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IIA Business Knowledge for Internal Auditing Sample Questions (Q260-Q265):

NEW QUESTION # 260
When applied to international economics, the theory of comparative advantage proposes that total worldwide output will be greatest when:

• A. Goods that contribute to a nation's balance-of-payments deficit are no longer imported.
• B. International trade is unrestricted and tariffs are not imposed.
• C. Each nation's total imports approximately equal its total exports.
• D. Each good is produced by the nation that has the lowest opportunity cost for that good.

Answer: D
NEW QUESTION # 261
The leadership of an organization encourages employees to form voluntary problem-solving groups whereby several employees from the same work area meet regularity during work hours to discuss improvements and creative ways to reduce costs. Which of the following best describes this approach?

• A. Self-managed teams
• B. Quality control circles
• C. Cross-functional teams
• D. Open-book management

Answer: A
NEW QUESTION # 262
Which of the following statements about slack time and milestones are true?
1.Slack time represents the amount of time a task may be delayed without delaying the entire project.
2.A milestone is a moment in time that marks the completion of the project's major deliverables.
3.Slack time allows the project manager to move resources from one task to another to ensure that the project is finished on time.
4.A
milestone requires resource allocation and needs time to be completed.

• A. 1 and 4 only
• B. 1, 2, and 3 only
• C. 1, 2, 3, and 4
• D. 2 and 3 only

Answer: B
NEW QUESTION # 263
In the standard regression equation y = a + bx, how is the letter b best described?

• A. Variable coefficient
• B. Dependent Variable
• C. Independent Variable
• D. Constant coefficient

Answer: A Explanation:
In the standard regression equation, b represents the variable coefficient. For example, in a cost determination regression, equals total costs, b is the variable cost per unit, is the number of units produced, and a is fixed cost. In preparing the annual profit plan for the coming year, Wilkens Company wants to determine the cost behavior pattern of the maintenance costs.
Wilkens has decided to use linear regression by employing the equation = a + bx for maintenance costs. The prior year's data regarding maintenance hours and costs, and the results of the regression analysis, are given below and in the opposite column.
NEW QUESTION # 264
The amortization of intangible assets with finite useful lives is justified by the:

• A. Historical cost assumption
• B. Economic entity assumption.
• C. Going concern assumption.
• D. Monetary unit assumption

Answer: C Explanation:
Every business is assumed to be a going concern that will continue operating indefinitely. Thus liquidation values are not important. For example if an entity is not a going concern, its intangible assets are reported at liquidation values, not at historical cost net of amortization.
NEW QUESTION # 265
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