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Management Accounting > Overview of MAS > Flashcards

Overview of MAS Flashcards

1
Q

Managerial accounting places considerable weight on:

A) generally accepted accounting principles.
B) the financial history of the entity.
C) ensuring that all transactions are properly recorded.
D) detailed segment reports about departments, products, and customers.

A

D) detailed segment reports about departments, products, and customers.

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2
Q 
The plans of management are often expressed formally in: 
	A)	financial statements. 
	B)	performance reports. 
	C)	budgets. 
	D)	ledgers.
A

C) budgets.

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3
Q 
The phase of accounting concerned with providing information to managers for use in planning and controlling operations and in decision making is called: 
	A)	throughput time. 
	B)	managerial accounting. 
	C)	financial accounting. 
	D)	controlling.
A

B) managerial accounting.

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4
Q

A staff position:
A) relates directly to the carrying out of the basic objectives of the organization.
B) is supportive in nature, providing service and assistance to other parts of the organization.
C) is superior in authority to a line position.
D) none of these.

A

B) is supportive in nature, providing service and assistance to other parts of the organization.

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5
Q

For a manufacturing company, what type of position (line or staff) is each of the following?

Manager of a Data Manager of a Production
Processing Department Department
A) Staff Staff
B) Staff Line
C) Line Staff
D) Line Line

A

B) Staff Line

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6
Q 
A \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ position in an organization is directly related to the achievement of the organization's basic objectives. 
	A)	line 
	B)	management 
	C)	staff 
	D)	None of the above.
A

A) line

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7
Q

______________ is an example of a line position.

A)	Controller for a merchandising company 
B)	Chief financial officer of a merchandising company 
C)	Store manager for Best Buy 
D)	Human resources manager for a community college
A

C) Store manager for Best Buy

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8
Q

The major functions of management is (are):
A. strategic management and long-range planning.
B. planning and decision making.
C. identifying threats and opportunities for the firm.
D. all of the above

A

D. all of the above

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9
Q

The process of identifying, measuring, analyzing, interpreting, and communicating information in pursuit of an organization’s goals is called
A. managerial accounting C. management
B. financial accounting D. promotional activities

A

A. managerial accounting

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10
Q

The primary objective of management accounting is
A. to provide stockholders and potential investors with useful information for decision making.
B. to provide banks and other creditors with information useful in making credit decisions.
C. to provide management with information useful for planning and control of operations.
D. to provide supervising government agencies with information about the company’s management affairs.

A

C. to provide management with information useful for planning and control of operations

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11
Q

Management accounting information
A. uses historical cost as the basis for reports to managers who are making decisions about future courses of action.
B. should be developed and provided only if its benefits exceed its costs.
C. does not reflect the financial criteria of verifiability or consistency.
D. should serve the basic needs of investors and creditors

A

B. should be developed and provided only if its benefits exceed its costs.

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12
Q

Which of the following is included in the day-to-day work of the management team?
A. decision making C. controlling
B. planning D. all of the above

A

D. all of the above

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13
Q 
Paying rent, purchasing supplies, and purchasing inventory are which of the day-to-day work activities of the management team?
A.	decision making	
B.	planning
C.	directing operational activities
D.	only A and B
A

C. directing operational activities

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14
Q

Which of the following statements is true when comparing managerial accounting to financial accounting?
A. Managerial accounting places more emphasis on precision than financial accounting.
B. Both are highly dependent on timely information.
C. Both rely on the same accounting information system.
D. Managerial accounting is concerned with external decision-makers.

A

C. Both rely on the same accounting information system.

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15
Q

Which of the following is true of managerial accounting rather than financial accounting?
A. The outputs of this accounting system are the primary financial statements.
B. The methods of this accounting system are established by an overseeing board.
C. The accounting methods are standardized to allow comparisons among companies.
D. The accounting system would be unique to each company.

A

D. The accounting system would be unique to each company.

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16
Q

Management accounting’s role in the control processes is to provide
A. managers with information that can be used to determine customer satisfaction levels.
B. investors and creditors information on the financial stability of the company.
C. managers with relevant information to compare with expectations.
D. input to managers on the best ways to achieve continuous improvement in the production process.

A

C. managers with relevant information to compare with expectations.

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17
Q

Which of the following statements are true regarding financial and managerial accounting?
I. Both are mandatory.
II. Both rely on the same underlying financial data.
III. Both emphasize the segments of an organization, rather than just looking at the organization as a whole.
IV. Both are geared to the future, rather than to the past.
A. I, II, III, and IV C. Only II and III
B. Only II, III and IV D. Only II

A

D. Only II

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18
Q

Managerial accounting activity adds value to an organization by pursuing five major objectives, which include
A. providing information for decision making and planning.
B. measuring the performance of activities within an organization.
C. assisting managers in directing and controlling operational activities.
D. all of them

A

D. all of them

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19
Q

Managerial accounting places considerable weight on:
A. generally accepted accounting principles.
B. the financial history of the entity.
C. ensuring that all transactions are properly recorded.
D. detailed segment reports about departments, products, and customers.

A

D. detailed segment reports about departments, products, and customers.

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20
Q

Which of the following statement is FALSE?
A. Managerial accounting need not conform to GAAP.
B. Financial accounting reports focus on subunits of the organization.
C. Managerial accounting is not required
D. Managerial accounting focuses on the needs of internal users.

