BUSINESS ENVIRONMENT & CONCEPTS (BEC)

1. Which component of the COSO framework is concerned with the people of an entity and their overall competence?
Control activities.
Monitoring.
Information and communication.
Control environment.
2. A bank is considering building a branch on a piece of property it already owns. Which of the following cash flows should NOT be considered in the capital budgeting analysis? The:
$50,000 the firm will forgo in lost revenue from the sale of the property if the company decides to build.
several hundred customers that will switch from alternative branches to the new branch if the bank makes the investment.
shipping and installation charges the bank must spend to get equipment in the new branch.
$100,000 spent to determine whether there are any environmental issues regarding the property.
3. Which of the following may be used to estimate how inventory warehouse costs are affected by both the number of shipments and the weight of materials handled?
Economic order quantity analysis.
Multiple regression analysis.
Probability analysis.
Correlation analysis.
4. The most likely strategy to reduce the breakeven point would be to:
Decrease the fixed costs and increase the contribution margin.
Increase the fixed costs and decrease the contribution margin.
Increase both the fixed costs and the contribution margin.
Decrease both the fixed costs and the contribution margin.
5. A disaster recovery plan usually has all of the following elements EXCEPT:
identifying users that would be affected.
identifying key personnel responsible for handling recovery operations.
identifying key applications.
documentation and training.
6. When an operator enters customer account information, the system gives an error prompt that the city and zip code do not match. This is most likely due to what control?
Hash total.
Missing data check.
Combination check.
Control total.
7. If the Federal Reserve wanted to reduce the supply of money as part of an anti-inflation policy, it might:
buy U.S. securities on the open market.
buy U.S. securities directly from the Treasury.
lower the discount rate.
increase the reserve requirements.
8. The total market value of all final goods produced by the citizens of a country is called:
gross domestic product.
personal income.
gross national product.
disposable income.