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A) focuses on estimating future revenues, costs, and other measures to forecast activities and their results
2) Managers use management accounting information to ________ strategy.A) chooseB) communicateC) implementD) All of these answers are correct.
D) All of these answers are correct.
3) Financial accounting: A) focuses on the future and includes activities such as preparing next year's operating budget B) must comply with GAAP (generally accepted accounting principles) C) reports include detailed information on the various operating segments of the business such as product lines or departments D) is prepared for the use of department heads and other employees
B) must comply with GAAP (generally accepted accounting principles)
4) The person most likely to use ONLY financial accounting information is a: A) factory shift supervisor B) vice president of operations C) current shareholder D) department manager
5) Which of the following people is LEAST likely to use management accounting information?A) the controllerB) a shareholder evaluating a stock investment C) the treasurerD) an assembly department supervisor
B) a shareholder evaluating a stock investment
6) Financial accounting provides the primary source of information for: A) decision making in the finishing department B) improving customer service C) preparing the income statement for shareholders D) planning next year's operating budget
C) preparing the income statement for shareholders
7) Which of the following descriptors refers to management accounting information? A) It is verifiable and reliable. B) It is driven by rules. C) It is prepared for shareholders. D) It provides reasonable and timely estimates.
D) It provides reasonable and timely estimates.
8) Which of the following statements refers to management accounting information? A) There are no regulations governing the reports. B) The reports are generally delayed and historical. C) The audience tends to be stockholders, creditors, and tax authorities. D) It primarily measures and records business transactions.
A) There are no regulations governing the reports.
9) Which of the following groups would be LEAST likely to receive detailed management accounting reports? A) stockholders B) sales representatives C) production supervisors D) managers
10) Management accounting information includes: A) tabulated results of customer satisfaction surveys B) the cost of producing a product C) the percentage of units produced that are defective D) All of these answers are correct.
D) All of these answers are correct.
11) Cost accounting: A) provides information on the efficiency of factory labor B) provides information on the cost of servicing commercial customers C) provides information on the performance of an operating division D) All of these answers are correct.
D) All of these answers are correct.
12) Which of the following types of information are used in management accounting? A) financial information B) nonfinancial information C) information focused on the long term D) All of these answers are correct.
D) All of these answers are correct.
13) Modern cost accounting plays a role in: A) planning new products B) evaluating operational processes C) controlling costs D) All of these answers are correct.
D) All of these answers are correct.
14) A data warehouse or infobarn: A) is reserved for exclusive use by the CFO B) is primarily used for financial reporting purposes C) stores information used by different managers for multiple purposes D) gathers only nonfinancial information
C) stores information used by different managers for multiple purposes
5) Cost accounting provides all of the following EXCEPT: A) information for management accounting and financial accounting B) pricing information from marketing studies C) financial information regarding the cost of acquiring resources D) nonfinancial information regarding the cost of operational efficiencies
B) pricing information from marketing studies
16) Management accounting includes all of the following EXCEPTA) implementing strategies B) developing budgets C) preparing special studies and forecasts D) preparing the statement of cash flows
D) preparing the statement of cash flows
17) Financial accounting is concerned primarily with: A) external reporting to investors, creditors, and government authorities B) cost planning and cost controls C) profitability analysis D) providing information for strategic and tactical decisions
A) external reporting to investors, creditors, and government authorities
18) Financial accounting provides a historical perspective, whereas management accounting emphasizes: A) the future B) past transactions C) a current perspective D) reports to shareholders
19) An Enterprise Resource Planning System can best be described as: A) a collection of programs that use a variety of unconnected databases B) a single database that collects data and feeds it into applications that support each of the company's business activities, such as purchases, production, distribution, and sales C) a database that is primarily used by a purchasing department to determine the correct amount of a particular supply item to purchase D) a sophisticated means of linking two or more companies to facilitate their planning processes
B) a single database that collects data and feeds it into applications that support each of the company's business activities, such as purchases, production, distribution, and sales
20) The approaches and activities of managers in short-run and long-run planning and control decisions that increase value for customers and lower costs of products and services are known as: A) value chain management B) enterprise resource planning C) cost management D) customer value management
TRUE FALSE21) Management accounting information focuses on external reporting.
Answer: FALSEExplanation: Management accounting information focuses on internal reporting.
TRUE FALSE22) Cost management is narrowly focused on a continuous reduction of costs.
Answer: FALSEExplanation: Cost management is broadly focused to provide information that helps managers at all levels implement, monitor, and evaluate company strategies.
