NEW QUESTION 157
Countries X and Y both have freely floating exchange rate systems and an active trading relationship. If incomes [List A] in country X while all other factors remain unchanged, then the currency of country X will tend to [List B] relative to the currency of country Y.
- A. Rise
Remain constant
Rise
Depreciate - B. Remain constant
Appreciate - C. Fall
Depreciate - D. List A
List B
Answer: A
NEW QUESTION 158
In the determination of cost of goods sold, <List A> must be <List B> cash payments for goods along with other adjustments.
- A. Option D
- B. Option C
- C. Option B
- D. Option A
Answer: D
Explanation:
To convert from the cash basis cash payments) to the accrual basis cost of goods sold), an accounts payable must be added to cash payments for goods to determine net purchases.
Net purchases is then adjusted for the change in inventory to determine cost of goods sold.
NEW QUESTION 159
Which of the following does not provide operational assurance that a computer system is operating properly?
- A. Testing policy compliance.
- B. Performing a system audit.
- C. Conducting system monitoring.
- D. Making system changes.
Answer: D
NEW QUESTION 160
Which of the following channel structures have the best means of managing channel conflict?
I. Conventional
II. Vertical
III. Horizontal
IV. Multichannel
- A. II and III.
- B. I and II.
- C. I, III, and IV.
- D. II, III, and IV.
Answer: D
Explanation:
In vertical distribution systems, channel conflict is managed through common ownership, contractual relationships, or administration by one or a few dominant channel members. The joint nature of horizontal distribution efforts is the tool for managing channel conflict. In a multichannel system, because such a system is managed by a single entity, channel conflicts can be evaluated and managed internally. Conventional distribution systems consist of one or more independent producers, wholesalers, and retailers, each of which is a separate profit-maximizing business. The profit objective of each independent channel member may result in actions that are not profit-maximizing for the system as a whole, and the conventional distribution system offers no means for controlling channel conflict.
NEW QUESTION 161
To remove the effect of seasonal variation from a time series, original data should be:
- A. Multiplied by the seasonal factor.
- B. Reduced by the seasonal factor.
- C. Increased by the seasonal factor.
- D. Divided by the seasonal factor.
Answer: D
Explanation:
Seasonal variations are common in many businesses. To remove the effect of seasonal variation from a time series, the original data with the four trends) is divided by the
seasonal norm.
NEW QUESTION 162
Listed below are selected line items from the cost-of-quality report for Company B for
What is Company B's total prevention and appraisal cost for last month?
- A. US $1,940
- B. US $786
- C. US $2,665
- D. US $1,154
Answer: A
Explanation:
The costs of prevention and appraisal are conformance costs that serve as financial measures of internal performance. Prevention costs are incurred to prevent defective output. These costs include preventive maintenance, employee training, review of equipment design, and evaluation of suppliers. Appraisal costs are incurred to detect nonconforming output. They embrace such activities as statistical quality control programs, inspection, and testing. The equipment maintenance cost of US $1,154 is a prevention cost. The product testing cost of US $786 is an appraisal cost. Their sum is US $1,940.
NEW QUESTION 163
Under the income approach, gross domestic product GDP) is measured as:
- A. Wages + Rents + interest - Profits adjusted for net income earned abroad.
- B. Depreciation charges and indirect business taxes + Wages + Rents - Interest + Profits.
- C. Depreciation charges and indirect business taxes + Wages + Rents + Interest + Profits adjusted for net income earned abroad.
- D. Wages + Rents + interest + Profits.
Answer: C
Explanation:
GDP is the total value of goods and services produced within the boundaries of a country. It may be measured using an expenditures approach or an income approach. Under the income approach. GDP equals all income derived from the production of the year's output, with an adjustment for net income earned abroad a positive or negative amount in theory). Two types of nonincome charges or allocations must be added to incomes wages, rents. interest, and profits). Depreciation reflects the consumption of Ford capital during the period. It is the part of the year's receipts that must be allocated to replace the machinery, plant. etc. used up in the production of GDP. Indirect business taxes, such as sales. Excise, and property taxes, are treated by businesses as a cost of production and form part of the total price of goods and Thus. they are not paid as wages. rents, interest, and profits.
Accordingly, GDP may be measured as the sum of consumption of fixed capital, indirect business taxes, wages, rents, interest, and profits (proprietors' income. corporate taxes, dividends. and undistributed corporate profits), with an adjustment for net income earned abroad.
NEW QUESTION 164
Which of the following best describes the concept of relevant cost?
- A. A past cost that differs among alternatives.
- B. A future cost that is the same among alternatives.
- C. A past cost that is the same among alternatives.
- D. A future cost that differs among alternatives.
Answer: D
NEW QUESTION 165
Which of the following is an indication that a computer virus is present?
- A. Frequent power surges that harm computer equipment.
- B. Numerous copyright violations due to unauthorized use of purchased software.
- C. Unexplainable losses of or changes to data.
- D. Inadequate backup, recovery, and contingency plans.
Answer: C
Explanation:
The effects of computer viruses range from harmless messages to complete destruction of
all data within the system. A symptom of a virus would be the unexplained loss of or change to data.
NEW QUESTION 166
At an organization that uses a periodic inventory system, the accountant accidentally understated the organization's beginning inventory. How would the accountant's accident impact the income statement?
- A. There will be no impact on cost of goods sold and net income will be overstated.
- B. Cost of goods sold will be understated and net income will be overstated.
- C. Cost of goods sold will be overstated and net income will be understated.
- D. Cost of goods sold will be understated and there will be no impact on net income.