A

B. Financial accounting reports focus on subunits of the organization

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21
Q

For internal uses, managers are more concerned with receiving information that is:
A. completely objective and verifiable.
B. completely accurate and precise.
C. relevant, flexible, and immediately available.
D. relevant, completely accurate, and precise.

A

C. relevant, flexible, and immediately available.

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22
Q

Which of the following statements is correct?
A. A certified public accountant can readily render management advisory services to the public.
B. A CPA with MBA and DBM degrees is automatically qualified to render management advisory services.
C. Competence as a standard in the rendition of management advisory services by a CPA may be equated to having excellent scholarly preparation to include the usual baccalaureate degree, an MBA and other post graduate studies.
D. Adequate training and experience in both the analytical approach and process in a particular undertaking are requisites for the CPA to be involved in a management advisory service engagement.

A

D. Adequate training and experience in both the analytical approach and process in a particular undertaking are requisites for the CPA to be involved in a management advisory service engagement.

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23
Q

The following characterize management advisory services except
A. It involves decision for the future
B. It broader in scope and varied in nature
C. It utilizes more junior staff than senior members of the firm
D. It relates to specific problems where expert help is required

A

C. It utilizes more junior staff than senior members of the firm

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24
Q

Which of the following statements is incorrect?
A. CPAs provide management advisory services to go around the ethical constraints as mandated by the Accountancy Law.
B. Businesses hire management consultants to help define specific problems and develop solutions.
C. CPAs who are performing management advisory services may be considered to be in the practice of management consulting.
D. Included in the practice of consulting is the provision of confidential service in which the identity of the client is concealed

A

A. CPAs provide management advisory services to go around the ethical constraints as mandated by the Accountancy Law.

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25
Q

The primary purpose of management advisory services is
A. To conduct special studies, preparation of recommendations, development of plans and programs, and provision of advice and assistance in their implementation.
B. To provide services or to fulfill some social needs.
C. To improve the client’s use of its capabilities and resources to achieve the objectives of the organization.
D. To earn the best rate of return on resources entrusted to its care with safety of investment being taken into account and consistent with firm’s social and legal responsibilities.

A

C. To improve the client’s use of its capabilities and resources to achieve the objectives of the organization.

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26
Q

Managerial accounting information:
A. pertains to the entity as a whole and is highly aggregated.
B. pertains to subunits of the entity and may be very detailed.
C. is prepared only once a year.
D. is constrained by the requirements of generally accepted accounting principles.

A

B. pertains to subunits of the entity and may be very detailed.

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27
Q

Managerial accounting is primarily concerned with:
A. segments of a company rather than the company as a whole.
B. the data needs of stockholders and creditors.
C. meeting the requirements of generally accepted accounting principles.
D. the company as a whole rather than a segment of the organization.

A

A. segments of a company rather than the company as a whole

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28
Q

The major reporting standard for presenting managerial accounting information is
A. relevance
B. generally accepted accounting principles
C. the cost principle
D. the current tax law

A

A. relevance

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29
Q

Managerial accounting differs from financial accounting in that it is
A. more concerned with segments of a company.
B. less constrained by rules and regulations.
C. more concerned with the future.
D. all of the above.

A

D. all of the above.

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30
Q

The distinction between traditional accounting and cost management is
A. the focus of the former on accounting matters and the latter in support to management in making the right decisions for staying on a competitive position
B. the emphasis of former on record keeping and the latter on reporting
C. the focus of the former on cost cutting and the latter on product differentiation
D. the focus of the former on efficiency and the latter on quality.

A

A. the focus of the former on accounting matters and the latter in support to management in making the right decisions for staying on a competitive position

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31
Q

Which of the following activities is not usually performed by a management accountant?
A. Assisting managers to interpret data in managerial accounting reports.
B. Designing systems to provide information for internal and external reports.
C. Gathering data from sources other than the accounting system.
D. Deciding the best level of inventory to be maintained.

A

D. Deciding the best level of inventory to be maintained.

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32
Q

Which of the following statements correctly distinguishes financial and managerial accounting?
A. managerial accounting reports on the whole organization
B. financial accounting is oriented toward the future
C. financial accounting is primarily concerned with providing information for internal users
D. managerial accounting is oriented more toward the planning and control aspects of management

A

D. managerial accounting is oriented more toward the planning and control aspects of management

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33
Q

Management accountants would not
A. assist in budget planning.
B. prepare reports primarily for external users.
C. determine cost behavior.
D. be concerned with the impact of cost and volume on profits.

A

B. prepare reports primarily for external users.

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34
Q

In the contemporary business environment, cost management focus is on
A. financial reporting and cost analysis.
B. common emphasis on standardization and standard costs.
C. development and implementation of the business strategy.
D. all of the above.

A

C. development and implementation of the business strategy.

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35
Q

Management accounting is similar to financial accounting in that
A. both are governed by generally accepted accounting principles.
B. both deal with economic events.
C. both concentrate on historical data.
D. both classify reported information in the same manner.

A

B. both deal with economic events.

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36
Q

Managerial accounting differs from financial accounting in that financial accounting is
A. more oriented toward the future.
B. primarily concerned with external financial reporting.
C. concerned with nonquantative information.
D. heavily involved with decision analysis and implementation of decisions.

