TRUE OR FALSE

1. Prudent borrowings can increase the return on capital to the owners.

Answer: TRUE
2. By recognizing expenses sooner, one can force expenses into the current
reporting year that would otherwise be deterred.
Answer: TRUE
3. The first step in setting the marketing expense standard is to select units or
bases of measurement through which the standard can be expressed.
Answer: FALSE, since this is the second step.
4. A company wanting to grow rapidly may elect to pursue a tight credit policy.
Answer: FALSE
5. The controller has an independent role in the planning and control of sales.
Answer: TRUE
6. Actuaries are independent professionals who make the pension cost
estimates.
Answer: TRUE
7. The cost in a service company is variable on the short term; therefore the
traditional distinction of fixed cost is generally not as useful in a service
business.
Answer: FALSE
8. The controller has the responsibility of checking and verifying the
computations and other supporting data of the proposals before submission
for the top management approval.
Answer: FALSE (controller should be financial staff)
9. A good target period to complete integration activities even for large acquire
is one year.
Answer: TRUE
10.The principal purpose of investor relations functions, regardless of who
performs it is to enhance shareholder value by increasing the price of the
common stock.
Answer: TRUE
11.It is possible to be centralized some phases of the tax function, particularly
when the various types of taxes and related records are considered.
Answer: FALSE - it should be decentralized
12.The stage-gate system segregates a companys new product process into a
series of development stages.
Answer: TRUE
13.Cash management is a basic financial function and usually responsibility of
the senior financial officer.
Answer: TRUE
14.The controller reports directly to Chief Financial Officer.
Answer: TRUE
15.It is easier to increase profits by reducing costs than it is to increase profits
by increasing sales.
Answer: TRUE

16.The most commonly recognized fraud areas involve inventories but it is

actually much easier for an employee to steal assets in other areas such as
cash and investment.
Answer: FALSE
17.An unfavorable variance may be due to poor planning rather than due to
inefficiency.
Answer: TRUE
18.A highly skilled profession with lots of stress, like a consultancy firm, has a
very high turnover, typically in the range ofn25 to 30 percent per year
however, the accounting area/department should not be an excessively highstress area thus should not have turnover rates common in consulting firms.
Answer: TRUE
19.The duration of terms of the audit committee should not be limited in order to
bring in new committee members on a regular basis.
Answer: FALSE
20.Is it true that the most practiced means of communication to these
shareholders or future investor is the Annual Report?
Answer: TRUE
21.The tax imposed on capital financed/acquired through debt is deductible from
the cost of capital; thereby making debt financing most desirable than issuing
new stocks preferred or common.
Answer: TRUE
22.The controller generally provides financial data needed by other executives
and makes financial analyzes for them, to assist in setting appropriate
objectives and testing the alternative strategies.
Answer: TRUE
23.The purpose of strategic planning is to set the guidelines and policies of the
company that serve as the basis for the next echelon of plans.
Answer: TRUE
24.Calendar year can also be the natural business year.
Answer: TRUE
25.Standard will not be a true measuring stick if it does not change.
Answer: TRUE, standard must be kept updated.
26.Even if a company pays its employees electronically, it must still find a way to
give them evidence of the payment.
Answer: TRUE

MULTIPLE CHOICES
1. It measures the relationship of the highly liquid assets-cash temporary
investment, and accounts receivable to current liabilities.

