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IIA Business Knowledge for Internal Auditing Sample Questions (Q140-Q145):

NEW QUESTION # 140
What would be the effect if an organization paid one of its liabilities twice during the year in error?

A. Assets and liabilities would be understated
B. Assets net income and owners' equity would be unaffected
C. Assets net income and owners' equity would be understated, but liabilities would be overstated
D. Assets liabilities and owners' equity would be understated

Answer: A

NEW QUESTION # 141
The data below were gathered on two different machine centers and two products.

Which item below would be part of a linear programming formulation of this problem?

A. Subject to: 4A + 5B < 130.
B. Maximize: Contribution > 4A + 5B.
C. Subject to: A < O.
D. Subject to: 2.5A + 4B < 60.

Answer: D

Explanation:
The linear programming solution is subject to constraints on the availability of machine hours in both centers. For example, products A and B require 2.5 and 4 hours per unit, respectively, in Machine Center 1, but only 60 hours are available. Hence, the optimal production of A and B to the following constraint:
2.5 A + 4B < 60

NEW QUESTION # 142
Which of the following types of accounts must be closed at the end of the period?

A. Real accounts.
B. Income statement accounts.
C. Balance sheet accounts.
D. Permanent accounts.

Answer: B

NEW QUESTION # 143
An investment company is attempting to allocate its available funds between two investment alternatives, stocks and bonds, which differ in terms of expected return and risk. The company would like to minimize its risk while earning an expected return of at least 10% and investing no more than 70% in either of the investment alternatives. An appropriate technique for allocating its funds between stocks and bonds is:

A. Capital budgeting.
B. Queuing theory.
C. Differential analysis.
D. Linear programming.

Answer: D

Explanation:
Linear programming is a mathematical technique for planning resource allocation that optimizes a given objective function that is subject to certain constraints. In this case, the maximum investment is constrained by a 70% limit on either investment choice.

NEW QUESTION # 144
Which is the least effective form of risk management?

A. Systems-based detective control.
B. People-based preventive control.
C. People-based detective control.
D. Systems-based preventive control.

Answer: C

NEW QUESTION # 145
......

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