Finc 44 - Chapter 18-21

CHAPTER 18

1. What is the fourth step in the quick close?

1. Document the Process
2. Defer routine work
3. Eliminate duplication
4. Clear out the junk

1. What is the first step in the quick close?

1. Document the Process
2. Defer routine work
3. Eliminate duplication
4. Clear out the junk

1. What is the third step in the quick close?

1. Document the Process
2. Defer routine work
3. Eliminate duplication
4. Clear out the junk

1. What is the second step in the quick close?

1. Document the Process
2. Defer routine work
3. Eliminate duplication
4. Clear out the junk

1. Smaller stocks mean that the count can be taken, checked, and summarized more easily.

1. Taking inventory
2. Securing credit
3. Completing the annual audit
4. Preparing more accurate financial statements

1. This is a quick review of how the process flows.

1. Create a functional flowchart
2. Create a flowchart
3. Clear out the junk
4. Defer routine work

1. Prepare certain accounting entries on a standard basis and adjust periodically as in the case of depreciation and insurance.

1. Set investigation levels
2. Prepare forms in advance
3. Automate standard items
4. Anticipate problems

1. It should include a proper grouping of accounts to ensure uniformity in reporting, both between segments of the business and from period to period.

1. Create a chart of accounts
2. Use exception reporting
3. Create branch schedules
4. Control output

1. The   _____________ must lead theprocess of constantly reducing the time and effort required to achieve a quality closing.

1. Bank Manager
2. Controller
3. Treasurer
4. Accountant

1. Create as many allocation bases as possible before the end of the period.

1. Reduce cycle time
2. Develop distribution
3. Anticipate problems
4. Replace serial activities with parallel activities

1. A key component of the fast close.

1. Quantity
2. Work in Process
3. Overhead
4. Quality

1. This will minimize the problems of peak loads, trouble spots, and absenteeism.

1. Train the staff
2. Control output
3. Develop distributions
4. Set investigation levels

1. Provide information to lenders, investors, and management that will not lead to incorrect decisions by those users

1. product of the accounting close
2. product of the quick close
3. product of the financial close
4. product of the fast close

1. Any user of the financial statement, usually lenders, investors, and management.

1. Controller
2. Treasurer
3. Customer
4. Manager

1. Defined as “information that will not lead to incorrect decisions by the customer.”

1. Control
2. Quality
3. Accuracy
4. Time

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1. The U.S. government enables _________ to get a clear view of a company’s history and progress, and a glimpse of its future, through a set or required filings.

1. Investors
2. Controllers
3. Accountants
4. Shareholders

1. The U.S. Securities and Exchange Commission is established on:

1. 1932
2. 1933
3. 1934
4. 1935

1. The Securities and Exchange Commission requires public companies to disclose meaningful financial and other information to the public, which enables investors to refer to a common pool of knowledge on a specific company in order to make sound and informed business decisions.

1. True
2. False
3. Kind of
4. GEGE na dis

1. By collecting information from public companies, the Securities and Exchange Commission (SEC) is able to accomplish its primary mission; to promote the disclosure of important market-related information while maintaining fair dealing and protecting against fraud.

1. True
2. False
3. Maybe
4. GEGE na dis

1. The ____________ provides insight into a company’s financial status, changes in executive leadership, or intentions to pursue a merger with another company.

1. Broken Filings
2. SEC Filings
3. Hard Filings
4. Emotional Filings

1. Some are the most common SEC Filings EXCEPT:

1. Form 8-K Current Report Filings
2. Form 10-K Annual Report on a Company
3. Form 10-Q Quarterly Report on a Company
4. All of the above

1. This filing includes information on recently announced news pertaining to a company and its business activities.

1. Form 8-K
2. Form 9-K
3. Form 10-K
4. Form 11-K

1. A filing that includes information on the company’s business and services, acquisitions and investments, legal proceedings, executives’ and board member’s compensation and related party transactions, along with other comprehensive information about the dealings o the company during the past year.  

1. Form 10-K
2. Form 11-K
3. Form 10-Q
4. Form 11-K

1. A filing that requires companies to provide information on the planned use of capital proceeds, detail that current business model and competition, and provide a brief prospectus of the planned security itself, offering price methodology and any dilution that will occur to the other listed securities.

