Question 1

Internal control systems:

	a.	are designed to allow financial misrepresentation
	b.	require that one person perform all aspects of a task
	c.	all of the answers are correct
	d.	are the responsibility of the external auditor
	e.	include anti-fraud measures

2 points

Question 2

Which of the following can be an opportunity cost?

	a.	Cost of idle capacity
	b.	Interest on cost of inventory
	c.	All of the answers are correct
	d.	The decline in an asset's value
	e.	Cost of underutilized labor

2 points

Question 3

An internal accounting system should:

	a.	provide management accounting information for decision-making
	b.	provide data for tax purposes
	c.	provide information to enable costs to be minimized
	d.	provide financial accounting data for external reporting purposes
	e.	All answers are correct

2 points

Question 4

Opportunity Costs:

	a.	may be found in financial statements (annual report)
	b.	must never be negative
	c.	reflect the benefit of the next best alternative
	d.	are pecuniary in nature
	e.	none of the answers are correct

2 points

Question 5

Economic Darwinism:

	a.	explains why marmots eat bears
	b.	none of the answers are correct
	c.	explains why bears eat marmots
	d.	explains why some inefficient accounting practices persist
	e.	explains why firms persist in inefficient behavior

2 points

Question 6

The firm's information system:

	A.	may include other information such as customer satisfaction surveys, in addition to financial information
	B.	none of the answers are correct
	C.	is always a single integrated system
	D.	includes only financial information
	E.	is less important as a firm grows in size

2 points

Question 7

Identify all of the correct statements:

	a.	Managers act in their own interests, and so there is no way to align their interests with those of the owners
	b.	None of the answers are correct
	c.	To motivate managers in non-profit firms, no employee incentives are needed
	d.	Managers naturally seek to maximize shareholders' wealth
	e.	To align the interests of managers and owners, owners must design systems to monitor and reward management behavior that increases the firm's profits

2 points

Question 8

Managerial accountants:

	a.	are mainly score-keepers
	b.	are internal consultants
	c.	focus on calculating product costs
	d.	are corporate cops
	e.	are mostly internal consultants and corporate cops

2 points

Question 9

John invested $12,000 in the stock of Hyper Cyber. Eight years later, Hyper Cyber's shares reached $125,000, but John held onto the shares in the belief that their price would double in the next five years. Unfortunately, Hyper Cyber did not double. Rather the market value of John's shares today is $4,000. If the shares were sold today and the proceeds invested in another investment, they would likely earn 5% per annum. Which of the following terms and values is correct?

	a.	$250,000 is the opportunity cost
	b.	$12,000 is the sunk cost
	c.	$2,000 is the opportunity cost
	d.	$125,000 is the opportunity cost of selling the shares today

2 points

Question 10

Davos Inc. makes fiberglass ski-boards in Switzerland. Identify the correct matching of terms.

	a.	None of the answers are correct
	b.	Fiberglass is factory overhead
	c.	Plant real estate taxes are a period cost
	d.	Payroll taxes for workers in the Packaging Department are direct labor
	e.	Depreciation on delivery trucks is a product cost