1. The term value in use means

A. The price at which an asset can be sold in orderly markets

B. The amount the company would receive by selling the asset in orderly markets, less transaction cost

C. The expected present value of continuing to use the asset

D. The price at which someone can buy the asset now.

2. A car dealership decides to rank its sales people based on the number of cars that they sell during a month, in the hopes of making more money by making more sales. One salesman reacts by offering very generous deals to customers, in order to make sales, even though the dealership will not make any profits at these prices. This behavior can best be characterized as:

A. Acting to modify the measurement system before it goes into effect.

B. Doing what is desired in response to being measured

C. Doing what looks good on the measurement system, even though it was not what was actually desired

D. Lying

3. The term net realizable value means

A. The price at which an asset can be sold in orderly markets

B. The amount the company would receive by selling the asset in orderly markets, less transaction costs

C. The sales value assuming the company must sell immediately

D. The price at which someone can buy the asset now.

4. A company currently produces both regular and deluxe models of a particular product. The deluxe model requires the company to buy special metal trim for decoration. If the company stops producing the deluxe model, it will no longer need to buy the metal trim. In considering whether to stop producing the deluxe model, the trim is best characterized as:

A. A capacity cost

B. An avoidable cost

C. An interchangeable cost

D. A fixed cost

5. A car dealership decides to rank its sales people based on the number of cars that they sell during a month, in the hopes of making more money by making more sales. One salesman reacts by working harder, and being more welcoming to customers, and increased the number of sales he made. This behavior can best be characterized as:

A. Acting to modify the measurement system before it goes into effect.

B. Doing what is desired in response to being measured

C. Doing what looks good on the measurement system, even though it was not what was actually desired

D. Lying