a. quick ratio
b. current ratio
c. minimum net
working capital
2. To reduce ones overall taxes is that a company transfers its product to a
division in another country at the lowest possible price.
a. transfer prices
b. nexus
c. property
taxes
3. The costs relative to all activities from the time goods are produced and
manufactured or from the time of purchase in a manufacturing company
until the products reach the customer.
a. sales expense
b. marketing expenses
c. cost of sales
4. The department responsible for converting large amount of receivables
into cash is:
a. sales department
b. tax department
c. collection
department
5. Planning and control of sales is a primary responsibility of:
a. chief sales executive b. chief accounting officer c. chief executive
officer
6. It is the most significant report to be prepared and filed with BIR and
DOLE.
a. annual report
b. financial statements
c. report of an
accountant
7. This cost is not as significant item in the delivery of a service company
and it is not as necessary to have a comprehensive procedure to identify
their receipt and utilization.
a. direct labor
b. materials
c. overhead
expenses
8. The following are valuation methods used in capital budgeting except:
a. throughput method
b. hurdle rate method
c. payback
method
9. There are several culture areas in which conflict can lead to acquisition
failure. Which one is not included?
a. organizational structure b. bureaucracy
c. none of the
above
10.Who among the group of recipients of investor relations does not belong
to the group?
a. stock investors
b. financial press
c. common
public
11.It represents a summary of the tax law and related matters as they affect
the business.
a. tax calendar
b. tax working papers and files
c. tax
information records
12.Which of the following is not true on the role of the controller in Research
& Development?
a. The controller assists in developing guidelines for the total amount to
be spent on R&D activities.
b. The controller provides acceptable, practical expense control reports.

c. The controller is the sole person responsible in managing the

R&D activities.
13.It is a projection of the anticipated cash receipts and disbursements and
the resulting cash balance within a specified period.
a. cash forecast
b. bank reconciliation
c. investment
14.What is a more complete description title of a controller?
a. chief accounting officer
b. chief financial officer
c. chief
operating officer
15.
Using these systems, companies can analyze their expenditure s in a
number of ways by commodity, supplier, business unit and others, then
they summarize this information for centralized procurement negotiations
with suppliers, thereby reducing costs.
a. spend management system
b. deficit system
c.
budget system
16.
What group of employees has the bulk of real responsibility of control
and has the highest degree of training and experience in internal control
area?
a. internal audit staff
b. independent auditor
c.
financial management
17.
A favorable price variance for direct materials indicates that:
a. A lower price than expected was paid for materials
b. A higher price than expected was paid for materials
c. Less materials was used during production than planned for actual
output
18.
The most common kind of promotion is one that shifts a staff person
sideways through the hierarchy of the accounting department.
a. horizontal type of promotion b. vertical type of promotion
c.
corporate ladder
19.
The best alternative to resolve the reporting conflict between
accounting and internal audit is to shift the reporting function directly to:
a. Board of Directors
b. Chief Executive Officer
c.
Finance Department
20.
The release of information to the investor community that is not
through the mandated of Securities and Exchange Commission (SEC) is in
the form of:
a. structured disclosure
b. unstructured disclosure
c.
financial reports
21.
It is the rate of return that must be paid to investors to induce them to
supply the necessary funds.
a. interest
b. dividend
c.
cost of capital
22.
Construction projects have been known to exceed budgets. A worst
case scenario could help management anticipate funding requirements.
a. competitive response
b. capital cost overruns
c.
deterioration of margins
23.
Which of the following components of a strategic plan is false?
a. A clear and understandable statement of the companys basic purpose

b. A carefully thought-out strategy or means to accomplish this basic

purpose
c. A statement of general goals to be achieved under the
strategy and means of measuring progress toward each
d. A statement of the assumptions or conditions used or needed to
achieve the goals
24.
The following are the advantages of using the natural business year as
the fiscal period, except one.
a. annual audit fee can be negotiated
b. more accurate financial statements
c. higher profit
d. quicker, cheaper and accurate inventory taking
25.
In controlling cost, which is not a controllers work?
a. To advise and facilitate
b. To report the facts on other activities of the business so that corrective
action may be taken
c. Usually confined to summarizing basic information, analyzing results
and preparing intelligently conceived reports
d. None of the above
26.What do you call on the time when the payroll department processes a
batch of paychecks?
a. payroll cycle
b. payroll payments
c.
electronic transfers
ENUMERATION
1. What are the two sources of capital or funds?
Answer: - issuance of shares of stocks
- capital borrowing
2. What are the primary goals in tax planning?
Answer: - accelerate deductions
- take all available tax credits
- avoid non allowable expenses
- increase tax deferrals
- obtain tax exempt income
3. What are the five types of analyses?
Answer: analysis by nature of expense
- analysis by functional operation
- analysis by manner of application
- analysis by territory
- analysis by product
4. Give at least two measurements used by the controller to gain a clear picture
of the state of companys account receivables.
Answer: - accounts receivable turnover ratio
- days old when discount taken
- days sales outstanding
- percent of bad debt losses
- percent of unexplained credits take