1. Form S-1
2. Form S-2
3. Form S-3
4. Form S-8

1. This filing includes information on the company’s financial status during the preceding three months.

1. Form 10-K
2. Form 11-K
3. Form 10-Q
4. Form 11-K

1. Form S-3 is composed of TWO parts, the First Part is consists of a cover page, risk factors and a prospectus that will eventually be made available to all potential investors:

1. True
2. False
3. Kind of
4. GEGE

1. The Second Part of Form S-3 is consists of exhibits, undertakings and various other disclosures that are typically distributed to investors but are not made available to the public.

1. True
2. False
3. Maybe
4. GEGE

1. A filing with the Securities and Exchange Commission (SEC) that is used by a publically traded company to register securities that will be offered to its employees via benefit or incentive plans.

1. Form S-6
2. Form S-7
3. Form S-8
4. Form S-9

1. It is a real-time gross settlement system of central bank money used by Federal Reserve Banks to electronically settle final U.S. dollar payments among member institutions.

1. Fedwire
2. Livewire
3. Wireless
4. Lanwire

1. It is owned and operated by the 12 Federal Reserve Banks. It is a networked system for payment processing between the member banks themselves, as well as other participating institutions.

1. Barbwire
2. Fedwire
3. Quadwire
4. Strawberry Wire

20

1. If the controller is to give quality information to management, then his or her ability to look objectively at the business is crucial.

1. False                b. True                        c. None of the above

1. This indicates what share of the sales dollar is translated into profit. Industry averages are available from the Federal Trade Commission and the Securities and Exchange Commission for comparison purposes.

1. Ratio of gross profit to net sales
2. Percent operating margin as related to sales
3. Percent return on net sales

1. This is a company’s after-tax net operating profit for the year, minus its cost of capital for that year. Any excess amount indicates that the company has created more wealth than it has used.

1. Economic value added
2. Market value added
3. Percent return on total capital employed

1. The board of directors and management use performance measures to judge and correct the performance of the company.

1. False                b. True                        c. None of the above

1. This measure can be compared to the size of the market to determine if the company has changed its percentage share of the market. It can also be reviewed for sales changes based on volume or price increases.

a. Percent increase in earnings per share

b. Percent increase in net income

c. Percent increase in sales

1. The debt indicators measure the firm’s ability to retain and pay for debt, EXCEPT _______.

1. Times preferred dividends earned
2. Payables turnover
3. Number of times fixed charges are earned

1. This measure indicates the avoidance of stock dilution, the use of debt, the use of retained earnings, or the acquisition of a company with a lower price/earnings ratio.

a. Percent increase in earnings per share

b. Percent increase in net income

c. Percent increase in sales

1. These ratios measure the firm’s ability to meet short-term obligations, EXCEPT ______.

1. Ratio of gross profit to net sales
2. Current ratio
3. Expense coverage days

1. It indicates how well a company generates cash relative to selected measures.

a. Adequacy Ratio

b. Sufficiency Ratio

c. Efficiency Ratio

1. The cash flow sufficiency ratio measures the ability of the entity to generate sufficient cash to pay its debts, reinvest in its operations, and pay dividends to the owners. A value in excess of 1 over a period of years reflects an ability to satisfactorily cover these principal cash requirements.

a.  True                        b. False                        c. None of the above

1. The accuracy of all active labor routing files is necessary for the proper planning of production capacity requirements, without which it is impossible to adhere to a production schedule.

1. Labor routing accuracy
2. Bill of material accuracy
3. Inventory Accuracy

1. This measure is especially useful in situations where the cost of acquiring new customers is high, so the importance of retaining existing customers is paramount.

1. Sales per salesperson
2. Quote to close ratio
3. Customer turnover

1. The controller should periodically analyze the cost of various methods of selling (through distributors, direct sales, catalogs, etc.) versus the margin earned through each method of sale.

1. Trend of sales quotas
2. Trend of cost of distribution channels
3. Trend of amount of utilized storage space

1. The controller needs to use a different set of ratios when evaluating the performance of a JIT manufacturing system.

1. True                        b. False                                c. None of the Above

1. The inventory accuracy measure should be broken down into raw materials, WIP, and finished goods, so that slow turnover areas can be highlighted more easily.

1. True                        b. False                                c. None of the above

21

C. 1. The main task of a controller is:

a. To conduct o conduct a sufficiently detailed investigation into the causes of variations to write a detailed analysis of any problems, along with recommendations for changes.