A

B. primarily concerned with external financial reporting.

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37
Q

Managerial accounting provides data for all of the following major objectives except:
A. planning and control of costs
B. supporting management planning
C. compliance with SEC reporting requirements
D. determining the costs of products

A

C. compliance with SEC reporting requirements

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38
Q

Which statement is false? Managerial accounting information:
A. involves planning for the future
B. should be requested and used by management even if it is very costly to gather and analyze
C. helps managers make financing decisions
D. need not comply with generally accepted accounting principles

A

B. should be requested and used by management even if it is very costly to gather and analyze

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39
Q

Internal reports must be communicated
A. daily C. annually
B. monthly D. as needed

A

D. as needed

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40
Q

Which of the following does not apply to the content of managerial reports?
A. Reporting standard is relevant to the decision to be made.
B. May extend beyond double-entry accounting system.
C. Pertain to subunits of the entity and may be very detailed.
D. Pertains to the entity as a whole and is highly aggregated.

A

D. Pertains to the entity as a whole and is highly aggregated.

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41
Q

Which consideration influences the frequency of an internal report?
A. The wishes of the managers receiving the report.
B. The frequency with which decisions are made that require the information in the report.
C. The cost of preparing the report.
D. All of the above.

A

D. All of the above.

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42
Q

Which of the following statements about internal reports is not true?
A. The content of internal reports may extend beyond the double-entry accounting system.
B. Internal reports may show all amounts at market values.
C. Internal reports may discuss prospective events.
D. Most internal reports are summarized rather than detailed.

A

D. Most internal reports are summarized rather than detailed.

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43
Q

Management accountants help develop and maintain reporting systems that are aligned with organizational structures and that provide useful information on an organization’s performance. Management decision processes fall into three categories that consist of
A. Nonrepetitive, nonprogrammed, and nonstrategic.
B. Repetitive, nonprogrammed, and strategic.
C. Repetitive, programmed, and strategic.
D. Nonrepetitive, nonprogrammed, and strategic.

A

B. Repetitive, nonprogrammed, and strategic.

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44
Q

Internal reports are generally
A. aggregated C. regulated
B. detailed D. unreliable

A

B. detailed

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45
Q 
Managerial accounting reports can be described as:
A.	general-purpose
B.	special purpose
C.	classified financial statements
D.	macro-report
A

B. special purpose

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46
Q

The informational needs of internal users/management:
A. are historical in nature
B. emphasize the company as a whole
C. emphasize accuracy over timeliness
D. may require more customized reports than external financial statements

A

D. may require more customized reports than external financial statements

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47
Q 
The role of the managerial accountant in today’s corporate world includes all of the following except:
A.	interpreting financial information	
B.	financial planning	
C.	financial modeling
D.	bookkeeping
A

D. bookkeeping

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48
Q

Which of the following is most associated with managerial accounting?
A. Must follow generally accepted accounting principles.
B. May rely on estimates and forecasts.
C. Is prepared for users outside the organization.
D. Always reports on the entire entity.

A

B. May rely on estimates and forecasts.

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49
Q

Which statement about the extent of detail in a management accounting report is true?
A. It may depend on the frequency of the report.
B. It depends on the type of manager receiving the report.
C. It depends on the level of the manager receiving the report.
D. All of the above.

A

C. It depends on the level of the manager receiving the report.

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50
Q

Managerial accounting information
A. pertains to the entity as a whole and is highly aggregated.
B. pertains to subunits of the entity and may be very detailed.
C. is prepared only once a year. Bobadilla
D. is constrained by the requirements of generally accepted accounting principles.

A

B. pertains to subunits of the entity and may be very detailed.

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51
Q

Which of the following characteristics is inherent to management accounting?
A. Reporting of historical information
B. Compliance to generally accepted accounting principles
C. Contribution approach income statement
D. External users of financial report

A

C. Contribution approach income statement

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52
Q

In order to be useful to managers, management accounting reports should possess all of the following characteristics except:
A. Provide objective measures of past operations and subjective estimates about future decisions.
B. Be prepared in accordance with generally accepted accounting principles.
C. Be provided at any time management needs information.
D. Be prepared to report information for any unit of the business to support decision making.

A

B. Be prepared in accordance with generally accepted accounting principles.

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53
Q

Which of the following is an incorrect statement?
A. There is no overlap between financial and managerial accounting.
B. Managerial accounting sometimes relies on past information.
C. Managerial accounting does not need to conform to generally accepted accounting principles.
D. Financial accounting must conform to generally accepted accounting principles.

A

A. There is no overlap between financial and managerial accounting.

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54
Q

For managerial reports, the accounting data used:
A. must be the same accounting data for reporting to shareholders, but may use different data for tax purposes.
B. must be the same accounting data for tax purposes, but may use different data for reporting to shareholders.
C. must be the same accounting data for both tax purposes and reporting to shareholders.
D. may be different accounting data for both tax purposes and reporting to shareholders.

A

D. may be different accounting data for both tax purposes and reporting to shareholders.

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55
Q

Which of the following is an ethical standard of conduct for managerial accountants?

