BEC Exam Practice Multiple Choice Questions
I. Corporate Governance
1. The Board of Directors powers include all of the following except
a) Responsible for overseeing the daily operations of the company.
b) Hiring/firing of the chief executive officer (CEO).
c) Decide the declaration/payment of dividends.
d) Have knowledge of information technology audit techniques.
2. Shareholders have the right to each of the following except:
a) Right to receive declared dividends.
b) Right to oversee CEO succession.
c) Right to sue on company’s behalf if a violation of fiduciary duty occurs.
d) Right to inspect books and records.
3. The right of shareholders to keep their ownership level in a company the same if new shares are issued is
a) Pre-emptive right
b) Cumulative voting right
c) Business judgment rule
d) Duty of loyalty
4. The right for a stock owner to be able to vote once for each board seat for each share owned is
a) Cumulative voting rights
b) Pre-emptive rights
c) Duty of loyalty
d) Business judgment rule
5. The Business judgment rule definition is
a) Where management and shareholder’s goals are aligned to match each other.
b) Where a director can not be held liable as long as they exercised care and due diligence.
c) Where management of company puts the interest of the company ahead of their own.
d) Where the audit committee must have at least one financial expert.
6. Where management of company puts the interest of the company ahead of their own is the definition of
a) Companies Bylaws
b) Business Judgment rule
c) Duty of loyalty
d) Articles of incorporation
7. The combination of fixed compensation and bonuses tied to stock price is the be way to
a) Align management’s goals with that of the shareholders
b) Allow compliancy
c) Undertake the wrong amount of risks
d) Align management’s goals with that of the lower level employees
8. Articles of Incorporation include all except:
a) Proposed name and address
b) Name of registered agent
c) Name and address of the first listed incorporator
d) Number of authorized shares
9. Bylaws of a company include each of the following except
a) Usually state when and how officers will be elected.
b) What duties these officers will perform.
c) How many mandatory meetings will take place.
d) Develops corporate governance principles.
10. The Audit Committee includes all of the below except
a) Must have at least one financial or accounting expert within its members
b) The external auditor does not have to report directly to them.
c) Audit committee members must all be independent.
d) Have no direct financial or direct family connections with employees of the company.
11. The audit committee financial expert must have an understanding of all except
a) Functions of the audit committee.
b) CEO pay incentives and equity based compensation.
c) Internal control and procedures of financial reporting for organizations.
d) Generally accepted accounting principles (GAAP).
12. The Nominating/Corporate Governance Committee does not
a) Oversees board organization.
b) Determines director qualifications and training.
c) Review or approve CEO compensation
d) Oversees CEO succession.
13. The CEO and CFO must
a) Attest to the accuracy and truthfulness of the company’s financial documents.
b) Provide how each director independence level was determined to its stockholders.
c) Have knowledge of key information technology risks.
d) Have no direct financial or direct family connections with employees of the company.
14. Dodd Frank Act of 2010 requires each except
a) Requires all members of the compensation committee of public companies must be independent.
b) Requires public corporations to disclose why or why not the chairman of the board is also the chief executive
officer.
c) Requires a nonbinding vote by shareholders on extreme pay incentives to top executives at least every three
years.
d) Requires a code of conduct for all employees to be made public.
15. New York Stock Exchange (NYSE) and NASDAQ requirements for corporations include all except
a) Majority of directors must be independent.
b) Provide how each director independence level was determined to its stockholders.
c) Must have an independent audit committee.
d) Must have one regularly scheduled executive session for each fiscal year.
16. Internal control of a corporation has three objectives and they include all except
a) Reliability of the company’s financial statements.
b) Compliance with all laws.
c) Efficiency of the company’s operations.
d) Supervision and implementation of a plan that should provide reasonable assurance.
17. Which of the following is not one of the limitations of Internal Control
a) Weaken risk response decisions.
b) Human judgment can be faulty.
c) Breakdowns can occur because of human failures such as simple errors or mistakes.
d) Circumvention by collusion.
18. The internal auditor must:
a) Have knowledge of key information technology risks.
b) Have knowledge of information technology audit techniques.
c) Can evaluate fraud risk.
d) Be appointed by the audit committee.
19. Internal control systems fail because controls
a) Not designed/implemented properly.
b) Properly designed/ implemented and effective because of changes within the organization’s environment.
c) Circumvention by collusion.
d) Human judgment can be faulty.
20. Evaluators are/do not
a) Competent
b) Objective
c) Maintain monitoring of the disposition of audit results.
d) Monitor controls within an organization.
21. Monitoring for change continuum within an organization does not include
a) Control Baseline –serves as the starting point.
b) Change identification – identification of a change needed from monitoring.
c) Change Management – Design and implementation of the changes needed.
d) Control environment – providing surroundings that entice proper structure and policies leading to internal
control.