TRUE FALSE23) Managers always require the information in an accounting system to be presented in the same format.
Answer: FALSEExplanation: Individual managers often require the information in an accounting system to be presented or reported differently.
TRUE FALSE24) Modern cost accounting takes the perspective that collecting cost information is a function of the management decisions being made.
TRUE FALSE25) The balance sheet, income statement, and statement of cash flows are used for financial accounting, and also for management accounting.
TRUE FALSE26) Financial accounting is broader in scope than management accounting.
Answer: FALSEExplanation: Management accounting is broader in scope than financial accounting.
TRUE FALSE27) Cost accounting measures and reports short-term, long-term, financial, and non financial information.
TRUE FALSE28) Cost management provides information that helps increase value for customers.
TRUE FALSE29) Management accounting has to strictly follow the rules of generally accepted accounting principles for the purposes of measurement and reporting.
Answer: FALSEExplanation: Internal measures and reports do not have to follow GAAP.
TRUE FALSE30) An ideal database should store information in a way that allows different managers to access the information they need.
TRUE FALSE31) An Enterprise Resource Planning (ERP) System is a single database that collects data and feeds into applications that support each of the company's business activities, such as purchases
TRUE FALSE32) Cost accounting provides information only for management accounting purposes.
Answer: FALSEExplanation: Cost accounting provides information for financial accounting as well as for management accounting purposes.
TRUE FALSE33) Cost management involves long-term and short-term decisions that attempt to increase value for customers and lower costs of products or services.
34) For each report listed below, identify whether the major purpose of the report is for (1) routine internal reporting, (2) nonroutine internal reporting, or for (3) external reporting to investors and other outside parties.Item:a. study detailing sale information of the top-ten selling productsb. weekly report of total sales generated by each store in the metropolitan areac. annual Report sent to shareholdersd. monthly report comparing budgeted sales by store to actual sales
Answer: a. study detailing sale information of the top-ten selling products - (2) nonroutine internal reportingb. weekly report of total sales generated by each store in the metropolitan area - (1) routine internal reportingc. annual Report sent to shareholders - (3) external reporting to investors and other outside partiesd. monthly report comparing budgeted sales by store to actual sales - (1) routine internal reporting
1) Which of the following statements concerning an organization's strategy is NOT true? A) Strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives. B) Management accountants provide input to help managers formulate strategy. C) A good strategy will always overcome poor implementation. D) Businesses usually follow one of two broad strategies: offering a quality product at a low price, or offering a unique product or service priced higher than the competition.
C) A good strategy will always overcome poor implementation.
2) Strategy specifies: A) how an organization matches its own capabilities with the opportunities in the marketplace B) standard procedures to ensure quality products C) incremental changes for improved performance D) the demand created for products and services
A) how an organization matches its own capabilities with the opportunities in the marketplace
3) Which of the following is NOT one of the questions management accountants might attempt to help answer in the formulation of strategy? A) Who are our most important customers? B) What substitute products exist in the marketplace? C) Does the strategy comply with GAAP (Generally Accepted Accounting Principles)? D) Will adequate cash be available to implement the strategy?
C) Does the strategy comply with GAAP (Generally Accepted Accounting Principles)?
4) Strategy is formulated by answering all of the following EXCEPT: A) Who are our most important customers? B) Is industry demand growing or shrinking? C) Will our external auditors certify our strategy? D) How sensitive are purchasers to price, quality, and service?
C) Will our external auditors certify our strategy?
5) In designing strategy, a company must match the opportunities and threats in the marketplace with: A) those of the CFO (Chief Financial Officer) B) its resources and capabilities C) branding opportunities D) capabilities of current suppliers
B) its resources and capabilities
6) Which of the following statements about customer value is NOT true? A) Customer value is shown in a corporation's balance sheet. B) Creating value for customers is an important part of planning and implementing strategy. C) How our product delivers customer value should be determined as part of a company's strategy formulation. D) It is possible to simultaneously lower cost and increase customer value.
A) Customer value is shown in a corporation's balance sheet.
TRUE FALSE7) Strategy does NOT specify how an organization matches its capabilities with the opportunities in the marketplace.
Answer: FALSEExplanation: Strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives.
TRUE FALSE8) Southwest Airlines is an example of a company that pursues a product differentiation strategy.
Answer: FALSEExplanation: Southwest Airlines pursues a cost leadership strategy.
TRUE FALSE9) The best-designed strategies are valuable whether or not they are effectively implemented.
