# Quiz 7: Perform the Analysis: Diagnostic Analyses

Business

Q 1Q 1

Standard cost is an estimated, or expected, cost of producing a good or service used in management accounting.

Free

True False

True

Q 2Q 2

According to Benford's law, numbers with the first digit "4" are more likely than those with first digit "3".

Free

True False

False

Q 3Q 3

According to the textbook, U.S. businesses will lose 7 percent, on average, of their gross revenues to fraud, with projected losses of more than $7 trillion.

Free

True False

False

Free

True False

Q 5Q 5

If the data analyst hypothesizes that grocery sales are higher when payment is made using credit cards compared to cash payment, the null hypothesis would likely state that grocery sales are lower when payment is made using credit cards compared to cash payment.

Free

True False

Q 6Q 6

The saying "Half the money I spend on advertising is wasted; the trouble is I don't know which half", illustrates the problem with knowing precisely how much value accrues from advertising expenses to sales or the value of the firm.

Free

True False

Q 7Q 7

A realistic expectation an accountant may hold is that "Most accounting transactions are made and recorded during normal work hours and normal workdays".

Free

True False

Q 8Q 8

A realistic expectation an accountant could hold is that each transaction (e.g., cash receipt or cash disbursement) is independent of (not identical to) any other similar transaction.

Free

True False

Q 9Q 9

A realistic expectation an accountant could hold is that each transaction (e.g., cash receipt or cash disbursement) is dependent on any other similar transaction.

Free

True False

Q 10Q 10

A realistic expectation an accountant could hold is that addresses of the company vendors are not similar to that of the company employees.

Free

True False

Q 11Q 11

Diagnostic analytics is performed to investigate the underlying reasons for past results that cannot be answered by simply looking at the descriptive data.

Free

True False

Q 12Q 12

According to Benford's law, what is the expectation for the percentage of times that the first digit of a number is the number "1"?
A) 15.12%
B) 24.58%
C) 35.80%
D) 30.10%

Free

Multiple Choice

Q 13Q 13

What is an example of a cash reconciling item for an item recorded by the bank but not yet recorded in the general ledger?
A) Interest earned on notes held by the bank
B) Outstanding deposits
C) Outstanding checks
D) There are no items recorded by the bank but not recorded in the general ledger.

Free

Multiple Choice

Q 14Q 14

Which cash reconciling item could potentially affect either the bank statement or the general ledger?
A) Recording error
B) Interest earned on notes held by the bank
C) Outstanding deposit
D) NSF checks

Free

Multiple Choice

Q 15Q 15

Which of the following can potentially find a transaction that is recorded twice?
A) Fuzzy matching
B) Test of duplicates
C) Benford's law
D) Sequence check

Free

Multiple Choice

Q 16Q 16

The appropriate test to compare one sample to another sample to see if one is greater than another in some way is called a(n) __________.
A) regression
B) two-sample t-test of a difference in means
C) one-sample t-test of a difference in means
D) chi-squared test of a difference in means

Free

Multiple Choice

Q 17Q 17

__________ is used to help find customers that might have a similar address or name as employees.
A) Duplicate testing
B) Sequence check
C) Benford's law
D) Fuzzy matching

Free

Multiple Choice

Q 18Q 18

In fuzzy matching, if the tolerance for a match is set to 0%, what is the likely consequence for finding potential matches?
A) Too many potential matches
B) Only exactly matches, no potential matches
C) Good mix between exact and potential matches
D) Too few potential matches

Free

Multiple Choice

Q 19Q 19

In fuzzy matching, if the tolerance for a match is set to 100%, what is the likely consequence for finding potential matches?
A) Too many potential matches
B) Only exact matches, no potential matches
C) Good mix between exact and potential matches
D) Too few potential matches

Free

Multiple Choice

Q 20Q 20

Management accounting uses variance analysis to explain what and why something happened in the cost of producing products. It is done by comparing actual outcomes to expected, or standard, costs. What is the expectation when the usage of raw materials unexpectedly decreases below the standard quantity used?
A) Unfavorable price variance
B) Favorable price variance
C) Unfavorable quantity variance
D) Favorable quantity variance