  1. competence
  2. confidentiality
  3. integrity
  4. objectivity

A. All of them C. 1, 2, 3 only
B. 1, 3, 4 only D. 1 and 3 only

A

A. All of them

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56
Q

Under which ethical standard of conduct does the managerial accountant have the responsibility to prepare complete and clear reports and recommendations after appropriate analyses of relevant and reliable information?
A. competence C. integrity
B. confidentiality D. objectivity

A

A. competence

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57
Q

Under which ethical standard of conduct does the managerial accountant have the responsibility to communicate information fairly and objectively?
A. competence C. integrity
B. confidentiality D. objectivity

A

D. objectivity

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58
Q

Under which ethical standard of conduct does the managerial accountant have the responsibility to refuse any gift, favor, or hospitality that would influence or appear to influence his or her decision?
A. competence C. integrity
B. confidentiality D. objectivity

A

C. integrity

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59
Q

Under which ethical standard of conduct does the managerial accountant have the responsibility to refrain from either actively or passively subverting the attainment of an organization’s legitimate and ethical objectives?
A. integrity C. objectivity
B. competence D. confidentiality

A

A. integrity

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60
Q

Under which ethical standard of conduct does the managerial accountant have the responsibility to disclose fully all relevant information that could reasonably be expected to influence an intended user’s understanding of the reports, comments, and recommendations presented?
A. objectivity C. confidentiality
B. competence D. integrity

A

A. objectivity

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61
Q

For managerial decision purposes, the volume of information should be evaluated on the basis of
A. cost-benefit relationship.
B. A cost, but not benefit.
C. A benefit, but not cost.
D. Neither costs nor benefits, but some other criteria.

A

A. cost-benefit relationship.

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62
Q 
What is the primary criterion for the preparation of managerial accounting reports?
A.	Relevance of the reports.	
B.	Meet the manager’s needs.
C.	Timing of the reports.	
D.	Cost of the reports.
A

B. Meet the manager’s needs.

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63
Q

The first step in managerial decision making is to
A. specify the standard or expected outcome.
B. gather information about the consequence of each alternative.
C. identify a problem.
D. list alternative courses of action

A

C. identify a problem.

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64
Q

In a broad sense, cost accounting can be defined within the accounting system as
A. internal and external reporting that may be used in making nonroutine decisions and in developing plans and policies.
B. external reporting to government, various outside parties, and stockholders.
C. internal reporting for use in management planning and control, and external reporting to the extent its product-costing function satisfies external reporting requirements.
D. internal reporting for use in planning and controlling routing operations.

A

C. internal reporting for use in management planning and control, and external reporting to the extent its product-costing function satisfies external reporting requirements.

65
Q 
The cost management function is usually under 
A.	the chief information officer.	
B.	treasurer.
C.	purchasing manager.
D.	controller.
A

D. controller.

66
Q

If a distinction is made between cost accounting and managerial accounting, managerial accounting is more oriented toward
A. valuation of inventory.
B. analysis of variances including spoilage.
C. financial reporting to third parties.
D. the planning and controlling aspects of the management process.

A

D. the planning and controlling aspects of the management process.

67
Q

Management accounting and financial accounting differ in that management accounting information
A. is prepared following prescribed rules
B. is prepared using whatever methods the company finds beneficial
C. is prepared for stockholders
D. is prepared following Generally Accepted Accounting Principles

A

B. is prepared using whatever methods the company finds beneficial

68
Q 
Which of the following does not describe managerial accounting?
A.	internally focused	
B.	emphasis on the future
C.	externally focused
D.	detailed information
A

C. externally focused

69
Q

Management accounting
A. reports are always objective
B. provides information to external users
C. generates general purpose financial statements and reports
D. has few externally imposed standards

A

D. has few externally imposed standards

70
Q

Management accounting reports are prepared
A. to meet the needs of decision makers within the firm
B. whenever stockholders request them
C. according to guidelines prepared by the SEC
D. by CPAs

A

A. to meet the needs of decision makers within the firm

71
Q

Which of the following is true of managerial accounting rather than financial accounting?
A. The outputs of this accounting system are the primary financial statements
B. The methods of this accounting system are established by an overseeing board.
C. The accounting methods are standardized to allow comparisons among companies
D. The accounting system would be unique to each company

A

D. The accounting system would be unique to each company

72
Q

Traditional managerial accounting systems are often criticized for:
A. not focusing on the activities that actually drive the costs.
B. only looking at historical data.
C. being too GAAP oriented.
D. not emphasizing cost control.

A

A. not focusing on the activities that actually drive the costs.

73
Q

The managerial function of controlling
A. is performed only by the controller of a company.
B. is only applicable when the company sustains a loss.
C. is concerned mainly with a operating a manufacturing segment.
D. includes performance evaluation by management.

A

D. includes performance evaluation by management.

74
Q

Planning is a function that involves
A. hiring the right people for a particular job.
B. coordinating the accounting information system.
C. setting goals and objectives for an entity.
D. analyzing financial statements.