Answer: FALSEExplanation: Implementation is essential or the strategy is useless.
10) The key to a company's success is creating value for customers while differentiating itself from its competitors.
TRUE FALSE11) The key to a company's success is always to be the low cost producer in a particular industry.
Answer: FALSEExplanation: The low cost producer in a particular industry will not necessarily be successful.
TRUE FALSE12) Companies generally follow one of two basic strategies: 1) providing a quality product or service at low prices, or 2) offering a unique product or service often priced higher than competing products.
TRUE FALSE13) Management accountants should have little or no role in deciding on a company's strategy.
Answer: FALSEExplanation: Management accountants should play a significant role in deciding on a company's strategy.
TRUE FALSE14) Companies can decide on an appropriate strategy based strictly on internally available information.
Answer: FALSEExplanation: Companies must obtain external information as well as internal information to decide on an appropriate strategy.
15) Strategic cost management describes cost management that specifically focuses on strategic issues.
TRUE FALSE16) Identifying a company's most important customers does NOT help formulate strategy.
Answer: FALSEExplanation: Management accountants help formulate strategy by helping managers answer questions such as "Who are our most important customers, and how do we deliver value to them?"
TRUE FALSE17) The best-designed strategies and the best-developed capabilities are useless unless they are effectively executed.
1) Place the four business functions in the order they appear along the value chain: Customer service Design Marketing Production A) Customer Service, Design, Production, Marketing B) Customer Service, Marketing, Production, Design C) Design, Production, Marketing, Customer ServiceD) Design, Customer Service, Production, Marketing
C) Design, Production, Marketing, Customer Service
2) R&D, production, and customer service are business functions that are all included as part of: A) the value chain B) benchmarking C) marketing D) the supply chain
3) The value chain is the sequence of business functions in which: A) value is deducted from the products or services of an organization B) value is proportionately added to the products or services of an organization C) products and services are evaluated with respect to their value to the supply chain D) usefulness is added to the products or services of an organization
D) usefulness is added to the products or services of an organization
4) ________ is the generation of, and experimentation with, ideas related to new products, services, or processes. A) Research and development B) Design of products, services, or processes C) Production D) Marketing
A) Research and development
5) ________ is the detailed planning and engineering of products, services, or processes. A) Distribution B) Design of products, services, or processes C) Production D) Marketing
B) Design of products, services, or processes
6) ________ is the acquisition, coordination, and assembly of resources to produce a product or deliver a service. A) Research and development B) Customer service C) Production D) Marketing
7) ________ is the manner by which companies promote and sell their products or services to customers or perspective customers. A) Distribution B) Customer service C) Research and development D) Marketing
8) ________ is the delivery of products or services to customers. A) Distribution B) Customer service C) Production D) Design of products, services, or processes
9) ________ is the after-sale support provided to customers. A) Distribution B) Customer service C) Production D) Marketing
10) ________ is a strategy that integrates people and technology in all business functions to enhance relationships with customers, partners, and distributors.A) Supply-chain analysisB) Customer relationship managementC) Value-chain analysisD) Continuous quality improvement
B) Customer relationship management
11) Customer relationship management initiatives use technology to coordinate all:A) production activitiesB) research activitiesC) customer-facing activitiesD) inventory management activities
C) customer-facing activities
12) ________ describe(s) the flow of goods, services, and information from the purchase of materials to the delivery of products to consumers, regardless of whether those activities occur in the same organization or with other organizations. A) Supply chain B) Key success factors C) Continuous improvement D) Customer focus
13) Processing orders and shipping products or services to customers (alsocalled outbound logistics) is also known asA) customer focus B) distributionC) marketingD) supply chain
14) ________ is a philosophy in which management improves operations throughout the value chain to deliver products and services that exceed customer expectations.A) Cost-benefit approachB) Customer focusC) Customer relationship managementD) Total quality management
D) Total quality management
15) Which item is NOT an area that customers want to see improved levels of performance in?A) innovationB) qualityC) cost and efficiencyD) profit
16) Which of the following statements about a company's supply chain is true? A) A company's supply chain is always internal to a firm. B) A company's supply chain is always external to a firm. C) A company's supply chain is the same thing as a company's value chain. D) Management accountants provide information to enhance a company's supply chain.
D) Management accountants provide information to enhance a company's supply chain.
