Using this Test Bank and Its Features ♦ vii
Using this test bank and its features
In addition to providing a variety of questions related to each chapter objective in the book, this test bank also employs a series of tags that can help design effective, balanced tests and measure course outcomes. All of these tags are included with the question in the test bank, and the chapter objective and difficulty level are also included in a grid at the start of each chapter.
Chapter Objectives and Difficulty
Each question in the test bank is tied to one or more text book objectives using the “Text Objective” field in Examview (OBJ: in the printed bank). In addition, each question has been assigned a difficulty level, based on the following taxonomy. These appear in the “Difficulty” field in Examview (DIF: in the printed bank).
Easy: Knowledge and Recall – Approx. 1 min per question. These types of questions are taken directly out of the text, or cover a very basic concept without requiring any reflective, or critical thinking, or significant analytical processes. Often these questions are conceptual in nature which require recall but do not involve mathematical computation.
Moderate: Comprehension and Analysis – Approx. 1 1/2 – 2 minutes per question. These types of questions relate directly to material covered in the text, but are presented in a format that may be slightly, to moderately, different than the discussion in the text. They may require some analytical process and/or basic mathematical computation, but no critical thinking. These questions could connect two (or more) similar concepts/problems; or require a differentiation of two (or more) dissimilar concepts/problems.
Difficult: Synthesis & Evaluation – Approx. 2 – 3 minutes per question. These types of questions relate indirectly to material provided in the text. They could also include questions which relate directly to material in the text but are presented in a significantly different format. These questions would require more advanced mathematical computations (or multi-step computations) to arrive at the correct answer. They also may require more advanced analytical and/or critical thinking, and reflective thinking skills.
Most questions should require an average 2 minutes a question, theory only, and then add 5 minutes for a range. For instance if there are 15 m/c questions they should require about 30 - 35 minutes. Additional time may be required for questions requiring computations.
An example of this process is identified from Chapter 3:
The cost of borrowing money is known as?
This type of question requires an understanding at the “recall” level. “Easy”.
Accrued revenues result when…..
There were 4 transactions for the student to choose between. This level of question requires an understanding at the “analysis” level. “Moderate”.
Failing to accrue interest expense will result in…..
Each of the choices requires a specific understanding or level of knowledge then the student must compare between each choice and make a judgment about the effect of the transaction on the financial statements (balance sheet and income statement). This type of question requires an understanding at the evaluation or reflective thinking level. “Difficult”.
Most computational questions would be at least the comprehension and analysis level, however not all. The majority of computational questions in this test bank are at the “Moderate” level. Computational questions have been evaluated as follows:
Example 1. Johnson Company had Sales of $150,000 and Cost of Goods Sold was $90,000. Gross Margin would be;
a. 240,000
b. 150,000
c. 90,000
d. 60,000
The answer $60,000 requires just a definitional level of knowledge and would be at the knowledge & recall level of understanding.
Example 2. Johnson Company had sales of $150,000 with a cost of goods sold of 60%. The Gross Margin would be:
The answer would be the same as example 1, but this time the student would need to know the same basic level of knowledge plus would have to know how to compute the Cost of Goods Sold then subtract. As such, the ultimate level of understanding would be at the analysis level. For a Financial Accounting Student this would be at the Moderate level and for an Intermediate level student this would be at the Easy level.
Example 3. Johnson Company had sales this year of $150,000, last year the sales were also $150,000. The cost of goods sold percentage increased this year 10%, to 55%. Which year had the highest gross margin and by how much?
In this case, the basic level of knowledge would still involve knowing the definition of gross margin, but the student would also have to understand how to compute cost of goods sold and gross margin and then evaluate the results. I would feel this question at the Financial Accounting level would be Difficult and at the Intermediate level would be Moderate.
Consistency in the approach to assigning objectives and level of difficulty is of utmost importance. Most multiple choice questions are tied to only one objective. Some of these questions may require knowledge from other objectives in the same chapter or knowledge from previous chapters. The objectives have been chosen based on the most predominant objective(s) being tested. The problems and essay questions often have multiple objectives associated with them. Often, the questions with multiple objectives require a higher level of analysis or critical thinking. The objective and difficulty tags should be viewed only as a guide. Each professor, in developing an exam should make the final judgment about these issues. The ultimate goal is to develop fair exams that will appropriately evaluate the knowledge and performance of the students.
Some professors develop exam strategies where the students can finish everything given. Others may not expect the students to finish and may utilize “curves” to balance out performance. There is no “standard” testing methodology universally used. The method of testing may not be critical, as long the students are provided with learning objectives that are defined and then consistently measured.
Course Outcomes
In addition to chapter objective and difficulty, this test bank is tagged to outcomes created by two bodies that provide curriculum guidance for this course: The Association to Advance Collegiate Schools of Business (AACSB) and The American Institute of Certified Public Accountants (AICPA). These are included in the test bank as follows: AACSB in the “Miscellaneous” field in Examview (MSC: in the printed bank.) and AICPA in the “Topic” field in Examview (TOP in the printed bank).
NOTE: These tags were developed by the publisher and applied based the author of this supplement’s interpretation of AACSB International accreditation standards and AICPA core competencies. The list of tags follows with references to the sources that inspired them with comments about their application.
AACSB: Derived from the AACSB website “The Assurance of Learning Standards. 15. Management of Curricula”
Tags / SkillsAACSB Communication / • Communication abilities.
AACSB Ethics / • Ethical understanding and reasoning abilities.
AACSB Analytic / • Analytic skills.
AACSB Technology / • Use of information technology.