A

C. setting goals and objectives for an entity.

75
Q 
In determining whether planned goals are being met, a manager is performing the function of
A.	planning	
B.	controlling
C.	motivating
D.	follow-up
A

B. controlling

76
Q

Which of the following is not a separate management function?
A. Motivating C. Controlling
B. Planning D. Decision-making

A

D. Decision-making

77
Q 
Total quality management emphasizes
A.	zero defects	
B.	continual improvement
C.	elimination of waste
D.	all of the above
A

D. all of the above

78
Q 
Automation of the manufacturing process increases
A.	the quantity of information	
B.	the timeliness of information	
C.	the number of production employees
D.	both a and b
A

D. both a and b

79
Q 
Which of the following emerging themes in cost accounting deals with managers striving to create and environment which will enable workers to manufacture perfect (zero defect) products?
A.	customer orientation	
B.	global competition
C.	total quality management
D.	advance in information technology
A

C. total quality management

80
Q

Managerial accounting creates value by:
A. by forcing managers to analyze historical figures and interpret the results
B. by eliminating all pricing and costing errors
C. by focusing managers attention on the relationship between financial and non-financial factors
D. all of the above

A

C. by focusing managers attention on the relationship between financial and non-financial factors

81
Q

Systems implemented to reduce defects in finished products with the goal of achieving zero defects are
A. activity-based costing systems.
B. enterprise resource planning systems.
C. value chain systems.
D. total quality management systems.

A

D. total quality management systems.

82
Q 
Which of the following functions is most directly related to management by objective?
A.	Reporting	
B.	Decision making	
C.	Control
D.	Planning
A

D. Planning

83
Q

The setting of objectives and the identification of methods to achieve those objectives is called
A. planning C. decision making
B. controlling D. performance evaluation

A

A. planning

84
Q

Which of the following best describes what performance evaluation should be designed to do?
A. Modify goal and objectives each month
B. Establish sales goals and targets
C. Compare actual results to plan
D. Establish blame

A

C. Compare actual results to plan

85
Q

In the planning and control process, what is the proper sequence of events?
A. Set goals, set objectives, develop plans, implement plans, evaluate performance
B. Establish a master budget, set standard costs, develop variance analysis Bobadilla
C. Develop engineered costs, develop pricing targets, calculate contribution margins
D. Identify variable costs, identify fixed costs, project the sales mix, determine breakeven

A

A. Set goals, set objectives, develop plans, implement plans, evaluate performance

86
Q 
Which of the following is a staff position?
A.	vice-president of production	
B.	vice-president of marketing
C.	vice-president of finance
D.	plant foreman
A

C. vice-president of finance

87
Q

Which management position is responsible for raising capital?
A. Internal auditor C. Controller
B. Treasurer D. CFO

A

B. Treasurer

88
Q

All of the following would be considered staff functions EXCEPT:
A. the vice-president of finance
B. the vice-president of corporate planning
C. the vice-president of research and development
D. the vice president of marketing

A

D. the vice president of marketing

89
Q

Management accountants generally exercise which type of authority?
A. Company. C. Line.
B. Functional. D. Staff.

A

D. Staff.

90
Q

The treasurer function is usually not concerned with
A. investor relations.
B. financial reports.
C. short-term financing.
D. credit extension and collection of bad debts.

A

B. financial reports.

91
Q

Which of the following duties is usually assigned to the controller?
A. directing the granting of credit to clients
B. investing the organization’s funds
C. tax planning
D. independently evaluating the firm’s financial statements

A

C. tax planning

92
Q

Developing a company strategy for responding to anticipated new markets is an example of:
A. decision making C. planning
B. controlling D. motivating

A

C. planning

93
Q 
Strategic cost management has emerged from a blending of:
A.	cost driver analysis	   
B.	strategic position analysis	
C.	value chain analysis
D.	all of the above
A

D. all of the above

94
Q 
Strategic cost management includes all of the following tools except:
A.	standard cost variance analysis	
B.	value chain analysis	
C.	activity based management
D.	all of the above
A

A. standard cost variance analysis

95
Q

Strategic planning is different from operational planning in that operational planning:
A. involves large sums of money
B. would be involved in determining production levels for next quarter
C. involves only long range goals
D. operational and strategic planning are the same

A

B. would be involved in determining production levels for next quarter

96
Q

Which of the following might be a performance measure for the financial perspective of a balanced scorecard?
A. percentage of on-time deliveries by the organization
B. percentage of product defects
C. return on assets
D. percentage of market share held by the organization

A

C. return on assets

97
Q 
The initiative to reduce non-value added activity is meeting which balanced scorecard objective?
A.	internal operations perspective
B.	customer perspective
C.	financial perspective	
D.	learning and growth perspective
A

A. internal operations perspective

98
Q 
The balanced scorecard internal operations perspective includes
A.	customer complaints	
B.	number of engineering changes	
C.	market share
D.	inventory turnover
A

B. number of engineering changes

99
Q

The controller of a company or other organization is

  a. a staff manager.
  b. an operating manager.
  c. an accountant, not a manager.
  d. a natural manager.
A

a. a staff manager.

100
Q

Which statement about the degree of detail in a report is true?

  a. It depends on the level of the manager receiving the report.
  b. It may depend on the frequency of the report.
  c. It depends on the type of manager receiving the report.
  d. All of the above.
A

d. All of the above.

101
Q

Managerial accounting is similar to financial accounting in that

  a. both are governed by generally accepted accounting principles.
  b. both deal with economic events.
  c. both concentrate on historical costs.
  d. both classify reported information in the same way.
A

b. both deal with economic events.

102
Q

Managerial accounting differs from financial accounting in that it is

  a. more concerned with the future.
  b. more concerned with segments of a company.
  c. less constrained by rules and regulations.
  d. all of the above.
A

d. all of the above.