17) ________ describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same organization or in other organizations.A) The value chainB) The supply chainC) Product differentiationD) Distribution
18) Whose perceptions of the company's products or services are the most important to the manager? A) board of directors' perception B) customers' perception C) president's perception D) stockholders' perception
19) ________ aims to improve operations throughout the value chain and to deliver productsand services that exceed customer expectations.A) Total Quality Management B) InnovationC) Customer response timeD) Cost and efficiency
A) Total Quality Management
20) Customers are demanding improved performance related to: A) reduced costs B) both reduced costs and increased quality C) lower costs, improved quality, and improved customer service D) All of these answers are correct.
D) All of these answers are correct.
21) Customer response time involves: A) the speed it takes a customer to respond to an advertisement and place an order B) the speed at which an organization responds to customer requests C) the speed it takes to develop a new product D) the speed it takes an organization to develop a Total Quality Management (TQM) program
B) the speed at which an organization responds to customer requests
22) Which of the following is NOT a way for a company to improve customer response time? A) Increase capacity of bottleneck operations. B) Purchase material in larger quantities. C) Use faster delivery procedures. D) Produce the product more quickly.
B) Purchase material in larger quantities.
True or False23) The supply chain refers to the sequence of business functions in which customer usefulness is added to products or services.
Answer: FALSEExplanation: The value chain refers to the sequence of business functions in which customer usefulness is added to products or services.
True or False24) An effective way to cut costs is to eliminate activities that do NOT improve the product attributes that customers value.
True or False25) For optimal planning success it is best if each business function within the value chain is performed one at a time in sequence.
Answer: FALSEExplanation: Optimally, success is achieved when two or more of the individual business functions work concurrently as a team.
True or False26) For best results, cost management emphasizes independently coordinating supply chain activities within your company and with other companies that act as suppliers and customers
True or False27) Technological innovation has led to longer product-life cycles and lessened the need to bring new products to market more rapidly.
Answer: FALSEExplanation: Technological innovation has led to shorter product-life cycles and increased the need to bring new products to market more rapidly
True or False28) Key success factors include cost, quality, timeliness, and innovation
True or False29) Customers are demanding increased levels of performance in all aspects of the value chain and the supply chain.
True or False30) The supply chain describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers
Answer: FALSEExplanation: The value chain describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers
True or False31) The supply chain always occurs within a single organization.
Answer: FALSEExplanation: The supply chain can include organizations external to a single organization.
True or False32) Distribution refers to promoting and selling products or services to customers or prospective customers.
Answer: FALSEExplanation: Marketing refers to promoting and selling products or services to customers or prospective customers.
True or False33) The production component of the value chain refers detailed planning, engineering, and testing of products and processes.
Answer: FALSEExplanation: The design of products, services, and processes component of the value chain refers detailed planning, engineering, and testing of products and processes.
True or False34) Management accountants might provide information on decisions on whether to buy a product from outside or manufacture it in-house.
True or False35) Key success factors are geared to improving customer satisfaction.
True or False36) Value chain refers to its value to the employee.
Answer: FALSEExplanation: Value chain refers to its value to the customer.
True or False37) Companies have to follow strict guidelines when designing a management accounting system.
Answer: FALSEExplanation: The design of a management accounting system should be guided by the challenges facing managers.
True or False38) Tracking what is happening in other companies is illegal.
Answer: FALSEExplanation: Tracking what is happening in other companies alerts managers to changes in their industry and can be accomplished in many legal ways such as visiting competitor's Web sites and reviewing their financial statements.
True or False39) Increased global competition is placing pressure on companies to reduce costs.
True or False40) The increasing pace of technological innovation has resulted in shorter product life cycles.
Answer: TRUEExplanation: The increasing pace of technological information has resulted in shorter product lifecycles.
True or False41) A bottleneck occurs when the work to be performed exceeds the available capacity.