22. Control environment factors/components for a general organization
a) Commitment to competence.
b) Low Level management and their philosophy/operating style.
c) Delegation of authority/responsibility.
d) H/R policies and procedures
23. Enterprise risk management (ERM) Committee of sponsoring organization (COSO)–uses procedures to identify,
access, control, and manages organizational governance by providing guidance. It also helps to align the
stakeholders of the company risk appetite with that of management. Which of the following is not one of its
components.
a) Control activities
b) Information and Communication
c) Risk Assessment
d) Risk appetite
24. The definition of control activities is
a) Makes sure all policies and procedures of management are undertaken appropriately.
b) Continually checking to make sure controls are working properly.
c) Mission statement stating the goals of the organization in terms of its internal control.
d) Organizational employer can identify risks to internal control.
25. The definition of Risk Assessment is
a) The process management uses to identify, analyze, and respond to internal or external risks.
b) Organizational employer can identify risks to internal control.
c) Continually checking to make sure controls are working properly.
d) Controls and potential risks of breaking controls can be identified.
26. The definition of Monitoring the implemented Controls is
a) Organizational employees know what to do when risks to internal control are present.
b) Controls and potential risks of breaking controls can be identified.
c) Continually checking to make sure controls are working properly.
d) Organizational employer can identify risks to internal control.
27. The definition of Information and Communication is
a) Makes sure all policies and procedures of management are undertaken appropriately.
b) The process management uses to identify, analyze, and respond to internal or external risks.
c) Makes sure all information and communication finds it way to the appropriate levels of the organizations
employees.
d) Organizational employees know what to do when risks to internal control are present.
28. The definition of Risk Responses is
a) Organizational employees know what to do when risks to internal control are present.
b) Controls and potential risks of breaking controls can be identified.
c) Organizational employer can identify risks to internal control.
d) Continually checking to make sure controls are working properly.
29. The definition of Event Identification is
a) Makes sure all policies and procedures of management are undertaken appropriately.
b) The process management uses to identify, analyze, and respond to internal or external risks.
c) Continually checking to make sure controls are working properly.
d) Controls and potential risks of breaking controls can be identified.
30. The definition of Objective setting is
a) Makes sure all information and communication finds it way to the appropriate levels of the organizations
employees.
b) Mission statement stating the goals of the organization in terms of its internal control.
c) Makes sure all policies and procedures of management are undertaken appropriately.
d) Organizational employer can identify risks to internal control.
31. Risk Appetite is
a) The acceptable amount of change in a risk or risks that the company is willing to allow.
b) Amount of risk that is acceptable and the company can still achieve its goals.
c) Where an entity or person will choose between two investments the investment with the less risk.
d) Reduction of risk by avoiding the situation altogether or exiting the situation.
32. Risk tolerance is
a) The acceptable amount of change in a risk or risks that the company is willing to allow.
b) Where an entity or person will choose between two investments the investment with the less risk.
c) Reduction of risk is not possible and the company accepts it.
d) Amount of risk that is acceptable and the company can still achieve its goals.
33. Risk averse is
a) Amount of risk that is acceptable and the company can still achieve its goals.
b) Reduction of risk by implementing safeguards to minimize the likelihood/effects of an adverse reaction.
c) Improves risk response decisions.
d) Where an entity or person will choose between two investments the investment with the less risk.
34. Risk responses include all of the following except
a) Avoidance.
b) Sharing.
c) Acceptance.
d) Tolerance.
35. The following are advantages of using the ERM framework except
a) Reduces the operational surprises and losses.
b) Organization can seize opportunities more easily.
c) Makes capital less easy to transfer.
d) Improves risk response decisions.
36. Some limitations of the ERM framework include all of these except
a) Potential for management override.
b) Collusion among employees.
c) Risk response decisions are made easier.
d) Uncertain future for businesses.
37. Which of the following is not a step of the COSO ERM Model
a) Providing surroundings that entice proper structure and policies leading to internal control.
b) Structuring organization so employees are assigned job duties according to their capability, objectivity, and
authority.
c) Design and Implement monitoring controls to get the most output from the controls with the least input.
d) Evaluate and Report monitoring controls to proper authorities so that needed actions can take place.
II. Economic Concepts and Analysis
38. Factors or variables that may shift the demand curve include all of the following except
a) Price of substitute goods.
b) Price of complement goods.
c) Number of producers.
d) The size of the market.
39. The definition of demand curve is
a) As the price of a product increases, the quantity demanded by consumer’s decreases and vice versa.
b) Measures the change in demand for a good when the price of a related or competing product is changed.
c) As the price of a certain product increases, the quantity supplied increases.
d) The value or satisfaction to a consumer of the next dollar they would spend on a certain product.
40. Normal goods are
a) Where one good can take the place of another without a loss of quality.
b) Where goods are usually consumed during the course of normal business.
c) Where one good can take the place of another but there would be a loss of quality.
d) Where one good is needed or usually consumed in conjunction with another good.
41. The definition of substitute goods
a) Where one good can take the place of another without a loss of quality.
b) Where goods are usually consumed during the course of normal business.
c) Where one good can take the place of another but there would be a loss of quality.
d) Where one good is needed or usually consumed in conjunction with another good.
42. Complement goods are
a) Where one good can take the place of another without a loss of quality.
b) Where goods are usually consumed during the course of normal business.
c) Where one good can take the place of another but there would be a loss of quality.
d) Where one good is needed or usually consumed in conjunction with another good.
43. Marginal utility is
a) The value or satisfaction to a consumer of the next dollar they would spend on a certain product.
b) The % of the next dollar of disposable income the consumer would be willing to spend to purchase another unit.
c) The % of the next dollar of disposable income the consumer would be willing to save rather than purchase
another unit.
d) Where one good is needed or usually consumed in conjunction with another good.
44. The definition of Law of Diminishing Returns is
a) The % of the next dollar of disposable income the consumer would be willing to save rather than purchase
another unit.
b) The more a consumer purchases (consumes) of a product the less valuable they will deem the next purchased
unit.
c) The % of the next dollar of disposable income the consumer would be willing to spend to purchase another unit.
d) The value or satisfaction to a consumer of the next dollar they would spend on a certain product.
45. Marginal propensity to Consume
a) The % of the next dollar of disposable income the consumer would be willing to save rather than purchase
another unit.
b) The more a consumer purchases (consumes) of a product the less valuable they will deem the next purchased
unit.
c) The % of the next dollar of disposable income the consumer would be willing to spend to purchase another unit.
d) The value or satisfaction to a consumer of the next dollar they would spend on a certain product.
46. Marginal propensity to Save is
a) The % of the next dollar of disposable income the consumer would be willing to save rather than purchase
another unit.
b) The more a consumer purchases (consumes) of a product the less valuable they will deem the next purchased
unit.
c) The % of the next dollar of disposable income the consumer would be willing to spend to purchase another unit.
d) The value or satisfaction to a consumer of the next dollar they would spend on a certain product.
47. As the price of a certain product increases, the quantity supplied increases is the definition of
a) Demand curve
b) Supply Curve
c) Aggregate demand curve
d) Phillips curve
48. Factors with a positive effect on supply curve include all except
a) Number of producers
b) Government subsidies
c) Price expectations
d) Prices of other goods
49. Factors with a negative effect on supply curve does not include
a) Prices of other goods
b) Changes in production costs
c) Changes in management costs
d) Price expectations
50. The definition of price ceilings is
a) Setting price below equilibrium
b) Setting price above equilibrium
c) Increase in units produced (output) that results from an increase in production costs (input).
d) Gives producers a higher price than what they normally would receive for their products.
51. The definition of price floors is
a) Setting price below equilibrium
b) Setting price above equilibrium
c) Increase in units produced (output) that results from an increase in production costs (input).
d) Gives consumers a lower price than what they normally would receive from producers.
52. In the long run, fixed costs become variable costs and will increase because of
a) Diseconomies of scale
b) Marginal costs
c) Marginal revenue
d) Economies of scale
53. The difference of the initial amount paid for something and what the next potential bidder would pay is
a) Return to scale
b) Marginal costs
c) Marginal revenue
d) Economic Rent
54. An economy composed of a large number of sellers, the products of each seller are very similar or
standardized, the products price must stay within the industry average, and there are very few barriers to
entry/exit.
a) Perfect Monopoly
b) Monopolistic Competition
c) Oligopoly
d) Perfect (Pure) Competition
55. A/an ___________usually includes lots of producers (sellers), products are differentiated but can be
interchanged (substituted) and easy for a firm to enter or leave the market.
a) Perfect Monopoly
b) Monopolistic Competition
c) Oligopoly
d) Perfect (Pure) Competition
56. A/an _________ usually has only a few producers (sellers), products are similar or non-similar, and the market
has high restrictions for entry and exit.
a) Perfect Monopoly
b) Monopolistic Competition
c) Oligopoly
d) Perfect (Pure) Competition
57. A/an __________ usually only has one producer (seller), the product does not have any close substitutes, and
there are very few restrictions on entering the market.
a) Perfect Monopoly
b) Monopolistic Competition
c) Oligopoly
d) Perfect (Pure) Competition
58. A perfect monopoly can exist because of each of the following except
a) Patents
b) Government franchises
c) Increasing returns to scale
d) Decreasing returns to scale
59. The price of all goods and services produced by a domestic economy during the year for sale only in that
country, not in another is
a) Consumer Price Index
b) Producer Price Index
c) Gross national product (GNP)
d) Gross domestic product (GDP)
60. The price of all goods and services, whether for sale or produced within its boundaries or in another country.
a) Consumer Price Index
b) Producer Price Index
c) Gross national product (GNP)
d) Gross domestic product (GDP)
61. Measures price of certain goods and services that a typical consumer would probably consume and/or
purchase in relation to the price paid for the same goods and services in an earlier period.
a) Consumer Price Index
b) Producer Price Index
c) Gross national product (GNP)
d) Gross domestic product (GDP)
62. Measures price of certain goods and services at the wholesale cost to dealers, does not include any purchases
made by consumers.
a) Consumer Price Index
b) Producer Price Index
c) Gross national product (GNP)
d) Gross domestic product (GDP)
63. Starts moving up months before an actual recovery begins
a) Lagging indicator
b) Coincidence indicator
c) Leading indicator
d) Non- Coincidence indicator
64. Moves up and down simultaneously with economic recoveries and recessions
a) Lagging indicator
b) Coincidence indicator
c) Leading indicator
d) Non-Coincidence indicator
65. Starts moving up months after a recovery has begun, and starts declining months after a recession has begun
a) Lagging indicator
b) Coincidence indicator
c) Leading indicator
d) Non-Coincidence indicator
66. Unemployed whose job skills do not match the wants of employers
a) Frictional unemployment
b) Structural unemployment
c) Cyclical unemployment
d) Full employment
67. Caused by changes in the business cycle or economy
a) Frictional unemployment
b) Structural unemployment
c) Cyclical unemployment
d) Full employment
68. Unemployed who are changing jobs or just entering the work force
a) Frictional unemployment
b) Structural unemployment
c) Cyclical unemployment
d) Full employment
69. When the opportunity costs of producing a certain good or service relative to the opportunity cost of
producing other goods is lower in one country than it is in another
a) Absolute advantage
b) Disadvantage
c) Comparative advantage
d) Advantage
70. When a country can produce a good or service at a lower cost than another country.
a) Absolute advantage
b) Disadvantage
c) Comparative advantage
d) Advantage
71. The World Bank
a) Usually provides money to countries in financial crisis.
b) Usually lends money to countries for development and building infrastructure.
c) Increasing the reserve requirements of banks (decreases the money supply and increases the interest rates).
d) Decreasing taxes (increases the money supply to the general public and generally expands the economy).
72. The International Monetary Fund
a) Usually lends money to countries for development and building infrastructure.
b) Usually provides money to countries in financial crisis.
c) Increasing the reserve requirements of banks (decreases the money supply and increases the interest rates).
d) Decreasing taxes (increases the money supply to the general public and generally expands the economy).
73. Allows the buyer (holder) to either buy (call) or sell (put) whatever the agreement states
a) Option
b) Contract
c) Stock
d) Bond
74. Where the Federal Reserve central bank of the United States borrows money given to them to hold by
depositors and loaned out to individuals and others for spending purposes.
a) Euro policy
b) Federal policy
c) Monetary policy
d) Fiscal policy
75. Where the federal government takes actions such as taxes levied, subsidies paid out, and other government
spending programs to promote a stable economy.
a) Euro policy
b) Federal policy
c) Monetary policy
d) Fiscal policy
76. The Federal Reserve can influence the interest rates or monetary policy of the country by
a) Increasing the reserve requirements of banks (decreases the money supply and increases the interest rates).
b) Decrease spending (decreases the money supply to the general public and generally contracts the economy).
c) Decreasing taxes (increases the money supply to the general public and generally expands the economy).
d) Increase spending (increases the money supply to the general public and generally expands the economy).
77. The federal government can influence the economy and how strong it is by
a) Increasing the reserve requirements of banks (decreases the money supply and increases the interest rates).
b) Decreasing the reserve requirements of banks (increases the money supply and decreases the interest rates).
c) Purchase more government securities (increases the money supply and decreases the interest rates).
d) Decrease spending (decreases the money supply to the general public and generally contracts the economy).
78. When $1.50 equals 1 Euro instead of it taking $1.70 to equal 1 Euro it means
a) Normal dollar value
b) Abnormal dollar value
c) Stronger dollar
d) Weaker dollar
III. Financial Management
79. Capital that is lost because of the choosing of one alternative over another is
a) Sunk costs
b) Opportunity costs
c) Differential costs
d) Relevant costs
80. Costs that change from one alternative to another is
a) Sunk costs
b) Opportunity costs
c) Differential costs
d) Relevant costs
81. Capital that has been spent and cannot be recovered is
a) Sunk costs
b) Opportunity costs
c) Differential costs
d) Relevant costs
82. Any future costs that will change as a result of a specific decision
a) Sunk costs
b) Opportunity costs
c) Differential costs
d) Relevant costs
83. Which of the following is not an advantage of leasing over buying?
a) Tax advantages
b) Requirement of less initial investment
c) No capitalization
d) Does not evaluate management’s decisions when undertaking a project.
84. What does a covariance of 1.00 mean?
a) Is when one investment goes up, the other will move upwards as well and vice versa.
b) Is where no relationship exists and when one investment changes the other might change or it might not.
c) Is when one investment goes up, the other will move downwards or vice versa.
d) Is where there is a decrease in risk if there is more than one type of investment in an investment portfolio.