103
Q

One of the ways managerial accounting differs from financial accounting is that managerial accounting

  a. is bound by generally accepted accounting principles.
  b. classifies information in different ways.
  c. does not use financial statements.
  d. deals only with economic events.
A

b. classifies information in different ways.

104
Q

Which activity is NOT normally performed by managerial accountants?

  a. Assisting managers to interpret data in managerial accounting reports.
  b. Designing systems to provide information for internal and external reports.
  c. Gathering data from sources other than the accounting system.
  d. Deciding the best level of inventory to be maintained.
A

d. Deciding the best level of inventory to be maintained.

105
Q

Conventional and just-in-time manufacturers both

  a. Maintain large inventories of their products.
  b. Sell only to other manufacturing companies.
  c. Desire to meet customers' deadlines.
  d. Require about the same amount of space to operate.
A

c. Desire to meet customers’ deadlines.

106
Q

Which function is most directly related to management by objectives?

  a. Planning.
  b. Control.
  c. Decision making.
  d. Reporting.
A

a. Planning.

107
Q

Which consideration influences the frequency of an internal report?

  a. The wishes of the managers receiving the report. 
  b. The frequency with which decisions are made that require the information in the report.
  c. The cost of preparing the report.
  d. All of the above.
A

d. All of the above.

108
Q

. Planning and control are

  a. different names for the same thing.
  b. the basic functions of management.
  c. described equally well by the terms "decision making" and "performance evaluation."
  d. exemplified by, respectively, financial statements and budgeting.
A

b. the basic functions of management.

109
Q

In comparing financial and management accounting, which of the following more accurately describes management accounting information?

a. historical, precise, useful
b. required, estimated, internal
c. budgeted, informative, adaptable
d. comparable, verifiable, monetary

A

c. budgeted, informative, adaptable

110
Q

One major difference between financial and management accounting is that
a. financial accounting reports are prepared primarily for users external to the company.
b. management accounting is not under the jurisdiction of the Securities and Exchange
Commission.
c. government regulations do not apply to management accounting.
d. all of the above are true.

A

d. all of the above are true.

111
Q

Which of the following statements about management or financial accounting is false?

a. Financial accounting must follow GAAP.
b. Management accounting is not subject to regulatory reporting standards.
c. Both management and financial accounting are subject to mandatory recordkeeping requirements.
d. Management accounting should be flexible.

A

c. Both management and financial accounting are subject to mandatory recordkeeping requirements.

112
Q

Management accounting

a. is more concerned with the future than is financial accounting.
b. is less concerned with segments of a company than is financial accounting. c. is more constrained by rules and regulations than is financial accounting.
d. all of the above are true.

A

a. is more concerned with the future than is financial accounting

113
Q

Modern management accounting can be characterized by its

a. flexibility.
b. standardization.
c. complexity.
d. precision.

A

a. flexibility.

114
Q

Which of the following is not a valid method for determining product cost?

a. arbitrary assignment
b. direct measurement
c. systematic allocation
d. cost-benefit measurement

A

d. cost-benefit measurement

115
Q

Broadly speaking, cost accounting can be defined as a(n)

a. external reporting system that is based on activity-based costs.
b. system used for providing the government and creditors with information about a company’s internal operations.
c. internal reporting system that provides product costing and other information used by managers in performing their functions.
d. internal reporting system needed by manufacturers to be in compliance with Cost Accounting Standards Board pronouncements

A

c. internal reporting system that provides product costing and other information used by managers in performing their functions.`

116
Q

Cost accounting is directed toward the needs of

a. regulatory agencies.
b. external users.
c. internal users.
d. stockholders.

A

c. internal users.

117
Q

Cost accounting is necessitated by

a. the high degree of conversion found in certain businesses.
b. regulatory requirements for manufacturing companies.
c. management’s need to be aware of all production activities.
d. management’s need for information to be used for planning and controlling activities.

A

a. the high degree of conversion found in certain businesses.

118
Q

The process of ______ causes the need for cost accounting.

a. conversion
b. sales
c. controlling
d. allocating

A

a. conversion

119
Q

Financial accounting

a. is primarily concerned with internal reporting.
b. is more concerned with verifiable, historical information than is cost accounting.
c. focuses on the parts of the organization rather than the whole.
d. is specifically directed at management decision-making needs.

A

b. is more concerned with verifiable, historical information than is cost accounting.

120
Q

Financial accounting and cost accounting are both highly concerned with

a. preparing budgets.
b. determining product cost.
c. providing managers with information necessary for control purposes. d. determining performance standards.

A

b. determining product cost.

121
Q

Which of the following topics is of more concern to management accounting than to cost accounting?

a. generally accepted accounting principles
b. inventory valuation
c. cost of goods sold valuation
d. impact of economic conditions on company operations

A

d. impact of economic conditions on company operations

122
Q

Cost and management accounting

a. require an entirely separate group of accounts than financial accounting uses.
b. focus solely on determining how much it costs to manufacture a product or provide a service.
c. provide product/service cost information as well as information for internal decision making.
d. are required for business recordkeeping as are financial and tax accounting.

A

c. provide product/service cost information as well as information for internal decision making.