- reasons for bad debt write offs

Name at least two concerns in sales management.
Answer: - product
- pricing
- distribution
- method of sales
- organization
- planning and control
6. Name at least two investment instruments.
Answer: - stocks
- bonds
- derivatives
- options
- warrants
5.

7. What are the two types of allocated expenses in a service company?

Answer: - proximate overhead
- remote overhead
8. Enumerate the three valuation methods used in capital budgeting.
Answer: payback method
- rate of return methods
- throughput method
9. What are the two types of buyer?
Answer: financial buyer
- strategic buyer
10.Identify the three broad groups which the investor relations activity id
primarily diverted.
Answer: - security analysts
- stock brokers
- large institutional investors
11.Enumerate the three majors classifications of tax records:
Answer: tax calendar
- tax information records
- tax working papers & files
12.Give two quantitative techniques in evaluating R&D expenditures.
Answer: - return on assets or return on investment
- return on net sales
13.Give at least three objectives of cash management.
Answer: provision of adequate cash for operations
- effective utilization of companys funds at all times
to establishment of accountability for cash receipts and provision
of adequate safeguards until funds are placed in the company
depository
- to establish of control to ensure that disbursements are made only
for approved and legitimate purposes
- maintenance of adequate bank balances to support proper
commercial bank relations
- maintenance of adequate cash records

14.Enumerate the four major functions of the controller.

Answer: - planning function
- control function
- reporting function
- accounting function
15.What are the costs included in the General and Administrative expenses?
Answer: the expenses includes costs for a specific set of departments and
expenses that cannot be directly related to production or sales activities and
so are segregated in the chart of accounts under a separate account category
16.What are the five main control objectives in internal control system?
Answer: - authorization
- reconciliation
- recording
- safeguarding
- valuation
17.What is the commonly used costing system that primarily targeted at
production situations where customized goods are produced?
Answer: - job costing
18.What are the key factors involved in selecting a recruiting source?
Answer:
recruitment cost
- recruiting quality
- recruiting time
19.What are the three composition of the audit committee?
Answer:
minimum level of financial expertise among its members
- duration of their terms
- minimum number of meetings per year
20.What are the different channels of communications to shareholders and
potential shareholders?
Answer: - annual report together with the 10Q and proxy statement
- publicized quarterly report
- other written reports issued by the company
- other investor related activities like periodic meetings an special
announcements
21.Enumerate the five common items or content of a ledger used in maintaining
capital stock records.
Answer:
name and address of holder
- date of changes in holdings
- certificate numbers issued and surrendered
- number of shares in each transaction
- total number of shares held
22.What are the key elements of a strategic plan?
Answer:
basic statement by division manager
- long range plan of each business area
- summarized financial schedule
- human resource overview
- information resource management overview
- facilities overview

overview of productivity improvement plan

overview of any other functional area

23.Give at least three factors that serve as a guide in selecting the proper
planning span in doing strategic planning.
Answer:
lead time for product development
- length of life of the product
- market development time
- development time for raw materials and components
- time for construction of physical facilities
- payout period for capital investment
24.Natural business year terminates when business is at ebb. Name at least
three primary indicator that the business can be considered is at an ebb.
Answer: low level inventory
- peak volume of sales passed
- declining receivables
- liability is at the minimum or being reduced
25.Give the three types of benchmarking.
Answer: competitive benchmarking
- non-competitive benchmarking
- internal benchmarking
26.Enumerate at least three time keeping systems.
Answer: - time sheets
- biometrics
- bundy clock