Free

Multiple Choice

Q 21Q 21

Management accounting uses variance analysis to explain what and why something happened in the cost of producing products. It is done by comparing actual outcomes to expected, or standard, costs. What is the expectation when the price of raw materials unexpectedly decreases below the standard price?
A) Unfavorable price variance
B) Favorable price variance
C) Unfavorable quantity variance
D) Favorable quantity variance

Free

Multiple Choice

Q 22Q 22

Where would the company likely get data evaluating the customer with the highest dollar amount of orders in the past month?
A) Customer relationship management system
B) Accounting system
C) Human resources system
D) Supply chain system

Free

Multiple Choice

Q 23Q 23

According to Benford's law, which one of these first digits have a lower probability of occurrence than the first digit "5"?
A) 3
B) 2
C) 4
D) 9

Free

Multiple Choice

Q 24Q 24

Benford's law applies to the ______.
A) first digit only
B) second digit only
C) both the first and second digit
D) neither the first nor second digit

Free

Multiple Choice

Q 25Q 25

Analytics of the inventory item that produces the most profit is an example of the diagnostic analytics of __________.
A) performing drill-down detailed analytics
B) determining relations/patterns/linkages between variables through statistical analysis
C) identifying anomalies/outliers
D) performing descriptive analytics

Free

Multiple Choice

Q 26Q 26

Evaluating the relationship between R&D expenditures and net income is an example of the diagnostic analytics of __________.
A) performing drill-down detailed analytics
B) determining relations/patterns/linkages between variables through statistical analysis
C) identifying anomalies/outliers
D) performing descriptive analytics

Free

Multiple Choice

Q 27Q 27

Performing a bank reconciliation is example of the diagnostic analytics of __________.
A) performing drill-down detailed analytics
B) determining relations/patterns/linkages between variables through statistical analysis
C) identifying anomalies/outliers
D) performing descriptive analytics

Free

Multiple Choice

Q 28Q 28

What is an observation that lies outside its expected distribution?
A) Outlier
B) Unexpected observation
C) Fuzzy matching
D) Management by exception

Free

Multiple Choice

Q 29Q 29

Diagnostic analytics addresses which of the following questions?
A) What happened?
B) Why did it happen?
C) Will it happen in the future?
D) Based on what we expect will happen, how do we optimize?

Free

Multiple Choice

Q 30Q 30

Diagnostic analysis includes all of the possible types of analytics except for which of the following?
A) Identifying anomalies and outliers
B) Performing drill-down detailed analytics
C) Performing marginal analysis
D) Performing statistical analysis

Free

Multiple Choice

Q 31Q 31

Internal controls testing is an example of what type of data analytics?
A) Identifying anomalies and outliers
B) Finding previously unknown linkages, patterns, or relationships between variables
C) Performing marginal analysis
D) Performing descriptive analytics

Free

Multiple Choice

Q 32Q 32

Testing for duplicate transactions is an example of what type of diagnostic analytics?
A) Identifying anomalies and outliers
B) Finding previously unknown linkages, patterns, or relationships between variables
C) Performing marginal analysis
D) Performing descriptive analytics

Free

Multiple Choice

Q 33Q 33

Testing using fuzzy matching is an example of which type of diagnostic analytics?
A) Identifying anomalies and outliers
B) Finding previously unknown linkages, patterns, or relationships between variables
C) Performing marginal analysis
D) Performing descriptive analytics

Free

Multiple Choice

Q 34Q 34

Analyzing the sales journal to find the most profitable product sold is an example of what type of diagnostic analytics?
A) Identifying anomalies and outliers
B) Finding previously unknown linkages, patterns, or relationships between variables
C) Performing marginal analysis
D) Performing descriptive analytics

Free

Multiple Choice

Q 35Q 35

Analyzing relationships between vendors and A/P clerks to find potentially fraudulent relationships is an example of what type of diagnostic analytics?
A) Identifying anomalies and outliers
B) Finding previously unknown linkages, patterns, or relationships between variables
C) Performing marginal analysis
D) Performing descriptive analytics

