CPA Practice Exam Questions And
Already Passed Answers.
Reconciling the accounts receivable control and subsidiary accounts is useful in ensuring that: - Answer
All credit sales transactions are recorded.
(Because credit sales should appear in the subsidiary ledger (and obviously, in aggregate, in the control
account), this activity will be useful in determining that all credit sales are recorded.)
Which of the following technologies is specifically designed to exchange financial information over the
World Wide Web? - Answer Extensible business reporting language (XBRL).
(XBRL is specifically designed to exchange financial information over the World Wide Web)
The data control protocol used to control transmissions on the Internet is - Answer TCP/IP
(Transmission control protocol/Internet protocol (TCP/IP) is the protocol used by the Internet.)
Which of the following types of performance measures integrates financial performance, internal
operations, learning and growth, and customer satisfaction? - Answer Balanced scorecard
(The balanced scorecard is defined somewhat by its four categories of financial, customers, internal
business processes, and learning and growth.)
The Internet is made up of a series of networks which include - Answer Gateways to allow mainframe
computers to connect to personal computers.
,(Gateways connect Internet computers of dissimilar networks.)
Which measures would be useful in evaluating the performance of a manufacturing system?
I. Throughput time.
II. Total setup time for machines/Total production time.
III. Number of rework units/Total number of units completed. - Answer I, II, and III.
(All three measures are relevant to the evaluation of how a manufacturing system is performing.
Throughput time is the total time required for an item to make its way through the manufacturing
system. The ratio of setup time to total production time reflects the adaptability of the system to
required changes in production capability. If this ratio is excessive, the firm is unable to alter its product
to meet changing customer demand. The ratio of rework to total units is a measure of quality. A lower
ratio indicates higher quality and less interruption to the production process)
Which of the following is not true? - Answer Intranets are generally available to the public.
(Intranets usually require a username and password in order to access the system.)
Adjusting journal entries are of additional concern when they are - Answer Unusual and manually
posted.
(Unusual, manually posted entries are of greater concern because they may indicate fraud or earnings
management.)
In the accounting cycle, closing journal entries: - Answer Transfer balances in temporary accounts to
retained earnings.
,(This is the purpose of closing journal entries.)
Which of the following balanced scorecard perspectives examines a company's success in targeted
market segments? - Answer Customer.
(The customer perspective evaluates the organization's success in targeted customer and market
segments.)
The management of a company would do which of the following to compare and contrast its financial
information to published information reflecting optimal amounts? - Answer Benchmark.
(Benchmarking provides a relevant comparison when trying to achieve the optimal outcome by
comparing to others.)
Governance is primarily the responsibility of: - Answer The board.
(This statement is true. Governance is primarily the responsibility of the board of directors.)
A company that sells hand-carved statues from rural Indonesia online is using a ___________ strategy: -
Answer Product differentiation
(This is an example of a product differentiation strategy since competitors are unlikely to be able to sell
this same product.)
Selling a digitized product can: - Answer Both A and B
A: Decrease its cost.
B:Improve its quality.
According to the COSO Enterprise Risk Management Framework, each of the following is considered by
management as part of a risk assessment, except - Answer Unknown risk.
, (Management does not consider unknown risk as a part of risk assessment.)
The initial tasks of the ERM working group are to: - Answer First, determine the working group's
objectives and the expected benefits of ERM, and, second, inventory the organization's existing risk
management practices
(These are the first and second steps of an ERM working group.)
A manufacturer actively monitors a foreign country's political events whenever a supply chain disruption
occurs within the country that exceeds 90 days. According to the COSO Enterprise Risk Management
principles, the manufacturer is following which of the following risk-response strategies? - Answer
Accept
(Accepting risk means taking no action to change the severity of the risk. In this case, the manufacturer
has created a system to monitor the risk but not to share, avoid, or reduce it. Hence, the manufacturer
has accepted the risk.)
Which of the following would be the least likely choice to lead an ERM initiative? - Answer Controller
(The controller usually reports to the Chief Financial Officer, not the CEO. Of the offered alternatives, the
controller is the least likely choice to head an ERM initiative.)
The overarching reason to implement ERM is: - Answer Creating and protecting shareholder value.
(As is stated in the lesson, creating and protecting shareholder value is the primary reason to implement
ERM: "ERM is sometimes misunderstood as primarily concerning compliance and regulation, or, as a risk
identification exercise. In fact, the goal of ERM is to improve organizational decision making and increase
the organization's value.")
Which of the following was least likely to be a potential "black swan" event to a manufacturer of
software and computer microchips? - Answer The September 11 terrorist attack
Already Passed Answers.
