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CPA-Test – Certified Public Accountant Test: Auditing and Attestation, Business Environment and Concepts, Financial Accounting and Reporting, Regulation

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Showing 7–9 of 20 questions

Question 7 (Business Environment and Concept)

The principle measure of non-diversifiable risk included in the CAPM formula is the beta coefficient. The beta coefficient measures the volatility or risk inherent in an investment by:

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    Computing the ratio of changes in earnings per share to changes in sales.
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    Computing the ratio of stock price to earnings per share.
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    Computing the ratio of percentage changes in a stock's price to percentage changes in overall market values during the same period.
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    Computing the ratio of percentage changes in the expected value of alpha equivalents to derivative fluctuations.
Question 8 (Business Environment and Concept)

Gillie, Taft, and Dall are partners in an architectural firm. The partnership agreement is silent about the payment of salaries and the division of profits and losses. Gillie works full-time in the firm, and Taft and Dall each work half time. Taft invested $120,000 in the firm, and Gillie and Dall invested $60,000 each. Dall is responsible for bringing in 50% of the business, and Gillie and Taft 25% each. How should profits of $120,000 for the year be divided?

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    Gillie $60,000, Taft $30,000, Dall $30,000.
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    Gillie $40,000, Taft $40,000, Dall $40,000.
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    Gillie $30,000, Taft $60,000, Dall $30,000.
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    Gillie $30,000, Taft $30,000, Dall $60,000.
Question 9 (Auditing and Attestation)

At December 31, 20X2, ABC Co. had the following balances in selected asset accounts:

ABC also had current liabilities of $1,000 at December 31, 20X2, and net credit sales of $7,200 for the year then ended. What was the average number of days to collect ABC's accounts receivable during 20X2?

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    30.4
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    40.6
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    50.7
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    60.8