85. What does a covariance of 0 mean?
a) Is when one investment goes up, the other will move upwards as well and vice versa.
b) Is where no relationship exists and when one investment changes the other might change or it might not.
c) Is when one investment goes up, the other will move downwards or vice versa.
d) Is where there is a decrease in risk if there is more than one type of investment in an investment portfolio.
86. What does a covariance of -1.00 mean?
a) Is when one investment goes up, the other will move upwards as well and vice versa.
b) Is where no relationship exists and when one investment changes the other might change or it might not.
c) Is when one investment goes up, the other will move downwards or vice versa.
d) Is where there is a decrease in risk if there is more than one type of investment in an investment portfolio.
87. Hedging is?
a) The decrease in risk by the use of more than one type of investment in an investment portfolio.
b) Profit from changes in price of the investment.
c) Risks that can be eliminated from an investment.
d) Risks that cannot be eliminated from an investment no matter what.
88. Profit from changes in price of the investment is the definition of?
a) Hedging
b) Speculation
c) Un-systemic risk
d) Systemic risk
89. Potential that a security or group of security’s prices will decline in value is?
a) Credit risk
b) Price risk
c) Market risk
d) Business sector risk
90. When a company transfers only the amount of funds needed to pay for current bills received and ends the
business day with a zero as the account balance they are practicing what?
a) Lockbox system
b) Concentration banking
c) Electronic funds transfers
d) Zero-balance accounting
91. Which of the following is not an advantage of the lockbox system?
a) Increases internal control
b) Concentration banking
c) Electronic funds transfers
d) Zero-balance accounting
92. Which of the following is not an advantage of Just in Time Inventory purchasing?
a) Lowers investment in inventory and storage space that is needed.
b) Lowers the chance that customers will not be satisfied with the product.
c) Lowers inventory carrying and handling costs.
d) Less chance of defective and obsolete inventory carried past warranty/return date.
93. Which of the following is a debt financing advantage?
a) Interest and principal must be paid no matter how economically stable the firm is.
b) Restrains the company from possibly issuing future debt.
c) Debt is less costly than equity (stock issued) and will maximize earnings per share.
d) Excessive debt can increase the likelihood that stakeholders of the firm could lose their interest in it.
94. Which of the following is not a disadvantage of debt financing activities?
a) Interest and principal must be paid no matter how economically stable the firm is.
b) Fixed interest and principal payments
c) Restrains the company from possibly issuing future debt.
d) Excessive debt can increase the likelihood that stakeholders of the firm could lose their interest in it.
95. Capital leases have characteristics of all of the following except?
a) Lease term itself is equal to 75% or more of the estimated life of the leased item.
b) Has a bargain purchase option that can be exercise at end of lease term.
c) Excessive debt can increase the likelihood that stakeholders of the firm could lose their interest in it.
d) Has clause where ownership of leased item transfers from lessee to lessor at end of lease term.
96. Common stock has all of the following characteristics except?
a) Interest payments resulting from borrowing from a lender can be deducted.
b) Dividend payments to stock holders can not be deducted.
c) Issuing common stock results in sharing more control and ownership with the new purchasers of the new
shares.
d) Dividends typically expected as they usually receive a certain pre-stated dividend amount.
97. Preferred stock characteristics include all of the following except?
a) Dividends typically expected as they usually receive a certain pre-stated dividend amount.
b) Generally lower costs than a common stock issue
c) Initial issuance costs can be expensive.
d) Usually have no voting rights but given first priority over common stockholders if a company files for
bankruptcy.
98. The correct chronological calendar order of the dividend payout process is?
a) Declaration date, ex-dividend date, date of record and the payout date.
b) Date of record, declaration date, ex-dividend date, and the payout date.
c) Declaration date, ex-dividend date, payout date, and the date of record.
d) Declaration date, payout date, date of record, and the dividend date.
IV. Information Systems and Communications
99. A benefit of electronic data interchange is?
a) More potential for errors
b) Dependence on third parties
c) Quick reaction/access to information
d) Increased chance for theft/fraud
100. What is used to change records by adding, updating, or deleting?
a) Data Manipulation Language (DML)
b) Data Definition Language (DDL)
c) Decision Support System (DSS)
d) Hypertext Transfer Protocol (HTTP)
101. What uses models and data to assist in management decisions?
a) Decision Support System (DSS)
b) Data Definition Language (DDL)
c) Data Manipulation Language (DML)
d) Extensible Markup Language (XBRL)
102. Data Definition Language (DDL) is?
a) Uses models and data to assist in management decisions.
b) Used to change records by adding, updating, or deleting.
c) Used to add, update, or delete tables, fields, or databases
d) Used primarily for creating webpages.
103. Extensible Markup Language (XBRL) is?
a) Encodes and tags business information such as account information for a customer. Another example is
Extensive Markup Language (XML).
b) Used primarily for creating webpages.
c) Language used to connect different computers by the internet over the internet.
d) Provides necessary information for management to make appropriate decisions.