42) Classify each cost item into one of the business functions of the value chain, either (1) R&D, (2) design, (3) production, (4) marketing, (5) distribution, or (6) customer service.Item:a. cost of samples mailed to promote sales of a new product
42) Classify each cost item into one of the business functions of the value chain, either (1) R&D, (2) design, (3) production, (4) marketing, (5) distribution, or (6) customer service.Item:b. labor cost of workers in the manufacturing plant
42) Classify each cost item into one of the business functions of the value chain, either (1) R&D, (2) design, (3) production, (4) marketing, (5) distribution, or (6) customer service.Item:c. bonus paid to a person with a 90% satisfaction rating in handling customers with complaints
42) Classify each cost item into one of the business functions of the value chain, either (1) R&D, (2) design, (3) production, (4) marketing, (5) distribution, or (6) customer service.Item:d. transportation costs for shipping products to retail outlets
43) Classify each cost item of Ripon Printers into one of the business functions of the value chain, either (1) R&D, (2) design, (3) production, (4) marketing, (5) distribution, or (6) customer service.Item:a. cost of customer order forms
43) Classify each cost item of Ripon Printers into one of the business functions of the value chain, either (1) R&D, (2) design, (3) production, (4) marketing, (5) distribution, or (6) customer service.Item:b. cost of paper used in manufacture of books
43) Classify each cost item of Ripon Printers into one of the business functions of the value chain, either (1) R&D, (2) design, (3) production, (4) marketing, (5) distribution, or (6) customer service.Item:c. cost of paper used in packing cartons to ship books
43) Classify each cost item of Ripon Printers into one of the business functions of the value chain, either (1) R&D, (2) design, (3) production, (4) marketing, (5) distribution, or (6) customer service.Item:d. cost of paper used in display at national trade show
43) Classify each cost item of Ripon Printers into one of the business functions of the value chain, either (1) R&D, (2) design, (3) production, (4) marketing, (5) distribution, or (6) customer service.Item:e. depreciation of trucks used to transport books to college bookstores
43) Classify each cost item of Ripon Printers into one of the business functions of the value chain, either (1) R&D, (2) design, (3) production, (4) marketing, (5) distribution, or (6) customer service.Item:f. cost of the wood used to manufacture paper
43) Classify each cost item of Ripon Printers into one of the business functions of the value chain, either (1) R&D, (2) design, (3) production, (4) marketing, (5) distribution, or (6) customer service.Item:g. salary of the scientists attempting to find another source of printing ink
g. (1) research and development
43) Classify each cost item of Ripon Printers into one of the business functions of the value chain, either (1) R&D, (2) design, (3) production, (4) marketing, (5) distribution, or (6) customer service.Item:h. cost of defining the book size so that a standard-sized box is filled to capacity
1) Place the five steps in the decision-making process in the correct order: A = Obtain information B = Make decisions by choosing among alternatives C = Identify the problem and uncertainties D = Implement the decision E = Make predictions about the futureA) C D B E AB) E D A B CC) C A E B DD) A E B D C
2) Planning consists of all of these areas EXCEPT:A) selecting organizational goalsB) deciding how to attain the desired goalsC) evaluating performanceD) predicting results under various alternatives
C) evaluating performance
3) The most important planning tool is a ________.A) performance evaluation reportB) balanced scorecardC) goalD) budget
4) A report showing the actual financial results for a period compared to the budgeted financial results for that same period would most likely be called a: A) strategic plan B) management forecast C) performance report D) revised plan
5) The process of preparing a budget: A) forces coordination and communication across business functions B) increases accounting efficiencies C) reduces overcapacity D) promotes production automation
A) forces coordination and communication across business functions
6) Planning includes all of the following EXCEPTA) identifying the problem and uncertainties.B) obtaining information.C) providing feedback to help with future decision making.D) making predictions about the future.
C) providing feedback to help with future decision making.
7) A budget: A) is a quantitative expression of a proposed management plan B) helps translate strategy into actions C) aids in the coordination and communication among various business functions D) All of these answers are correct.
D) All of these answers are correct
8) A budget can serve as: A) a planning toolB) a control tool C) a basis for preparing financial statements D) a planning and control tool
D) a planning and control tool
9) Employees ________ how their performance is measured. A) pay close attention to B) pay no attention to C) rarely know D) None of the above are correct.
A) pay close attention to
10) Linking rewards to performance: A) helps to motivate managers B) allows companies to charge premium prices C) should only be based on financial information D) All of these answers are correct
A) helps to motivate managers
11) Control measures should: A) be set and not changed until the next budget cycle B) be flexible to allow for employees who are slackers C) be kept confidential from employees so that competitors don't have an opportunity to gain a competitive advantage D) be linked by feedback to planning
D) be linked by feedback to planning
12) A well-conceived plan allows managers the ability to: A) not make decisions again until the next planning session B) keep lower-level managers from implementing change C) underestimate costs so that actual operating results will be favorable when comparisons are made D) take advantage of unforeseen opportunities
D) take advantage of unforeseen opportunities
13) Which of the following statements concerning performance reports is NOT correct? A) The performance report shows actual performance as compared to the budget. B) The performance report is a feedback tool. C) The performance report often leads to more investigations and action. D) The performance report contains no actual results due to confidentiality.