123
Q

Which of the following statements is true?

a. Management accounting is a subset of cost accounting.
b. Cost accounting is a subset of both management and financial accounting.
c. Management accounting is a subset of both cost and financial accounting.
d. Financial accounting is a subset of cost accounting.

A

b. Cost accounting is a subset of both management and financial accounting.

124
Q

Which of the following statements is false?

a. A primary purpose of cost accounting is to determine valuations needed for external financial statements.
b. A primary purpose of management accounting is to provide information to managers for use in planning, controlling, and decision making.
c. The act of converting production inputs into finished products or services necessitates cost accounting.
d. Two primary hallmarks of cost and management accounting are standardization of procedures and use of generally accepted accounting principles.

A

d. Two primary hallmarks of cost and management accounting are standardization of procedures and use of generally accepted accounting principles.

125
Q

A long-term plan that fulfills the goals and objectives of an organization is known as a(n)

a. management style.
b. strategy.
c. mission statement.
d. operational mission.

A

b. strategy.

126
Q

Core competencies are not

a. internal functions crucial to the success and survival of a company.
b. attributes that keep a firm from competing.
c. different for every organization.
d. considered influences on corporate strategies.

A

b. attributes that keep a firm from competing.

127
Q

A managerial accountant who communicates information objectively is exercising which of the following standards?

a. objectivity
b. integrity
c. competence
d. confidentiality

A

a. objectivity

128
Q

A managerial accountant who prepares clear reports and recommendations after analyzing relevant facts is exercising which of the following standards?

a. objectivity
b. integrity
c. competence
d. confidentiality

A

c. competence

129
Q

Which of the following statements about managerial accountants is false?
A. Managerial accountants more and more are considered “business partners.”
B. Managerial accountants often are part of cross-functional teams.
C. An increasing number of organizations are segregating managerial accountants in separate managerial-accounting departments.
D. In a number of companies, managerial accountants make significant business decisions and resolve operating problems.
E. The role of managerial accountants has changed considerably over the past decade.

A

C. An increasing number of organizations are segregating managerial accountants in separate managerial-accounting departments.

130
Q 
The day-to-day work of management teams will typically comprise all of the following activities except: 
	A.	decision making. 
	B.	planning. 
	C.	cost minimizing. 
	D.	directing operational activities. 
	E.	controlling.
A

C. cost minimizing.

131
Q 
Which of the following functions is best described as choosing among available alternatives? 
	A.	Decision making. 
	B.	Planning. 
	C.	Directing operational activities. 
	D.	Controlling. 
	E.	Budgeting.
A

A. Decision making.

132
Q 
Which of the following managerial functions involves a detailed financial and operational description of anticipated operations? 
	A.	Decision making. 
	B.	Planning. 
	C.	Directing operational activities. 
	D.	Controlling. 
	E.	Measuring.
A

B. Planning.

133
Q 
Which of the following involves the coordination of daily business functions within an organization? 
	A.	Decision making. 
	B.	Planning. 
	C.	Directing operational activities. 
	D.	Controlling. 
	E.	Motivating.
A

C. Directing operational activities.

134
Q 
Titan Company has set various goals, and management is now taking appropriate action to ensure that the firm achieves these goals.  One such action is to reduce outlays for overhead, which have exceeded budgeted amounts.  Which of the following functions best describes this process? 
	A.	Decision making. 
	B.	Planning. 
	C.	Coordinating. 
	D.	Controlling. 
	E.	Organizing.
A

D. Controlling.

135
Q

Which of the following is not an objective of managerial accounting?
A. Providing information for decision making and planning.
B. Assisting in directing and controlling operations.
C. Maximizing profits and minimizing costs.
D. Measuring the performance of managers and subunits.
E. Motivating managers toward the organization’s goals.

A

C. Maximizing profits and minimizing costs.

136
Q 
The role of managerial accounting information in assisting management is a(n): 
	A.	financial-directing role. 
	B.	attention-directing role. 
	C.	planning and controlling role. 
	D.	organizational role. 
	E.	problem-solving role.
A

B. attention-directing role.

137
Q 
Employee empowerment involves encouraging and authorizing workers to take initiatives to: 
	A.	improve operations. 
	B.	reduce costs. 
	C.	improve product quality. 
	D.	improve customer service. 
	E.	all of the above.
A

E. all of the above.

138
Q 
The process of encouraging and authorizing workers to take appropriate initiatives to improve the overall firm is commonly known as: 
	A.	planning and control. 
	B.	employee empowerment. 
	C.	personnel aggressiveness. 
	D.	decision making. 
	E.	problem recognition and solution.
A

B. employee empowerment.

139
Q

Managerial accounting:
A. focuses only on historical data.
B. is governed by GAAP.
C. focuses primarily on the needs of personnel within the organization.
D. provides information for parties external to the organization.
E. focuses on financial statements and other financial reports.

A

C. focuses primarily on the needs of personnel within the organization.

140
Q

Managerial accounting:
A. is unregulated.
B. produces information that is useful only for manufacturing organizations.
C. is based exclusively on historical data.
D. is regulated by the Securities and Exchange Commission (SEC).
E. generally focuses on reporting information about the enterprise in its entirety rather than by subunits.