104. Which network provides a secured way of connecting from an offsite location to a LAN network?
a) Local Area Networks (LAN)
b) Value Added Network (VAN)
c) Wide Area Network (WAN)
d) Virtual Private Network (VPN)
105. Which network is used where computers are going to be connected from long distances by the use of fiber
optic cables or satellites?
a) Local Area Networks (LAN)
b) Virtual Private Network (VPN)
c) Wide Area Network (WAN)
d) Value Added Network (VAN)
106. Advantages of a VAN network include all of the following except?
a) Reduces scheduling problems.
b) Provides more security than normal transaction channels.
c) Can be costly.
d) Business to business partners have direct communication lines open at all times (thereby reducing problems).
107. Which of the following is a disadvantage of a VAN network?
a) Reduces scheduling problems.
b) Entity can become dependent on the security that VAN offers.
c) Provides more security than normal transaction channels.
d) Business to business partners have direct communication lines open at all times (thereby reducing problems).
108. What is a computer sending data called?
a) Server
b) Client
c) Upload
d) Download
109. Which is a computer that receives data?
a) Server
b) Client
c) Upload
d) Download
110. To upload data means?
a) Data sent from the client to the server.
b) Computer that sends data.
c) Data sent from the server to the client.
d) Computer that receives data.
111. Data sent from the server to the client represents a/an?
a) Server
b) Client
c) Upload
d) Download
112. What is the correct order that data is organized so all computers can process and read it.
a) Bit, Byte, Character, Field, Record, File
b) Bit, Byte, Character, Field, File, Record
c) Bit, Byte, Field, File, Character, Record
d) BIt, Character, Byte, Field, Record, File
113. Batch processing is where?
a) Sum of a certain section or field within a collection of data. Used to check for controls of total amount.
b) Data is collected and processed as it is collected.
c) Sum of a financial total such as checks, cash, or coins. Used to check for controls of total amount.
d) Data is collected and held until processed in a lump sum.
114. Sum of a certain field that is meaningless is the definition of?
a) Batch totals
b) Data is collected and processed as it is collected.
c) Sum of a financial total such as checks, cash, or coins. Used to check for controls of total amount.
d) Data is collected and held until processed in a lump sum.
115. The manipulation of data is?
a) Data mining
b) Data warehouse
c) Digital Signature
d) Digital Certificate
116. Who designs the information system environment as a whole?
a) Systems Programmer
b) Application programmer
c) System analyst
d) System Administrator
117. Who writes, tests, and debugs programs such as payroll or accounts receivable applications?
a) System Administrator
b) Systems Programmer
c) Database administrator
d) Application programmer
118. A system administrator?
a) Secures and oversees the computer system as a whole.
b) Updates and maintains the computer system such as the operating system.
c) Maintains custody of removable media items and for maintenance of program/system documentation.
d) Writes, tests, and debugs programs such as payroll or accounts receivable applications.
119. Advantages of electron funds transfers include all of the following except?
a) Less time consuming
b) Easier to process
c) Increases the risk of unauthorized access.
d) Reduces the frequency of data entry errors.
120. Which check is used in technology transactions of data to keep entities from sending incorrect data by
resending the data received back to the sender to verify and any data sent incorrectly is resent?
a) Echo
b) Limit
c) Field
d) Validity
121. The advantages of database systems include all of the following except
a) Need for expert personnel to run the systems.
b) Minimal duplication of data.
c) Provides data independence.
d) Reduces system maintenance.
122. Which of the controls is not needed for telecommunications?
a) Data entry
b) Encryptions
c) Physical security
d) Disaster recovery plan
123. A disaster recovery plan helps management to prepare for possibility of a long term effecting disaster and
minimize its costs and effects and should do all of the following except?
a) Minimize the disaster effects.
b) Do not have an alternate information processing system
c) Provide for normal operations to begin again as quick as possible.
d) Provide disaster recovery training so everyone employee can be as knowledgeable as possible.
124. Which of the following controls checks for validity, accuracy and completeness of data entered into the
computer system.
a) Input controls
b) Processing Controls
c) Output Controls
d) Physical Access Controls
125. Which of the following controls checks to make sure data is produced accurately and given to the right
employees.
a) Input controls
b) Processing Controls
c) Output Controls
d) Physical Access Controls
126. Is an unwanted program that attaches itself to the user’s files and usually will cause them damage?
a) Trojan Horse
b) Virus
c) Worm
d) Hacking
V. Strategic Planning
127. What does the master budget consist of?
a) Includes financial and operating budgets for a future period.
b) Sales, production, direct materials, direct labor, overhead, research and development, and selling, general, and
administrative expense budgets.
c) Capital expenditures budget, cash budget, budgeted balance sheet, and the budgeted statement of cash flows.
d) Sales, production, and direct materials
128. The budget preparation process consists of four steps. Which of the following is not one of these four steps?
a) Develop a sales forecast.
b) Develop a production schedule.
c) Develop a cash forecast.
d) Estimate any other potential expenses or revenues.
