Archives: Quiz

List two ways in which analytical procedures can help the auditor in the planning stage of the audit An entity uses internal control procedures in order to mitigate the risks to which the entity is exposed. Listed below are two […]

You have been asked to prepare a presentation on materiality which will provide guidance to members of staff in conducting limited company audits. Include in your presentation A definition of materiality and performance materiality The alternative measures that could be […]

Explain the basic principles of risk based auditing. Set out five examples each of ‘¢ Strategic risks ‘¢ Operational risks Answer: The business risk approach to auditing involves: ‘¢ looking at the business in its entirety. ‘¢ evaluating the various […]

A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the controlling account in the general ledger to the controlling accounts for a. Work in Process and Cost […]

Variances from standard costs are reported to a. suppliers b. stockholders c. management d. creditors The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were […]

Which of the following is a disadvantage of decentralization? a. Decisions made by one manager may negatively affect the profitability of the entire company. b. Decentralization helps retain quality managers. c. Managers closest to the operations make decisions. d. Managers […]

The rate of return on investment may be computed by multiplying investment turnover by the profit margin. a. True b. False Cupcake mix The following are some of the costs incurred by Cupcake Company. Identify them as either: a. Prime […]

A favorable cost variance occurs when actual cost is less than budgeted cost at actual volumes. a. True b. False The Lucy Corporation purchased and used 129,000 board feet of lumber in production, at a total cost of $1,548,000. Original […]

Property taxes on a factory building would be included as part of the cost of products manufactured under the absorption costing concept. a. True b. False The contribution margin ratio is computed as contribution margin divided by sales. a. True […]

The Swan Company produces its product at a total cost of $43 per unit. Of this amount, $8 per unit is selling and administrative costs. The total variable cost is $30 per unit and the desired profit is $20 per […]

Purchase requisitions for Purchasing and the number of payroll checks for Payroll Accounting are examples of activity bases. a. True b. False ABC Corporation has three service departments with the following costs and activity base: ABC has three operating divisions, […]

The balance sheets at the end of each of the first two years of operations indicate the following: If net income is $150,000 and interest expense is $20,000 for Year 2, what is the rate earned on total assets for […]

Prime costs are the combination of direct labor costs and factory overhead costs. a. True b. False Electricity purchased to operate factory machinery would be included as part of the cost of products manufactured under the absorption costing concept. a. […]

Often, investors must create legal structures for their investment that will maximize the foreign venture’s U.S. dollar resources. These might include: a. Borrowing start-up money in local currency. b. Buying supplies and services locally, using local currency. c. Building unitary […]

The precise structure of inactive investment in a foreign nation depends largely on the treatment of the structure under the tax laws of the host country and the U.S. a. True b. False The seller’s bank acting as an advising […]

The term mediation when dealing with dispute resolution refers to the situation where: a. The two disputing parties settle the disagreement by themselves. b. A third party tries to bring the parties in conflict to a mutually satisfactory solution. c. […]

Ocean carriers are liable for damages resulting from which of the following: a. Providing a seaworthy ship at the beginning of the voyage. b. Mismanagement of the ship that causes a shipwreck. c. Errors in navigation that cause a mid-ocean […]

Contract negotiations in Japan are characterized by all of the following except: a. The Japanese desire for group harmony and consensus. b. The importance of not losing face or becoming embarrassed. c. The presence of lawyers during the negotiations to […]

U.S. businesspeople complain that the quality of manufactured goods in the Mexican maguiladoras plants are below industry standards. a. True b. False The Free Trade Area of the Americas (FTAA) was successfully passed by the United States, Canada, Mexico and […]

Regarding environmental issues and NAFTA: a. NAFTA sets strict environmental and ecological standards for all three countries. b. NAFTA calls for the three countries to work together to develop common environmental standards. c. NAFTA countries can continue to ban pesticides […]

Gertrude Clodfelter, an 80 year old resident of North Dakota, recently filed a lawsuit in Florida against Islander Cruise Company, a Florida corporation, seeking damages as a result of a fall she suffered in the shower during a cruise to […]

A home country refers to the country under whose laws the investing corporation was created or is incorporated. a. True b. False In order to participate in the Monetary Union, Maastricht requires European Union members to achieve all of the […]

Because international law is not dictated by any one legislative body, it is lawmaking by choice and by consent. a. True b. False Under the Foreign Sovereign Immunities Act, a federal court would not have jurisdiction over a foreign nation […]

The purpose of the bill of lading is to: a. Transfer title of the goods to the freight forwarder. b. Prevent shipping delays. c. Enable the seller to transfer title of the goods to the buyer and receive payment. d. […]

The Flammable Fabrics Act is an example of a technical regulation that is in violation of the principles of GATT/WTO. a. True b. False Under the Recognition of Licensing and Professional Qualifications, countries must recognize professional licenses granted by foreign […]

The U.S. prohibits the export of pesticides not approved by the U.S. EPA. a. True b. False The negative implication doctrine means that state governments may not enact laws that impose a substantial burden on foreign commerce. a. True b. […]

