QUESTION: 29

Which of the following statements is true regarding partnership liquidation?

Operations can continue after the liquidation, if all partners agree.
Partnership liquidation ends both the legal and economic life of an entity
Partnership liquidation occurs when there is capital deficiency.
When a partnership Is liquidated, each partner pays creditors from cash received

Answer(s): B

Explanation:

Partnership liquidation refers to the process of dissolving a partnership, where all assets are sold, liabilities are paid off, and any remaining assets are distributed among the partners. This process marks the end of the partnership's legal existence and its economic activities. Legal and Economic Termination: Upon liquidation, the partnership ceases to exist legally and economically. This means that it can no longer operate or enter into new business transactions. Asset Distribution: The liquidation process ensures that all assets are sold, and the proceeds are used to pay off any outstanding debts. Any remaining funds are distributed to the partners according to the partnership agreement.
Capital Deficiency: While capital deficiency might prompt liquidation, it is not a defining characteristic of the process.
Creditors Payment: Creditors are paid from the partnership's assets, not directly by the partners unless agreed otherwise or if the assets are insufficient to cover the liabilities.

Reference:

"Fundamentals of Partnership Accounting," which details the steps and consequences of partnership liquidation.

Reveal Solution Next Question

QUESTION: 30

Organizations that adopt just-in-time purchasing systems often experience which of the following?

A slight increase in carrying costs.
A greater need for inspection of goods as the goods arrive
A greater need for linkage with a vendors computerized order entry system.
An Increase in the number of suitable suppliers

Answer(s): C

Explanation:

Just-in-time (JIT) purchasing systems aim to minimize inventory levels by receiving goods only as they are needed in the production process, which requires tight integration with suppliers. Vendor Linkage: JIT systems demand a highly efficient and responsive supply chain. Linking with vendors' computerized order entry systems ensures that orders are processed quickly and accurately, supporting the JIT philosophy.
Inspection: JIT systems often rely on high-quality suppliers to minimize the need for inspection upon arrival, focusing instead on preventive measures at the supplier's end. Carrying Costs: A JIT system typically reduces carrying costs by keeping inventory levels low. Supplier Base: The focus is often on a few reliable suppliers rather than increasing the number of suppliers.

Reference:

"Supply Chain Management: Strategy, Planning, and Operation," which discusses the operational requirements and benefits of JIT systems.

Reveal Solution Next Question

QUESTION: 31

Which of the following statements is true regarding managements use of judgement to design, implement, and conduct internal control?

The use of judgment enhances managements ability to make better decisions about internal control, but cannot guarantee perfect outcomes.
introducing judgment generally diminishes managements ability to make good decisions about internal control
It is inappropriate for management to exercise judgement in areas such as specifying and using suitable accounting principles.
It is inappropriate for management to exercise judgement in assessing whether components are present, functioning, and operating together

Answer(s): A

Explanation:

Management's use of judgment in designing, implementing, and conducting internal control is crucial for adapting to unique circumstances and complexities within an organization. Enhanced Decision-Making: Judgment allows management to tailor controls to the specific risks and operational realities of the organization, improving overall effectiveness. Limitations: While judgment improves decision-making, it cannot eliminate all risks or guarantee perfect outcomes due to inherent uncertainties and limitations in predicting all possible scenarios.

Appropriate Use: It is appropriate for management to use judgment in applying accounting principles and assessing internal controls' presence and functioning. Inappropriateness: It would be incorrect to say that judgment diminishes decision-making capabilities or is inappropriate for assessing internal control components.

Reference:

"Internal Control Integrated Framework" by COSO, which highlights the importance and limitations of judgment in internal control processes.

Reveal Solution Next Question

QUESTION: 32

According to IIA guidance, which of the following corporate social responsibility (CSR) evaluation activities may be performed by the internal audit activity?
1. Consult on CSR program design and implementation
2. Serve as an advisor on CSR governance and risk management.
3. Review third parties for contractual compliance with CSR terms 4 Identify and mitigate risks to help meet the CSR program objectives

1,2, and 3.
1.2. and 4.
1, 3, and 4.
2. 3. and 4.

Answer(s): B

Explanation:

According to the Institute of Internal Auditors (IIA) guidance, internal audit activities can encompass several aspects of evaluating corporate social responsibility (CSR) programs. Consulting on Design and Implementation: Internal auditors can provide valuable insights into the design and implementation of CSR programs to ensure they are well-structured and aligned with organizational objectives.
Advising on Governance and Risk Management: Serving as advisors, internal auditors can help in establishing effective governance structures and identifying and managing risks associated with CSR initiatives.
Mitigating Risks: By identifying and mitigating risks, internal auditors support the achievement of CSR program objectives, ensuring these initiatives are both effective and sustainable. Reviewing Third Parties: While internal auditors may review third parties for contractual compliance with CSR terms, this activity is more often part of broader compliance audits rather than a specific focus area for CSR evaluations.

Reference:

"IIA Practice Guide: Auditing Corporate Social Responsibility," which outlines the role of internal auditors in CSR-related activities.

Reveal Solution Next Question

Free IIA-CHAL-QISA Exam Braindumps (page: 8)

QUESTION: 29

Explanation:

Reference:

QUESTION: 30

Explanation:

Reference:

QUESTION: 31

Explanation:

Reference:

QUESTION: 32

Explanation:

Reference: