CompTIA
Checkpoint
ISC
HP
Dell
EC-Council
EXIN
Fortinet
ITIL®
Juniper
PMI
Microsoft
VMware
Avaya
Google
Salesforce
Amazon
Palo Alto Networks
Certiport
ISC2
All Vendors
  2. Home
  3. Exams
  4. AICPA
  5. CPA-Business

Free CPA-Business Exam Braindumps (page: 46)

Page 46 of 132
PDF with 530 Questions

All of the following are components of the formula used to calculate gross domestic product, except:

  1. Household income.
  2. Foreign net export spending.
  3. Government spending.
  4. Gross investment.

Answer(s): A

Explanation:

Choice "a" is correct. Gross domestic product (GDP) is calculated in two different ways. The first, which is the expenditure approach and can be used to answer this question, is the mnemonic GICE, or government purchases plus private domestic investment plus personal consumption expenditures plus net exports.
Household income is the only one of the answers that is not included in this mnemonic.
Choice "b" is incorrect. Foreign net export spending is included in the mnemonic (E) for GDP; although, it is called simply net exports in the mnemonic and not foreign net export spending.
Choice "c" is incorrect. Government spending is included in the mnemonic (G) for GDP.
Choice "d" is incorrect. Gross investment is included in the mnemonic (I) for GDP, although it is called private domestic investment in the mnemonic.



Gross domestic product includes which of the following measures?

  1. The size of a population that must share a given output within one year.
  2. The negative externalities of the production process of a nation within one year.
  3. The total monetary value of all final goods and services produced within a nation in one year.
  4. The total monetary value of goods and services including barter transactions within a nation in one year.

Answer(s): C

Explanation:

Choice "c" is correct. Gross domestic product (GDP) is the total dollar (monetary) value of all new final products and services produced with the economy in a given time period. The emphasis is on the final goods and services.
Choice "a" is incorrect. The size of a population that must share a given output within one year is not a part of the GDP calculation.
Choice "b" is incorrect. The negative (or positive) externalities of the production process of a nation within one year are not a part of the GDP calculation. In economics, externalities are the effects that the acts of consumers or producers have on each other. Externalities range from technological changes to changes in the range of options available to consumers. Externalities may also be regarded as the unanticipated side effects of courses of action.
Choice "d" is incorrect. The total monetary value of goods and services, including barter transactions, is not a part of the GDP calculation. GDP includes only monetary value, not barter value.



Which of the following is correct regarding the consumer price index (CPI) for measuring the estimated decrease in a company's buying power?

  1. The CPI is measured only once every 10 years.
  2. The products a company buys should differ from what a consumer buys.
  3. The CPI measures what consumers will pay for items.
  4. The CPI is skewed by foreign currency translations.

Answer(s): B

Explanation:

Choice "b" is correct. The consumer price index measures the costs of a market basket of specific goods commonly purchased by consumers. It measures consumer buying power and is not distorted by items generally bought by industry.
Choice "a" is incorrect. The Consumer Price Index (CPI) represents monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services.
Choice "c" is incorrect. The Consumer Price Index measures what has been paid for items, not what consumers will pay for items.
Choice "d" is incorrect. The Consumer Price Index measures what has been paid by consumers in over eighty urban areas in the United States. The amounts paid are denominated in US dollars and would not be skewed by foreign currency translations.



The following table contains ABC Corp.'s quarterly revenues, in thousands, for the past three years. During that time, there were no major changes to ABC's selling strategies and total capital investment.

Which of the following statements best describes the likely cause of the fluctuations in ABC's revenues and the best response to those fluctuations?

  1. The fluctuations are from changes in the economy, and ABC should examine its cost structure for potential changes.
  2. The fluctuations are from changes in the economy, and ABC should manage its inventories and cash flow to match the cycle.
  3. The fluctuations are from the seasonal demand for ABC's products, and ABC should examine its cost structure for potential changes.
  4. The fluctuations are from the seasonal demand for ABC's products, and ABC should manage its inventories and cash flow to match the cycle.

Answer(s): D

Explanation:

Choice "d" is correct. Relatively stable demand over a three year period in each of the first three quarters of the year followed by an increase of between 40 and 50 percent in the final quarter of the year over average sales in the first three quarters in each of the three years presented is indicative of seasonal fluctuations in demand for ABC's product that would require appropriate inventory management.

Choice "a" is incorrect. The consistent volume levels and fluctuation percentages displayed for the activity in each quarter for each year are indicative of changes in seasonal demand rather than changes in the economy generally.
Choice "b" is incorrect. The consistent volume levels and fluctuation percentages displayed for the activity in each quarter for each year are indicative of changes in seasonal demand rather than changes in the economy generally.
Choice "c" is incorrect. Relatively stable demand over a three year period in each of the first three quarters of the year followed by an increase of between 40 and 50 percent in the final quarter of the year over average sales in the first three quarters in each of the three years presented is indicative of seasonal fluctuations in demand for ABC's product. The company should be more attentive to the timing of inventory purchases to meet demand, however, rather than the company's overall cost structure.



Page 46 of 132



Post your Comments and Discuss AICPA CPA-Business exam with other Community members:

Venkatesh commented on September 08, 2023
I don't see Internal Control/Information technology related questions
UNITED STATES
upvote

Jay jain commented on May 25, 2023
This is nice platform
Anonymous
upvote