Ocean carriers are not liable for more than $500 per package where the shipper has had: a. The opportunity to purchase marine insurance. b. The opportunity to indicate the nature and value of the goods on the bill of lading. […]

American law fails to regulate pesticides that are exported to other countries. a. True b. False The GATT Agreement on Safeguards permits a member state to increase tariffs on an imported product in order to allow a domestic manufacturer to […]

If a question arises over a trade usage, the CISG provides that: a. No reference to trade usage is allowed by a court. b. A court can look at those trade usages that the parties knew or ought to have […]

Which of the following statements is untrue regarding trade between the U.S., Canada, and Mexico? a. Canada and the United States are each other’s largest trading partners. b. Mexico underwent a serious financial crisis in 1994. c. Some key industries […]

Developing countries are enforcing their respective environmental laws in order to reduce their industrial and transportation emissions. a. True b. False The term used to describe some action taken by a GATT member country in violation of the GATT agreement […]

The GATT Agreement authorizes countervailing duties to offset the effect of subsidies on imports that cause or threaten material injury to a domestic industry. a. True b. False Regarding NAFTA’s investment provisions: a. Domestically owned companies are given priority over […]

Some countries have enacted “language laws” in advertising in order to: a. preserve the purity of the country’s primary language. b. require advertisers to be clear and honest about their products. c. protect children from inappropriate language. d. All of […]

The Treaty of Lisbon included all of the following except: a. Renaming the EEC to the EU. b. The right for states to withdraw from the EU. c. A citizen’s initiative process. d. Elevation of the European Council to a […]

In determining the description of an article under the tariff schedules by the courts a.Common meaning b.WTO definitions c.Scientific authorities and expert witnesses d.a and c COGSA governs the liability of ocean carriers for damage to goods while the goods […]

Contract laws in socialist countries tend to be: I. Detailed, mechanical, and cumbersome. II. Enforced by private companies operating on behalf of the state. Which of the following is correct? a. Both I and II. b. Neither I nor II. […]

One of the founding concepts of libertarian capitalism is caveat emptor, which means: a. truth in advertising. b. let the buyer beware. c. always maximize profits. d. sales potential. The GATT dispute panel found that Thailand’s regulations on the importation […]

Unlike typical marine bills of lading, air waybills are: a. not legally binding. b. always electronic. c. non-negotiable. d. documents of title Members of the EU include the following countries except: a. France. b. Luxembourg. c. Italy. d. Switzerland. e. […]

Under a device known as nachfrist notice, the CISG allows either party — buyer or seller — to fix an additional period of time, beyond the date called for in the contract, for the other to perform. a. True b. […]

According to Incoterms, the trade term that represents the maximum responsibility of the seller is: a. Carriage and Insurance Paid To. b. Delivered Duty Paid. c. Ex Works. d. Delivered at Frontier. e. None of the above. An importer in […]

When evaluating the effect of a merger, the European Union seeks to determine: a. The impact of the merger by totaling the total number of competitors left. b. Amount of capital invested in the combined companies in relation to the […]

What do many legal historians believe led to the development of modern international law? a. the rise of the European nation-state b. Chinese dynastic law c. Roman law d. trade law in the Middle Ages A consignee can prove a […]

Himalaya Clauses in bills of lading: a. Protect the carrier for damage to cargo being transported over mountainous and rugged terrain. b. Protect stevedores from liability in loading and unloading ships. c. Protect only the shipper for improper packaging of […]

Which convention calls for contracting parties to criminalize bribery of public officials and money laundering? a. UN Convention Against Crime b. UN Convention of Extraterritoriality c. UN Convention Against Corruption d. None of the above The Commerce Clause vests the […]

Under U.S. law, corporations are taxed on all income, including income from foreign sources that is repatriated back to the United States. a. True b. False A holder in due course, as defined by the UCC, includes which of the […]

In order to avoid a charge of violating the FCPA, commissions and other payments to a foreign sales agent should conform to customary rates normally paid to agents of that kind in the foreign nation. a. True b. False A […]

In an action to collect a customs penalty, the U.S. Treasury Department is the plaintiff and need only prove that the importer was negligent in providing misinformation. a. True b. False If a U.S. exporter is concerned about political and […]

When a nation that belongs to WTO imposes a tariff or quota on imported products, it is supposed to do so within the guidelines established by GATT. If it does not do so within GATT’s guidelines: a. The offending nation […]

Many countries require pre-clearance of children’s television advertising. a. True b. False U.S. Customs regulations specify many articles that are exempt from marking requirements. Some of these are: a.Eggs, flowers, nuts, and bolts. b.Products that cannot be marked without injury. […]

Under contract terms “DES Stockholm,” the seller must pay the ocean freight to Stockholm, but the buyer pays the unloading charges at the Stockholm terminal. a. True b. False A good faith purchaser is one who purchases a document of […]