D) The performance report contains no actual results due to confidentiality.
14) Management accounting is considered most likely to be successful when it: A) helps creditors evaluate the company's performance B) helps investors improve their decisions C) is timely D) is relevant and reported annually
True or False15) The last step in the decision-making process is to make decisions by choosing among alternatives.
Answer: FALSEExplanation: The last step in the decision-making process is to implement the decision, evaluate performance, and learn.
True or False16) One of the steps in planning is making predictions about the future.
True or False17) It is difficult to control activities without a budget.
True or False18) To take advantage of changing market opportunities, the annual budget should be strictly enforced.
Answer: FALSEExplanation: To take advantage of changing market opportunities, the annual budget should be updated to reflect those changes
True or False19) A budget is a quantitative expression of a plan.
True or False20) The process of preparing a budget forces coordination and communication throughout the company.
True or False21) Linking rewards to performance is a major deterrent to good management performance.
Answer: FALSEExplanation: Linking rewards to performance helps to motivate good management performance.
True or False22) Employees pay little attention to how their performance is measured.
Answer: FALSEExplanation: Employees are very aware of how their performance is measured.
True or False23) A budget may be used as a planning tool, but NOT as a control tool.
Answer: FALSEExplanation: A budget may be used as a planning tool and also as a control tool.
True or False24) Financial accounting reports financial and non financial information that helps managers implement company strategies.
Answer: FALSEExplanation: Management accounting reports financial and nonfinancial information that helps managers implement company strategies.
True or False25) Feedback and learning helps in the future decision-making process.
True or False26) Control includes deciding what feedback to provide that will help with future decision making.
True or False27) When a particular aspect of employee performance is measured, employees pay more attention to it.
True or False28) A performance report compares actual performance to the amount budgeted.
True or False29) Management accounting is playing an increasingly important role by helping managers develop and implement strategy.
1) Which item is NOT a guideline used by management accountants to assist in strategic and operational decision making?A) cost-benefit approachB) behavioral and technical considerationsC) different costs for different purposesD) balanced scorecard
2) The scenario that resources should be spent if the expected benefits to the company exceed the expected costs describes:A) cost-benefit approachB) behavioral and technical considerationsC) balanced scorecardD) different costs for different purposes
3) The act of simply measuring and reporting information: A) focuses the attention of employees on those processes B) diverts employee's attention to other activities C) disproves the saying "What gets measured gets managed." D) has no effect on employee behavior
A) focuses the attention of employees on those processes
4) Which statement is true? A) Management is primarily a technical activity.B) People do not react to measurements. C) Employees spend more attention on those variables that are getting measured. D) Resources should be spent if the expected benefits to the company are less than the expected costs.
C) Employees spend more attention on those variables that are getting measured.
5) The primary criterion when faced with a resource allocation decision is: A) cost minimization B) reduction in the amount of time required to perform a particular job C) achievement of organizational goals D) how well the alternative options help achieve organizational goals in relation to the costs incurred for these systems
D) how well the alternative options help achieve organizational goals in relation to the costs incurred for these systems
6) Which of the following statements about the cost-benefit approach is true? A) Resources should be spent if they are expected to better attain company goals in relation to the expected costs of these resources. B) In a cost-benefit analysis, both costs and benefits are easy to obtain. C) Resources should be spent if the costs of a decision outweigh the benefits of the decision. D) A cost-benefit approach would not be appropriate for a decision to install a budget system or not.
A) Resources should be spent if they are expected to better attain company goals in relation to the expected costs of these resources.
True or False7) It is generally easy to quantify expected benefits and costs when applying the cost-benefit approach.
Answer: FALSEExplanation: It is challenging and generally costly to quantify expected benefits and costs when applying the cost-benefit approach.
True or False8) The technical considerations of budgeting encourage managers and other employees to strive for achieving the goals of the organization.
Answer: FALSEExplanation: The behavioral considerations of budgeting encourage managers and other employees to strive for achieving the goals of the organization.
True or False9) A cost concept used for external reporting purposes may not be appropriate for internal, routine reporting to managers.
True or False10) Accounting method for internal reporting purposes are specified by Generally Accepted Accounting Principles (GAAP).