129. The cost of quality includes four types and they include each of the following except?
a) Internal failures
b) Production failures
c) Prevention
d) Detection
130. Which center adds profits and costs to the company?
a) Cost
b) Profit
c) Investment
d) Operating
131. What does the "y" in the regression analysis y=mx+b equal?
a) The dependent variable
b) Slope of regression line
c) The independent variable
d) The y intercept or constant value
132. What does the "x" in the regression analysis y=mx+b equal?
a) The dependent variable
b) Slope of regression line
c) The independent variable
d) The y intercept or constant value
133. Leftover material from the processing another job is included in?
a) Normal spoilage
b) Abnormal spoilage
c) Scrap
d) Rework
134. Spoilage that usually cannot be avoided is?
a) Normal spoilage
b) Abnormal spoilage
c) Scrap
d) Rework
135. The decision of whether to accept a special order to manufacture as long as there is idle capacity is?
a) Sell or process further
b) Special order
c) Make or buy
d) Rework
VI. Operations Management
136. Which costing system is where costs are assigned to a product that can be easily identified and is unique from
any other product and the costs associated with it?
a) Job order
b) Process
c) Just in Time
d) Product
137. Is where costs are assigned to a product that is currently being produced and will not incur any other costs
that were or will be incurred in another period.
a) Job order
b) Process
c) Just in Time
d) Product
138. Over-applied overhead occurs for all of the reasons listed below except?
a) Overhead costs were overestimated.
b) Actual activity was greater than normal capacity.
c) Actual overhead costs were less than expected.
d) Actual overhead costs were more than expected.
139. Which of the below is not one of the four perspectives in the balance scorecard?
a) Financial
b) Customer
c) Learning and Growth
d) External Business Processes
140. What does the Customer Perspective of the balance scorecard focus on?
a) Performance ratings relating to the financial performance of the company.
b) Performance ratings relating to the customer and the market as a whole.
c) Performance ratings relating to the internal operations.
d) Performance ratings relating to skills, training, and work environment of entity’s employees.
141. Benchmarking measures?
a) Measuring to see if the company’s products meet the necessary requirements to meet customer’s demands.
b) Continuous improvement emphasizing identification of small problems and fixing them before they become
larger.
c) Measures variations from standard processing.
d) Measuring the performance of a company or segment of a company against expected performance.
142. SWOT analysis includes which of these?
a) Substitute goods
b) Work in process
c) Opportunities
d) Threat of new entries
143. Porter's five forces analysis includes all of the following except?
a) Threat of new entries
b) Threat of substitute goods
c) Competition
d) Opportunities
144. Which costs do not change with the level of output along the relevant range but fixed unit costs decreases as
the level of output increase along the relevant range or vice versa?
a) Prime
b) Variable
c) Fixed
d) Conversion
145. Costs incurred to convert raw materials into final products. Includes direct labor and materials overhead are?
a) Conversion
b) Prime
c) Fixed
d) Variable
FORMULAS
146. The InsertCard company would like to figure their Weighted Average Cost of Capital so they will know what
their optimal capital structure is.
Debt cost = 5.0% Weighted at 40%
Preferred Stock = 8.0% Weighted at 20%
Common Stock = 10% Weighted at 40%
a) 7.0%
b) 7.2%
c) 6.7%
d) 7.6%
147. Hair Corporation has total sales for the year of $1.5 million, non-current assets of $150,000, and total assets
$250,000. What is the asset turnover for Hair Corporation?
Asset turnover = Sales / Total Assets
a) 6
b) 16
c) 10
d) 5
148. Company A has just produced 10,000 units at a variable cost of $1.00 per unit and incurred fixed costs of
$10,000. Company A sells the units for $5.00 per unit. They want to know what their Breakeven point is in terms
of units.
a) 2500 units
b) 2000 units
c) 4000 units
d) 3000 units
149. Jerry's Stoves is considering purchasing a manufacturing plant that would better serve their needs but they
want to know what their CAPM would be. They have a risk free rate of 10%, expected market interest rate of 5%,
and the company's stock beta coefficient is .5.
a) 6.5%
b) 7.0%
c) 7.5%
d) 5.7%
150. Water Resources wants to know what their current ratio is and has charged you with task. Their cash and
cash equivalents is $50,575, one bond with a value of $10,000, accounts receivables of $12,500. They also have a
note outstanding currently maturing of $5,000 and accounts payable of $7,225.
a) 5.16 times
b) 0.19 times
c) 0.17 times
d) 5.98 times
151. ExamPrep has sales of $125,000 from 25,000 units at $5 per unit, total costs of $64,750, and variable costs per
unit of $2.
