Saylor BUS105 Exam With Confidence Using Practice Dumps

Internal audit reports related to internal controls are typically reviewed by senior management because they involve organization-wide compliance, governance, and financial integrity.

As per Saylor Academy BUS105 – Unit 13: Ethics and Corporate Governance:

“The chief financial officer (CFO) is responsible for financial planning, risk management, and ensuring proper internal controls. The CFO often reviews internal audit reports and communicates results to the board.”

A payroll clerk (A) and plant manager (B) would be responsible for their functional areas but would not be the main recipient of an internal audit committee report.

A managerial accountant (D) may be involved in preparing internal data but does not typically oversee internal control reporting.

Therefore:

Answer: C

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The indirect method starts with net income and adjusts for noncash items and changes in working capital.

As per Saylor Academy BUS105 – Unit 12.2: The Statement of Cash Flows:

“Depreciation and amortization are added back to net income under the indirect method. Increases in current assets (like accounts receivable) are subtracted from net income.”

Thus, applying these rules:

463,000 + 38,500 + 17,950 + 4,000 − 29,900 = 493,550

Answer: B

In differential analysis (also known as incremental analysis), only costs that differ between alternatives (i.e., relevant costs) are considered. Irrelevant costs—those that do not change as a result of the decision—are excluded.

Rent expenses are typically fixed and would not change whether a particular client is dropped or retained. Therefore, rent expenses are irrelevant to the decision and should be excluded from the analysis.

Relevant costs include:

Consulting fees (B) → Variable costs associated with servicing clients.

Wages payable (C) → May vary depending on staffing levels needed for client workload.

Project management costs (D) → If these are client-specific, they would vary and be relevant.

Saylor Academy – Managerial Accounting (BUS105), Unit 7:

“Relevant costs are those that differ between alternatives. Costs that remain the same regardless of the alternative chosen are irrelevant and should not be considered in the decision.”

(Source: Saylor.org – BUS105: Managerial Accounting, Unit 7, Section 7.1: Relevant Revenues and Costs)

Therefore, rent expenses (A) are the correct answer as they are fixed and irrelevant to this client-based decision.

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