Question 1

A company has net sales of $4,000,000, operating income of $1,200,000, and net income of $1,000,000. Average total assets are $9,000,000 and average total equity is $7,000,000. What is the company’s return on equity (ROE) and return on assets (ROA)?

Options :

A : ROE is greater than 12%, and ROA is less than 12%.

B : ROE is less than 12%, and ROA is greater than 12%.

C : ROE and ROA are both greater than 12%.

D : ROE and ROA are both less than 12%.

Answer: A

Question 2

Wilson Company uses a comprehensive planning and budgeting system. The proper order for Wilson to prepare certain budget scheduleswould be:

Options :

A : Cost of goods sold, income statement, balance sheet, and statement of cash flows.

B : Cost of goods sold, balance sheet, income statement, and statement of cash flows.

C : Income statement, balance sheet, statement of cash flows, and cost of goods sold.

D : Statement of cash flows, cost of goods sold, income statement, and balance sheet.

Answer: A

Question 3

Which of the following statements is a responsibility for an IMA member regarding the "Integrity" standard of ethical conduct?

Options :

A : To refrain from using confidential information for unethical or illegal advantage.

B : Perform professional duties in accordance with relevant laws, regulations, and technical standards.

C : Provide all relevant information that could reasonably be expected to influence an intended user-s understanding of the reports,analyses, or recommendations.

D : Refrain from engaging in any conduct that would prejudice carrying out duties ethically.

Answer: D

Question 4

Dividends paid to company shareholders would be shown on the statement of cash flows as

Options :

A : operating cash inflows

B : operating cash outflows

C : cash flows from financing activities

D : cash flows from investing activities

Answer: B

Question 5

Mark Tian, a staff accountant, becomes aware of an off-balance sheet bank account where funds have been diverted with offsetting creditsapproved by his immediate supervisor. His immediate supervisor refuses to discuss it and suggests Tian forget about it. Which one of thefollowing should be Tian’s next course of action in this circumstance?

Options :

A : Communicate his concerns confidentially to the company’s independent auditor.

B : Communicate his concerns confidentially to the company’s external legal counsel.

C : Put his concerns in writing to the immediate supervisor and copy the company’s independent auditor.

D : Discuss his concerns with the level of management above the immediate supervisor.

Answer: D