Answer: FALSEExplanation: Accounting methods for internal reporting are not specified by Generally Accepted Accounting principles (GAAP)
1) The person(s) directly responsible for attaining of organizational objectives is/are: A) the treasurer B) line management C) the controller D) the chief financial officer
2) The person(s) responsible for providing advice and assistance to line managers is/are:A) the controllerB) the chief financial officerC) staff managementD) the treasurer
3) ________ includes providing financial information for reports to managers and shareholders, and overseeing the overall operations of the accounting system.A) Internal auditB) External auditC) ControllershipD) Treasury
4) ________ includes banking and short- and long-term financing, investments, andcash management. A) Risk managementB) Internal auditC) ControllershipD) Treasury
5) Line management includes: A) manufacturing managers B) human-resource managers C) information-technology managers D) management-accounting managers
A) manufacturing managers
6) Staff management includes: A) manufacturing managers B) human-resource managers C) purchasing managers D) distribution managers
B) human-resource managers
7) Responsibilities of a CFO include all of the following EXCEPT:A) providing financial reports to shareholders B) managing short-term and long-term financing C) investing in new equipment D) preparing federal, state, and international tax returns
C) investing in new equipment
8) The ________ is primarily responsible for management accounting and financial accounting. A) COO (Chief Operating Officer) B) CIO (Chief Information Officer) C) treasurer D) controller
9) All of the following report to the CFO EXCEPT the: A) controller B) tax department manager C) production manager D) treasurer
10) Examples of the controller's functions include all EXCEPT:A) operations administrationB) budgetingC) investor relationsD) general ledger
11) Long term financing is an integral part of the ________ function in an organization. A) treasurer's B) controller's C) internal audit D) president's
True or False12) Line management is directly responsible for attaining the goals of the organization.
True or False13) Staff management should NOT provide advice and assistance to line management.
Answer: FALSEExplanation: Management accountants, and human-resources managers are examples of staff management.
True or False14) Treasury includes banking and short- and long-term financing, investments, and cash management
True or False15) The controller is usually responsible for banking, short- and long-term financing, investments, and cash management.
True or False16) The controller (also called the chief accounting officer) is the financial executive primarily responsible for both management accounting and financial accounting.
True or False17) An external audit includes reviewing and analyzing financial and other records to attest to the integrity of the organization's financial reports and to adherence to its policies and procedures
Answer: FALSEExplanation: Internal audit includes reviewing and analyzing financial and other records to attest to the integrity of the organization's financial reports and to adherence to its policies and procedures.
True or False18) The controller is generally a staff position.
True or False19) Management accountants must have behavioral and interpersonal skills.
1) Which of the following issues is NOT addressed by the Sarbanes-Oxley legislation?A) improving internal controlB) corporate governanceC) disclosure practices of public corporationsD) disclosure practices of private companies
D) disclosure practices of private companies
2) The Standards of Ethical Conduct for management accountants include concepts related to: A) competence, performance, integrity, and reporting B) competence, confidentiality, integrity, and credibilityC) experience, integrity, reporting, and objectivity D) None of these answers are correct.
B) competence, confidentiality, integrity, and credibility
3) Which item is NOT an indication of competence under the Standards of Ethical Conduct?A) Maintain an appropriate level of professional expertise by continually developing knowledge and skills.B) Keep information confidential except when disclosure is authorized or legally required.C) Perform professional duties in accordance with relevant laws, regulations, and technical standards.D) Provide decision support information and recommendations
B) Keep information confidential except when disclosure is authorized or legally required.
4) Which item is NOT an indication of confidentiality under the Standards of Ethical Conduct?A) Keep information confidential except when disclosure is authorized or legally required.B) Inform all relevant parties regarding appropriate use of confidential information.C) Refrain from using confidential information for unethical or illegal advantage.D) All of the above indicate confidentiality
D) All of the above indicate confidentiality.
5) Which item is an indication of integrity under the Standards of Ethical Conduct?A) Refrain from engaging in any conduct that would prejudice carrying out duties ethically.B) Communicate information fairly and objectively.C) Keep information confidential except when disclosure is authorized or legally required.D) Recognize and communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity.
A) Refrain from engaging in any conduct that would prejudice carrying out duties ethically.
6) Which item is an indication of credibility under the Standards of Ethical Conduct?A) Maintain an appropriate level of professional expertise by continually developing knowledge and skills.B) Refrain from using confidential information for unethical or illegal advantage.C) Abstain from engaging in or supporting any activity that might discredit the profession.D) Disclose delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law.
D) Disclose delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law.
7) Ethical challenges for management accountants include: A) whether to accept gifts from suppliers, knowing it is an effort to indirectly influence decisions B) whether to report unfavorable department information that may result in unfavorable consequences for a friend C) whether to file a tax return this year D) Both A and B are correct.
