[Jan 10, 2022] IIA-CIA-Part3 Exam Dumps, IIA-CIA-Part3 Practice Test Questions
Free IIA-CIA-Part3 Study Guides Exam Questions & Answer
IIA IIA-CIA-Part3 Exam Syllabus Topics:
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NEW QUESTION 203
Which of the following is classified as a product cost using the variable costing method?
1. Direct labor costs
2. Insurance on a factory.
3. Manufacturing supplies.
4. Packaging and shipping costs
- A. 3 and 4
- B. 1 and 2
- C. 2 and 4
- D. 1 and 3
Answer: D
NEW QUESTION 204
Which of the following accounting methods is an investor organization likely to use when buying 40 percent of the stock of another organization?
- A. Consolidation method
- B. Cost method
- C. Fair value method
- D. Equity method
Answer: D
NEW QUESTION 205
Using variable costing, the company's operating profit was:
- A. US $750.000
- B. US $840,000 C US $915,000 D US $975,000
Answer: B
Explanation:
Under variable costing, the product cost includes only variable manufacturing costs. All fixed costs are expensed in the period incurred. Unit product cost under variable costing is US $6 $600.000 100,000 units produced).
C:\Documents and Settings\usernwz1\Desktop\1.PNG A and B, are autonomous divisions of a corporation. They have no beginning or ending inventories, and the number of units produced is equal to the number of units sold. Following is financial information relating to the two divisions:
NEW QUESTION 206
The inventory model that follows the concept that 80% of the value of an inventory is in 20% of the inventory items is the:
- A. Just-in-time inventory system.
- B. Economic order quantity (EOQ) model.
- C. ABC system.
- D. Materials requirements planning (MRP) system.
Answer: C
Explanation:
The ABC method of inventory control requires management to exert greatest control over the A classification items, which usually include a relatively small percentage of total items but a high percentage of the dollar volume. This method is analogous to the 80/20 rule, which says, for instance, that 20% of the customers account for 80% of the profit.
NEW QUESTION 207
When managing cash and short-term investments, a corporate treasurer is primarily concerned with:
- A. Liquidity and safety.
- B. Investing in government bonds since they have no default risk.
- C. Maximizing rate of return.
- D. Minimizing taxes.
Answer: A
Explanation:
Cash and short-term investments are crucial to an entity's continuing success. Sufficient liquidity must be available to meet payments as they come due. At the same time, liquid assets are subject to significant control risk. Therefore, liquidity and safety are the primary concerns of the treasurer when dealing with highly liquid assets. Cash and short term investments are held because of their ability to facilitate routine operations of the entity.
These assets are not held for purposes of achieving investment returns.
NEW QUESTION 208
What is the method of presenting a noncontrolling interest in a consolidated balance sheet?
- A. As a separate item within the equity section.
- B. As a deduction from contra to goodwill from consolidation if any.
- C. As a separate item within the deferred credits section.
- D. By means of notes to the balance sheet.
Answer: A
Explanation:
A noncontrolling is classified as an equity account and separated from the equity of majority shareholders within that section.
NEW QUESTION 209
The cost of goods sold under the specific identification method of inventory valuation is:
- A. US. $1,1z.1
- B. US $1,'. 1
- C. US $1,:
- D. US $1.+1 ,1I
Answer: D
Explanation:
Of the 800 units sold during the period, the 300 units said on March 15 were purchased on January 12 at a cost of US $2.00 per unit. The remaining 500 units were purchased on May 5 at a cost of US $2.20 per unit. The cost of goods sold under the specific identification method is therefore US $1.700 [(300 units x $2.00) +500 units ? $2.20)].
NEW QUESTION 210
Which of the following would provide the most relevant assurance that the application under development will provide maximum value to the organization?
- A. Adequate software documentation.
- B. Use of a formal systems development lifecycle.
- C. Formalized non-regression testing phase.
- D. End-user involvement.
Answer: D
NEW QUESTION 211
Which of the following is not a method for implementing a new application system?
- A. Pilot.
- B. Test.
- C. Parallel.
- D. Direct cutover.