Answer: D
NEW QUESTION 167
In November of the current year, the vice-president of a local bank reviews the bank's mortgage portfolio prior to the December 31 year-end. The bank's largest client has mortgages on buildings in three cities. The client has incurred net losses for the past 3 years and is now experiencing serious cash flow problems. For the past 6 months, no payments have been made on any of the three mortgages. The vice-president reluctantly concludes that it is probable that the full amount of principal and interest will not be collected. What is the impact of this conclusion on the local bank's current year financial statements?
- A. No accounting or disclosure of a possible loss in value is necessary.
- B. The carrying amount of the mortgages should be reduced, with a charge to the income statement
- C. Contingency note disclosure of a possible impairment is required.
- D. The carrying amount of the mortgages should be reduced, with a charge directly to retained earnings.
Answer: B
Explanation:
A financial asset, such as a lender's mortgage receivable, is impaired if its carrying amount at the balance sheet date exceeds its estimated recoverable amount If it is probable that all amounts due on such a held-to-maturity investment a financial asset carried at amortized cost) cannot be collected, the loss should be included in profit or loss_ The loss equals the difference between the carrying amount and the present value of the expected future cash flows discounted at the original effective interest rate. The carrying amount of the asset should be reduced to its estimated recoverable amount directly or by crediting an allowance account.
NEW QUESTION 168
As organizations become more computer integrated, management is becoming increasingly concerned with the quality of access controls to the computer system. Which of the following provides the most accountability?
- A. Option I.
- B. Option II.
- C. Option III.
- D. Option IV.
Answer: A
Explanation:
Access should be limited to those whose activities necessitate access to the computer
system. Moreover, the degree of access allowed should be consistent with an individual's responsibilities. Restricting access to particular individuals rather than groups or departments clearly establishes specific accountability. Not everyone in a group will need access or the same degree of access. Thus, passwords assigned to individuals should be required for identification of users by the system. Furthermore, data should be restricted at the field level, not the workstation level. It may be possible to limit access to a workstation, but most workstations are connects -d t. larger mainframe or network databases. Thus, the security at the workstation level only would be insufficient.
NEW QUESTION 169
In an economic order quantity EOQ) model, both the costs per order and the holding costs are estimates. If those estimates are varied to determine how much the changes affect the
optimal EOQ, such an analysis would be called a:
- A. Forecasting model.
- B. Critical path method analysis.
- C. Decision analysis.
- D. Sensitivity analysis.
Answer: D
Explanation:
An economic order quantity EOQ) sensitivity analysis involves varying the holding carrying) costs per unit and/or the order costs to determine how much the changes affect the optimal EOQ.
NEW QUESTION 170
Which of the following is a major advantage of decentralized organizations, compared to centralized organizations?
- A. Decentralized organizations tend to be more responsive to market changes.
- B. Decentralized organizations streamline organizational structure.
- C. Decentralized organizations are more focused on organizational goals.
- D. Decentralized organizations tend to be less expensive to operate.
Answer: A
NEW QUESTION 171
Assume that each day an entity writes and receives checks totaling US $10,000. If it takes
5 days for the checks to clear and be deducted from the entity's account and only 4 days for the deposits to clear, what is the float?
- A. US $50,000
- B. US TO
- C. US $(10,000)
- D. US $10,000
Answer: D
Explanation:
The float period is the time between when a check is written and when it clears the payer's checking account. Check float results in an interest-free loan to the payer because of the delay between payment by check and its deduction from the bank account. If checks written require one more day to clear than checks received, the net float equals one day's receipts. The entity will have free use of the money for one day_ In this case, the amount is US $10,000.
NEW QUESTION 172
Which of the following price adjustment strategies encourages prompt payment?
- A. Seasonal discounts.
- B. Quantity discounts.
- C. Functional discounts.
- D. Cash discounts.
Answer: D
NEW QUESTION 173
What is the number of production runs per year of computer chairs that would minimize the sum of carrying and setup costs for the coming year?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: D
Explanation:
The EOQ minimizes the sum of carrying and setup costs. The EOQ is the amount at which carrying costs are equal to setup casts. Thus, plugging the data into the EOQ formula results in the following:
Thus, if each lot consists of 1,000 units, five production runs per year are needed to meet the 5,000-unit demand. At this level, setup costs will total US $5,000 5 x $1,000). Carrying costs will also equal US $5,000 10 per unit carrying cost average inventory of 500 units).
Accordingly, total costs are minimized at US $10,000. Jed Ryerson Computer Furniture, Inc. RCF) manufactures a line of office computer chairs. The annual demand for the chairs is estimated to be 5,000 units. The annual cost tic. hold one unit in inventory is US $10 per year, and the cost to initiate a production run is US $1,000. There are no computer chairs on hand, and RCF has scheduled four equal production runs of computer chairs for the coming year, the first of which is to be run immediately. RCF has 250 business days per year, sales occur uniformly throughout the year, and production start-up is within one day. RCF is considering using the following formula for determining the economic order quantity EOQ):
If: A = cast to initiate a production run per purchase order D = annual unit demand K = cost of carrying one unit per year
NEW QUESTION 174
The purpose of the economic order quantity model is to:
- A. Minimize the safety stock.
- B. Minimize the sum of the demand costs and the backlog costs.
- C. Minimize the sum of the order costs and the holding costs.
- D. Minimize the inventory quantities.
Answer: C
Explanation:
The purpose of the EOQ model is to minimize the sum of inventory order costs (or production setup) and holding (carrying) costs. The EOQ equals the square root of twice the annual demand multiplied by the variable cost per order, divided by the unit periodic holding cost.
NEW QUESTION 175
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