a) 125,000
b) 75,000
c) 50,000
d) 60,250
152. DataRetry Inc. has retained you to figure out what their cost of goods if they have a beginning inventory in the
month of August of 1500 units, business was slow and they only purchased 200 units during the month ended the
month with 1350 units. Each unit cost $10.
a) $17,000
b) $13,500
c) $3,500
d) $6,500
153. FDR Manufacturing produced 10,000 units during the month of September. Standard materials per unit is 2
and actual was 3. The actual units of material cost $3 instead of the standard $2 as well. What is the Material
Efficiency.
a) -20,000
b) 20,000
c) 30,000
d) -30,000
154. FDR Manufacturing produced 10,000 units during the month of September. Standard materials per unit is 2
and actual was 3. The actual units of material cost $3 instead of the standard $2 as well. What is the Material
Price Efficiency.
a) -20,000
b) 20,000
c) -30,000
d) 30,000
155. TLC Solar Power is considering an investment a new solar panel field that will yield two years of cash flows of
year one of $100,000 and $150,000 for year two. The company then plans to sell the solar field but would like to
know what the present value of the investment would be considering they have such a high internal rate of return
of 15%.
The present value of $1 for one periods at 15% is 0.870
The present value of $1 for two periods at 15% is 0.756
The future value of $1 for one period at 15% is 1.150
The future value of $1 for two periods at 15% is 1.323
a) $313,450
b) $113,400
c) $200,400
d) $285,450
156. Water Resources also wants to know what their quick ratio is and has charged you with task. Their cash and
cash equivalents is $50,575, one bond with a value of $10,000, accounts receivables of $12,500 and inventory on
hand of $5,000. They also have a note outstanding currently maturing of $5,000 and accounts payable of $7,225.
a) 5.98 times
b) 0.19 times
c) 6.98 times
d) 5.15 times
157. QM Manufacturing produced 1,000 units during the month of July. Standard labor hours per unit is 2 at $2.50
hour. The actual unit labor hours 1500 hours at $2.75 hour. What is the Labor Efficiency variance.
a) 1250
b) -1250
c) 1000
d) -1000
158. QM Manufacturing produced 1,000 units during the month of July. Standard labor hours per unit is 2 at $2.50
hour. The actual unit labor hours 1500 hours at $2.75 hour. What is the Labor Rate variance.
a) 375
b) -375
c) 1125
d) -1125
BEC Exam Answer Key
I. Corporate Governance
1. (d)
2. (b)
3. (a)
4. (a)
5. (b)
6. (c)
7. (a)
8. (c)
9. (d)
10. (b)
11. (b)
12. (c)
13. (a)
14. (d)
15. (d)
16. (d)
17. (a)
18. (d)
19. (a)
20. (c)
21. (d)
22. (b)
23. (d)
24. (a)
25. (a)
26. (c)
27. (c)
28. (a)
29. (d)
30. (b)
31. (b)
32. (a)
33. (d)
34. (d)
35. (c)
36. (c)
37. (a)
II. Economic Concepts and Analysis
38. (c)
39. (a)
40. (b)
41. (a)
42. (d)
43. (a)
44. (b)
45. (c)
46. (a)
47. (b)
48. (d)
49. (d)
50. (a)
51. (b)
52. (a)
53. (d)
54. (d)
55. (b)
56. (c)
57. (a)
58. (d)
59. (d)
60. (d)
61. (a)
62. (b)
63. (c)
64. (b)
65. (a)
66. (b)
67. (c)
68. (a)
69. (c)
70. (a)
71. (b)
72. (b)
73. (a)
74. (c)
75. (d)
76. (a)
77. (d)
78. (c)
III. Financial Management
79. (b)
80. (c)
81. (a)
82. (d)
83. (d)
84. (a)
85. (b)
86. (c)
87. (a)
88. (b)
89. (b)
90. (d)
91. (d)
92. (b)
93. (c)
94. (b)
95. (c)
96. (d)
97. (c)
98. (a)
IV. Information Systems and Communications
99. (c)
100. (a)
101. (a)
102. (c)
103. (a)
104. (d)
105. (c)
106. (c)
107. (b)
108. (a)
109. (b)
110. (a)
111. (d)
112. (a)
113. (d)
114. (d)
115. (a)
116. (c)
117. (d)
118. (a)
119. (c)
120. (a)
121. (a)
122. (d)
123. (b)
124. (a)
125. (c)
126. (b)
V. Strategic Planning
127. (a)
128. (c)
129. (b)
130. (b)
131. (a)
132. (c)
133. (c)
134. (a)
135. (b)
VI. Operations Management
136. (a)
137. (c)
138. (d)
139. (d)
140. (b)
141. (d)
142. (c)
143. (d)
144. (c)
145. (a)
FORMULAS
146. (d)
147. (a)
148. (a)
149. (c)
150. (d)
151. (b)
152. (c)
153. (a)
154. (c)
155. (c)
156. (a)
157. (a)
158. (b)
Conclusion
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