Free BEC CPA Questions and Answers — Questions and Answers
Question 1: Which of the below is NOT a typical tactic for a company in a market that is only competitive?
- Lean manufacturing.
- Process reengineering.
- Supply chain management.
- Development of a brand name. (Correct answer)
Correct answer: Development of a brand name.
End-user computing refers to situations where non-IT professionals directly use and often develop computer applications. Personal computers (PCs) are designed for individual use and provide the accessibility and software tools (like spreadsheets and word processors) that empower end-users to manage their own data and tasks without extensive IT support, making them ideal for this purpose.
Question 2: Which of the these types of computers is most probably to be used for end-user computing?
- Mainframe.
- Minicomputers.
- Personal reference assistants.
- Personal computers. (Correct answer)
Correct answer: Personal computers.
A check digit is a calculated digit appended to a number, used to detect errors during data entry. 'Check digit verification' recalculates this digit upon entry and compares it to the stored one. This control is specifically designed to catch transcription errors, such as entering a similar but incorrect product code (Z96015 instead of Z96014), making it the most effective control for this mistake.
Question 3: A consumer wanted to order 100 units of item Z96014, but placed an improper order for product Z96015, <br>which did not exist.Which of the following controls is the most likely to catch this mistake?
- Hash total.
- Check digit verification. (Correct answer)
- Record count.
- Redundant data check.
Correct answer: Check digit verification.
Enterprise Risk Management (ERM) aims to identify, assess, and manage risks to achieve organizational objectives, leading to benefits like improved capital deployment, enhanced risk response, and seizing opportunities. While ERM involves various risk responses, including sharing, its primary goal is comprehensive risk management, not to 'insure that the organization shares all major risks,' as sharing is just one potential strategy among many.
Question 4: Jar Corporation is thinking about putting in operation a risk management system for the company. <br>Which of the following benefits of enterprise risk management is not one of them?
- Helps the organization seize opportunities.
- Improves the deployment of capital.
- Insures that the organization shares all major risks. (Correct answer)
- Enhances risk response decisions.
Correct answer: Insures that the organization shares all major risks.
Credit risk in the context of derivatives refers to the possibility that the counterparty to the derivative contract will default on its obligations. If the counterparty fails to perform, the derivative may become ineffective or worthless, thereby failing to successfully hedge the specific asset it was intended to protect. Thus, the inability of the derivative to fulfill its hedging purpose can be a direct consequence of credit risk.
Question 5: Which of the below risks is associated with the potential that a derivative may not be successful in hedging a specific asset?
- Legal risk.
- Market risk.
- Basis risk.
- Credit risk. (Correct answer)
Correct answer: Credit risk.
Credit risk is not associated with the potential that a derivative may not be successful in hedging a specific asset. Credit risk is the risk that the counterparty to a derivative contract will default on its obligations.<br> The risk associated with the potential that a derivative may not be successful in hedging a specific asset is basis risk. Basis risk is the risk that the price of the derivative will not move perfectly in line with the price of the underlying asset.<br> For example, a company may use a futures contract to hedge the price of a commodity that it sells. If the price of the commodity falls, the company will lose money on its sales. <br>However, if the price of the futures contract does not fall as much as the price of the commodity, the company will not be fully hedged and will still lose money.
Question 6: A natural monopoly exists because of _________.
- The firm holds patents.
- Economic and technical conditions permit only one efficient supplier. (Correct answer)
- The government is the only supplier.
- The firm owns natural resources.
Correct answer: Economic and technical conditions permit only one efficient supplier.
A natural monopoly arises when a single firm can supply a good or service to an entire market at a lower cost than two or more firms could. This is typically due to extremely high fixed costs or significant economies of scale, where the average cost of production continuously falls as output increases. Therefore, the economic and technical conditions naturally lead to one efficient supplier dominating the market.
Question 7: What kind of technology is required to turn a paper document into a digital file?
- Optical character recognition. (Correct answer)
- Electronic data interchange.
- Joining and merging.
- Bar-coding scanning.
Correct answer: Optical character recognition.
Optical Character Recognition (OCR) is a technology specifically designed to convert different types of documents, such as scanned paper documents or images, into editable and searchable data. It works by identifying and extracting text from the visual input. This process is essential for digitizing physical records and transforming them into digital files, making them accessible and manageable on computers.
Free BEC CPA Questions and Answers
Which of the below is NOT a typical tactic for a company in a market that is only competitive?