D) Both A and B are correct
8) Which of the following actions should a management accountant take first in confronting a potential ethical conflict concerning your direct supervisor? A) Inform the Board of Directors of the existence of a potential conflict. B) Confront the supervisor directly. C) Discuss the situation with your supervisor's direct supervisor. D) Review your organization's procedures concerning resolution of such a conflict.
D) Review your organization's procedures concerning resolution of such a conflict.
9) If there is an ethical conflict concerning your direct supervisor, you may contact all of the following groups EXCEPT:A) local mediaB) audit committeeC) executive committeeD) board of directors
10) If there is an ethical conflict concerning your direct supervisor, when is it appropriate to contact authorities or individuals NOT employed by the organization?A) when there is a personal conflictB) when your supervisor is about to receive a bonusC) when there is a clear violation of the lawD) when you are about to be terminated
C) when there is a clear violation of the law
True or False11) Credibility includes maintaining an appropriate level of professional expertise by continually developing knowledge and skills.
Answer: FALSEExplanation: Competence includes maintaining an appropriate level of professional expertise by continually developing knowledge and skills.
True or False12) The Sarbanes-Oxley legislation does NOT provide a process for employees to report violations of illegal and unethical acts.
Answer: FALSEExplanation: This legislation does provide employees with the right to report violations.
True or False13) Management accountants have important ethical responsibilities that are related to competence, confidentiality, integrity, and credibility.
True or False14) A managerial accountant should NOT disclose confidential information to an outside party (such as a newspaper) unless legally obligated to do so.
True or False15) If a managerial accountant were NOT keeping up with current developments in managerial accounting, that behavior might violate a competence standard of professional ethical behavior.
True or False16) If a managerial accountant suspected his or her immediate superior of wrongdoing, the managerial accountant should request an immediate meeting with the Board of Directors.
Answer: FALSEExplanation: If a managerial accountant suspected his or her immediate superior of wrongdoing, the managerial accountant should first present the situation to the next higher managerial level.
True or False17) The Institute of Management Accountants provides a hotline to discuss ethical issues.
True or False18) When faced with a potential ethical conflict, the managerial accountant should first consult any internal procedures of that organization.
True or False19) When confronted with a potential ethical conflict, a managerial accountant should not contact his or her personal attorney concerning rights and obligations.
Answer: FALSEExplanation: When confronted with a potential ethical conflict, a managerial accountant should contact his or her personal attorney concerning rights and obligations.
True or False20) Integrity includes mitigating actual conflicts of interest, regularly communicating with business associates to avoid apparent conflicts of interest, and advising all parties of any potential conflicts
True or False11) Credibility includes maintaining an appropriate level of professional expertise by continually developing knowledge and skills.
Answer: FALSEExplanation: Competence includes maintaining an appropriate level of professional expertise by continually developing knowledge and skills.
True or False12) The Sarbanes-Oxley legislation does NOT provide a process for employees to report violations of illegal and unethical acts.
Answer: FALSEExplanation: This legislation does provide employees with the right to report violations.
True or False13) Management accountants have important ethical responsibilities that are related to competence, confidentiality, integrity, and credibility.
True or False14) A managerial accountant should NOT disclose confidential information to an outside party (such as a newspaper) unless legally obligated to do so.
True or False15) If a managerial accountant were NOT keeping up with current developments in managerial accounting, that behavior might violate a competence standard of professional ethical behavior.
True or False16) If a managerial accountant suspected his or her immediate superior of wrongdoing, the managerial accountant should request an immediate meeting with the Board of Directors.
Answer: FALSEExplanation: If a managerial accountant suspected his or her immediate superior of wrongdoing, the managerial accountant should first present the situation to the next higher managerial level.
True or False17) The Institute of Management Accountants provides a hotline to discuss ethical issues.
True or False18) When faced with a potential ethical conflict, the managerial accountant should first consult any internal procedures of that organization.
True or False19) When confronted with a potential ethical conflict, a managerial accountant should not contact his or her personal attorney concerning rights and obligations.
Answer: FALSEExplanation: When confronted with a potential ethical conflict, a managerial accountant should contact his or her personal attorney concerning rights and obligations.
True or False20) Integrity includes mitigating actual conflicts of interest, regularly communicating with business associates to avoid apparent conflicts of interest, and advising all parties of any potential conflicts |
Who among the following is most likely to use only financial accounting information?
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