Free

Multiple Choice

Q 36Q 36

Benford's law follows the distribution:
A) log

_{10}(1 + (1/ d)), where d is each digit 1, 2, and so on B) log_{10}(d + (1/ d)), where d is each digit 1, 2, and so on C) ln_{10}(1 + (1/ d)), where d is each digit 1, 2, and so on D) ln_{10}(d + (1/ d)), where d is each digit 1, 2, and so onFree

Multiple Choice

Q 37Q 37

Commitment to prior investments escalates and makes it harder to abandon prior investments even if it may not make rational sense is called __________ .
A) cost abandonment fallacy
B) sunk cost fallacy
C) commitment cost fallacy
D) committed cost fallacy

Free

Multiple Choice

Q 38Q 38

The test to see if the key number field in a record is in correct ascending or descending order is called a(n) __________ check.
A) order
B) sequence
C) compliance
D) sorting

Free

Multiple Choice

Q 39Q 39

If the data analyst hypothesizes that grocery sales are higher on Sunday than on other days, the null hypothesis would likely state that:
A) Grocery sales are lower or no different on Sunday than on other days.
B) Grocery sales are higher on Sunday than on other days.
C) Grocery sales are higher or no different on Sunday than on other days.
D) Grocery sales are lower on Sunday than on other days.

Free

Multiple Choice

Q 40Q 40

If we are running a regression to analyze the question if advertising expenses are related to sales revenue outcomes, what would be the independent variable?
A) sales revenue
B) advertising expenses
C) cost of goods sold
D) operating expenses

Free

Multiple Choice

Q 41Q 41

Segregation of duties suggests separating all of the following from each other except:
A) Custody of assets
B) Authorization of the use of the assets
C) Recordkeeping
D) Use of the assets

Free

Multiple Choice

Q 42Q 42

In a bank reconciliation, outstanding checks are recorded by the __________, but not yet by the __________.
A) company; bank
B) bank; company
C) vendor; bank
D) bank; vendor

Free

Multiple Choice

Q 43Q 43

In a bank reconciliation, NSF checks are recorded by the __________, but not yet by the __________.
A) company; bank
B) bank; company
C) vendor; bank
D) bank; vendor

Free

Multiple Choice

Q 44Q 44

If the p-value of the chi-square test is __________ than the α (alpha) threshold, we could conclude that the observed relationship is __________ than that expected from Benford's law.
A) greater; greater
B) smaller; smaller
C) smaller; different
D) greater; different

Free

Multiple Choice

Q 45Q 45

The practice of bringing specific issues to the attention of management if they depart from expectation is called __________.
A) anomaly
B) management by exception
C) outlier
D) fuzzy matching

Free

Multiple Choice

Q 46Q 46

The practice of identifying the difference between a budget amount and actual performance is called:
A) anomaly analysis
B) outlier analysis
C) variance analysis
D) management by exception

Free

Multiple Choice

Q 47Q 47

Diagnostic analytics is broken down into all except for which of the following broad categories?
A) Identifying anomalies and outliers
B) Performing drill-down detailed analytics
C) Performing statistical analyses
D) Performing descriptive analytics

Free

Multiple Choice

Q 48Q 48

__________ looks for underlying patterns in the data by examining the data at a more detailed level in order to examine potential correlations.
A) Fuzzy matching
B) Drill-down detailed analytics
C) Summarizing data
D) Descriptive analytics

Free

Multiple Choice

Q 49Q 49

The importance of understanding the root cause of an outlier is to
A) identify potentially fraudulent activity.
B) help management understand favorable variances.
C) help management understand unfavorable variances.
D) All of the items listed.

Free

Multiple Choice

Q 50Q 50

Management accounting uses variance analysis to explain what and why something happened in the cost of producing products. It is done by comparing actual outcomes to expected, or standard, costs. What is the expectation when unplanned overtime is required to complete the job?
A) Unfavorable labor rate variance
B) Favorable labor rate variance
C) Unfavorable price variance
D) Favorable price variance

Free

Multiple Choice