Reconciling the accounts receivable control and subsidiary accounts is useful in ensuring that: - Answer
All credit sales transactions are recorded.
(Because credit sales should appear in the subsidiary ledger (and obviously, in aggregate, in the control
account), this activity will be useful in determining that all credit sales are recorded.)
Which of the following technologies is specifically designed to exchange financial information over the
World Wide Web? - Answer Extensible business reporting language (XBRL).
(XBRL is specifically designed to exchange financial information over the World Wide Web)
The data control protocol used to control transmissions on the Internet is - Answer TCP/IP
(Transmission control protocol/Internet protocol (TCP/IP) is the protocol used by the Internet.)
Which of the following types of performance measures integrates financial performance, internal
operations, learning and growth, and customer satisfaction? - Answer Balanced scorecard
(The balanced scorecard is defined somewhat by its four categories of financial, customers, internal
business processes, and learning and growth.)
The Internet is made up of a series of networks which include - Answer Gateways to allow mainframe
computers to connect to personal computers.
,(Gateways connect Internet computers of dissimilar networks.)
Which measures would be useful in evaluating the performance of a manufacturing system?
I. Throughput time.
II. Total setup time for machines/Total production time.
III. Number of rework units/Total number of units completed. - Answer I, II, and III.
(All three measures are relevant to the evaluation of how a manufacturing system is performing.
Throughput time is the total time required for an item to make its way through the manufacturing
system. The ratio of setup time to total production time reflects the adaptability of the system to
required changes in production capability. If this ratio is excessive, the firm is unable to alter its product
to meet changing customer demand. The ratio of rework to total units is a measure of quality. A lower
ratio indicates higher quality and less interruption to the production process)
Which of the following is not true? - Answer Intranets are generally available to the public.
(Intranets usually require a username and password in order to access the system.)
Adjusting journal entries are of additional concern when they are - Answer Unusual and manually
posted.
(Unusual, manually posted entries are of greater concern because they may indicate fraud or earnings
management.)
In the accounting cycle, closing journal entries: - Answer Transfer balances in temporary accounts to
retained earnings.
,(This is the purpose of closing journal entries.)
Which of the following balanced scorecard perspectives examines a company's success in targeted
market segments? - Answer Customer.
(The customer perspective evaluates the organization's success in targeted customer and market
segments.)
The management of a company would do which of the following to compare and contrast its financial
information to published information reflecting optimal amounts? - Answer Benchmark.
(Benchmarking provides a relevant comparison when trying to achieve the optimal outcome by
comparing to others.)
Governance is primarily the responsibility of: - Answer The board.
(This statement is true. Governance is primarily the responsibility of the board of directors.)
A company that sells hand-carved statues from rural Indonesia online is using a ___________ strategy: -
Answer Product differentiation
(This is an example of a product differentiation strategy since competitors are unlikely to be able to sell
this same product.)
Selling a digitized product can: - Answer Both A and B
A: Decrease its cost.
B:Improve its quality.
According to the COSO Enterprise Risk Management Framework, each of the following is considered by
management as part of a risk assessment, except - Answer Unknown risk.
, (Management does not consider unknown risk as a part of risk assessment.)
The initial tasks of the ERM working group are to: - Answer First, determine the working group's
objectives and the expected benefits of ERM, and, second, inventory the organization's existing risk
management practices
(These are the first and second steps of an ERM working group.)
A manufacturer actively monitors a foreign country's political events whenever a supply chain disruption
occurs within the country that exceeds 90 days. According to the COSO Enterprise Risk Management
principles, the manufacturer is following which of the following risk-response strategies? - Answer
Accept
(Accepting risk means taking no action to change the severity of the risk. In this case, the manufacturer
has created a system to monitor the risk but not to share, avoid, or reduce it. Hence, the manufacturer
has accepted the risk.)
Which of the following would be the least likely choice to lead an ERM initiative? - Answer Controller
(The controller usually reports to the Chief Financial Officer, not the CEO. Of the offered alternatives, the
controller is the least likely choice to head an ERM initiative.)
The overarching reason to implement ERM is: - Answer Creating and protecting shareholder value.
(As is stated in the lesson, creating and protecting shareholder value is the primary reason to implement
ERM: "ERM is sometimes misunderstood as primarily concerning compliance and regulation, or, as a risk
identification exercise. In fact, the goal of ERM is to improve organizational decision making and increase
the organization's value.")
Which of the following was least likely to be a potential "black swan" event to a manufacturer of
software and computer microchips? - Answer The September 11 terrorist attack