AACSB Diversity / • Multicultural and diversity understanding.
AACSB Reflective Thinking / • Reflective thinking skills.
Multiple-Choice: Computational are mostly AACSB Analytic; other topics fall under AACSB Reflective Thinking.
Problems: Primarily AACSB Analytic, and, if there is a written component or other explanation, the AACSB Communication tag is used.
Essays: Mostly either AACSB Reflective Thinking or AACSB Communication. If there is a comparison type of question then it falls under AACSB Analytic.
AICPA: Derived from the AICPA website.
Copyright © 2005 by the American Institute of Certified Public Accountants, Inc. Reprinted with permission.
Tags / SkillsFunctional Competencies
AICPA FN-Decision Modeling / Individuals preparing to enter the accounting profession must be able to use strategic and critical approaches to decision-making. They must objectively consider issues, identify alternatives, and choose and implement solution approaches in order to deliver services and provide value.
AICPA FN-Leveraging Technology / Technology is pervasive in the accounting profession. Individuals entering the accounting profession must acquire the necessary skills to use technology tools effectively and efficiently. These technology tools can be used both to develop and apply other functional competencies.
AICPA FN-Measurement / Measures used should be both relevant (that is, bear on the decision to be made) and reliable (consistently measure what they purport to measure). Various measurement and disclosure criteria used by accounting professionals—such as GAAP, OCBOA (Other Comprehensive Basis of Accounting) and tax reporting—have been codified to some degree. Other performance measures (such as Economic Value Added) or stated criteria (for example, investment performance) are used for special purposes. Some measurement criteria (such as effectiveness of internal control) are measured qualitatively, rather than quantitatively.
AICPA FN-Reporting / Communicating the scope of work and findings or recommendations is an integral part of a professional service. An accounting professional in public practice might issue an audit or attestation report, recommendations for improved services, or tax or financial planning advice. An accounting professional in business, industry, or government might analyze operations or provide communications to the board of directors. Communicating clearly and objectively the work done and the resulting findings is critical to the value of the professional service. Some forms of communication are governed by professional standards (such as the form and content of the standard auditor's report or the required communications to the audit committees) or law. Others are based on the service applied and the needs of those to whom the accounting professional reports.
AICPA FN-Research / Although accounting professionals need a foundation in standards and other relevant rules, such guidance is constantly evolving. Many accounting profession functions depend on obtaining information from within and outside of an entity. Accordingly, the individual preparing to enter the accounting profession needs to have strong research skills to access relevant guidance or other information, understand it, and apply it.
AICPA FN-Risk Analysis / Risk analysis and control is fundamental to professional service delivery. The identification and management of audit risk (that is, the risk that the auditor will fail to detect a misstatement, caused by inadvertent error or fraud, that is material to financial statements) is the basis for the conduct of a GAAS audit. The understanding of business risk (that is, the risk that an entity—either a client or the prospective accounting professional’s employer—will fail to achieve its objectives) affects how business strategy is created and implemented.
Broad Business Competencies
AICPA BB-Industry / Individuals entering the accounting profession should be able to identify (through research and analysis) the economics and broad business financial risks and opportunities of the industry and economic sector in which a given organization operates. Identification of these risks and opportunities should include both issues specific to the enterprise, as well as those pervasive throughout the industry/sector.
AICPA BB-Global / Individuals entering the accounting profession should be able to identify and communicate the variety of threats and opportunities of doing business in a borderless world. The accounting professional of the future must provide services to support and facilitate commerce in the global marketplace.
AICPA BB-Legal / Regulatory forces are being shaped by collaboration, migration, and reform as the various stakeholders globalize, share information, and force their particular needs and viewpoints onto political agendas. Individuals preparing to enter the accounting profession need to be capable of describing the legal and regulatory environment and analyzing the impact of changes in relevant requirements, constraints, and competitive practices.
AICPA BB-Leveraging Technology / Technology alters how organizations operate. To provide the greatest value, today’s accounting professional must understand and appreciate the effects of technology on the broader business environment.
AICPA-BB-Marketing / Individuals who are marketing- and client- focused are better able to anticipate and meet the changing needs of clients, employers, customers, and markets. This involves both the ability to recognize market needs and the ability to develop new markets.
AICPA BB-Resource Management / The ability to appreciate the importance of all resources is critical for success. Individuals entering the accounting profession should be able to apply management and human resources development theories to human resource issues and organizational problems. Individuals preparing to enter the accounting profession should be able to identify sources of capital, and analyze the impact of participation in the global capital markets.
AICPA BB-Critical Thinking / Critical thinking encompasses the ability to link data, knowledge, and insight together from various disciplines to provide information for decision-making. Being in tune with the “big picture” perspective is a necessary component for success. Individuals entering the accounting profession should be able to communicate to others the vision, strategy, goals, and culture of organizations.
Note: The AICPA also includes Personal competencies not covered in this course.
This text is considered a beginning text for introducing students to basic accounting concepts, decision-making processes and financial statement analysis. As such, the test bank questions are learning objective tags have been assigned with this in mind.
For AACSB evaluation purposes, the vast majority of the Multiple Choice and Problem test bank questions are analytical in nature. Many essay questions are tied to communication skills and ethics issues.
For AICPA evaluation purposes, most all questions are designed to test the following competencies:
Broad Business-Industry
Broad Business-Resource Management
Broad Business-Critical Thinking
Functional-Measurement
Functional-Reporting
The structure of this course does not require much International or Legal Perspectives. Risk Analysis and Research relate more towards specific Accounting, Audit and GAAS.
Robert Martin
Kennesaw State University