Answer: B
NEW QUESTION 212
Within an enterprise, IT governance relates to the:
1. Alignment between the enterprise's IT long term plan and the organization's objectives.
2. Organizational structures of the company that are designed to ensure that IT supports the organization's strategies and objectives.
3. Operational plans established to support the IT strategies and objectives.
4. Role of the company's leadership in ensuring IT supports the organization's strategies and objectives.
- A. 1, 2, and 4 only
- B. 2, 3, and 4 only
- C. 1 and 2 only
- D. 3 and 4 only
Answer: A
Explanation:
Explanation/Reference:
NEW QUESTION 213
The process of scenario planning begins with which of the following steps?
- A. Selecting the issue or decision that will impact how the organization conducts future business.
- B. Selecting leading indicators to alert the organization of future developments.
- C. Identifying how customers, suppliers, competitors, employees, and other stakeholders will react.
- D. Determining the trends that will influence key factors in the organization's environment.
Answer: A
NEW QUESTION 214
Which of the following physical access controls is most likely to be based on "something you have" concept?
- A. A PIN code reader.
- B. A retina characteristics reader.
- C. A fingerprint scanner.
- D. A card-key scanner.
Answer: C
NEW QUESTION 215
The correct equation for calculating the approximate percentage cost, on an annual basis, of not taking trade discounts is
- A. Option D
- B. Option B
- C. Option A
- D. Option C
Answer: C
Explanation:
The first term of the formula represents the periodic cost of the trade
discount, calculated as the cost per unit of trade credit discount %) divided by the funds made available by not taking the discount 100 - discount %). The second term represents the number of times per year this cost is incurred. The multiple of these terms is the approximate annual percentage cost of not taking the trade discount. A precise formula would incorporate the effects of compounding when calculating the annual cost.
NEW QUESTION 216
At December 31 of Year 1, an entity had a provision of US $40,000 for the "Estimated
Liability under Warranties" account. During Year 2, the entity sold 1,000 new units under warranties reliably estimated at US $100 per unit. The actual parts and labor warranty expenditures for Year 2 were US $90,000. Warranty expense for Year 2 should be
- A. US $50,000
- B. US $90,000
- C. US $40,000
- D. US $100,000
Answer: D
Explanation:
Recognition of provisions is appropriate when the entity has a legal or constructive present obligation resulting from a past event (called an obligating event), it is probable that an outflow of economic benefits will be necessary to settle the obligation, and its amount can be reliably estimated. Accordingly, a provision should be recognized for warranty expense in the period in which the matching revenue is recorded. Thus, the debit to warranty expense and the credit to provision for warranty expense in Year 2 is US $100,0001,000 units x $100).
NEW QUESTION 217
What language interface would a database administrator use to establish the structure of database tables?
- A. Data definition language.
- B. Data query language.
- C. Data control language.
- D. Data manipulation language.
Answer: A
Explanation:
The schema is a description of the overall logical structure of the database using data definition language DDL), which is the connection between the logical and physical structure of the database. DDL is used to define, or determine, the database.
NEW QUESTION 218
The network below describes the interrelationships of several activities necessary to complete a project. The arrows represent the activities. The numbers between the arrows indicate the number of months to complete each activity. The shortest time to complete the project is:
- A. 5 months.
- B. 8 months.
- C. 14 months.
- D. 6 months.
Answer: B
Explanation:
The longest, or critical, path in the network from node A) to node F) is path A- -D-F. All other paths are shorter than path A-C-D-F, so the activities along those paths can be completed before the activities along path A-C-D-F. Thus, the shortest time to complete the project is 8 months 3 + 3 + 2).
NEW QUESTION 219
Market-based pricing involves:
- A. Basing prices on the product's perceived value.
- B. Basing prices on competitors' prices.
- C. Determining the price at which the product' will earn a target profit.
- D. Adding a standard markup to the cost of the product.
Answer: A
Explanation:
Market-based pricing involves basing prices on the product's perceived value rather than on the seller's cost Jon price variables in the marketing mix augment the perceived value. For example, a cup of coffee may have a higher price at an expensive restaurant than at a fast food outlet.
NEW QUESTION 220
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