A

A. is unregulated.

141
Q 
Which of the following would likely be considered an internal user of accounting information rather than an external user? 
	A.	Stockholders. 
	B.	Consumer groups. 
	C.	Lenders. 
	D.	Middle-level managers. 
	E.	Government agencies.
A

D. Middle-level managers.

142
Q

Financial accounting focuses primarily on reporting:
A. to parties outside of an organization.
B. to parties within an organization.
C. to an organization’s board of directors.
D. to financial institutions.
E. for financial institutions.

A

A. to parties outside of an organization.

143
Q

Which of the following statements represents a similarity between financial and managerial accounting?
A. Both are useful in providing information for external users.
B. Both are governed by GAAP.
C. Both draw upon data from an organization’s accounting system.
D. Both rely heavily on published financial statements.
E. Both are solely concerned with historical transactions.

A

C. Both draw upon data from an organization’s accounting system.

144
Q 
Which of the following employees at American Airlines would not be considered as holding a line position? 
	A.	Pilot. 
	B.	Chief financial officer (CFO). 
	C.	Flight attendant. 
	D.	Ticket agent. 
	E.	Baggage handler.
A

B. Chief financial officer (CFO).

145
Q

Which of the following employees would be considered as holding a line position?
A. The controller of Exxon Corporation.
B. The vice-president for government relations of Microsoft.
C. The manager of food and beverage services at Disney’s Magic Kingdom.
D. A secretary employed by Hewlett-Packard.
E. None of the above.

A

C. The manager of food and beverage services at Disney’s Magic Kingdom.

146
Q

Which of the following employees at Starbucks would likely be considered as holding a staff position?
A. The company’s chief operating officer (COO).
B. The manager of a store located in Kansas City, Missouri.
C. The company’s lead, in-house attorney.
D. The company’s chief financial officer (CFO).
E. Both the company’s lead, in-house attorney and the chief financial officer

A

E. Both the company’s lead, in-house attorney and the chief financial officer

147
Q 
The chief managerial and financial accountant of an organization is the: 
	A.	chief executive officer (CEO). 
	B.	treasurer. 
	C.	vice-president of accounting. 
	D.	internal auditor. 
	E.	chief financial officer (CFO).
A

E. chief financial officer (CFO).

148
Q

Which of the following typically does not relate to the role of a controller?
A. A controller supervises the accounting department.
B. A controller safeguards an organization’s assets.
C. A controller oversees the preparation of reports required by governmental authorities.
D. A controller normally assumes a narrow role within the organization, often preventing the individual’s rise to top management ranks.
E. Choices “B” and “D” above.

A

E. Choices “B” and “D” above.

149
Q 
A controller is normally involved with: 
	A.	preparing financial statements. 
	B.	managing investments. 
	C.	raising capital. 
	D.	safeguarding assets. 
	E.	managing the firm's credit policy.
A

A. preparing financial statements.

150
Q

Which of the following is not a function of the treasurer?
A. Safeguarding assets.
B. Managing investments.
C. Preparing financial statements.
D. Being responsible for an entity’s credit policy.
E. Raising capital.

A

C. Preparing financial statements.

151
Q

Managerial accountants:
A. often work on cross-functional teams.
B. are located throughout an organization.
C. are found throughout an organization and work on cross-functional teams.
D. are found primarily at lower levels of the organizational hierarchy.
E. are found primarily at higher levels of the organizational hierarchy.

A

C. are found throughout an organization and work on cross-functional teams.

152
Q

The two dimensions of managerial accounting are:
A. a decision-facilitating dimension and a decision-influencing dimension.
B. a decision-facilitating dimension and a financial-influencing dimension.
C. a decision-influencing dimension and a cost-minimizing dimension.
D. a cost-minimizing dimension and a profit-maximizing dimension.
E. a decision-influencing dimension and a profit-maximizing dimension.

A

A. a decision-facilitating dimension and a decision-influencing dimension.

153
Q

Much of managerial accounting information is based on:
A. a cost-benefit theme.
B. profit maximization.
C. cost minimization.
D. the generation of external information.
E. effectiveness but not efficiency.

A

A. a cost-benefit theme.

154
Q 
Managerial accounting has changed in recent years because of: 
	A.	the growth of e-business. 
	B.	increased global competition. 
	C.	the emergence of new industries. 
	D.	an increased focus on the customer. 
	E.	all of the above factors.
A

E. all of the above factors.

155
Q

Managerial accounting has changed in recent years because of:
A. a growing service economy in the United States.
B. the growing popularity of cross-functional teams.
C. computer-integrated manufacturing (CIM).
D. time-based competition.
E. all of the above factors.

A

E. all of the above factors.

156
Q 
Which of the following is not an ethical standard of managerial accounting? 
	A.	Competence. 
	B.	Confidentiality. 
	C.	Efficiency. 
	D.	Integrity. 
	E.	Credibility.
A

C. Efficiency.

157
Q

Which of the following is not an element of competency?
A. To develop appropriate knowledge about a particular subject.
B. To perform duties in accordance with relevant laws.
C. To perform duties in accordance with relevant technical standards.
D. To refrain from engaging in an activity that would discredit the accounting profession.
E. To prepare clear reports after an analysis of relevant and reliable information

A

D. To refrain from engaging in an activity that would discredit the accounting profession.

158
Q 
Assume that a managerial accountant regularly communicates with business associates to avoid conflicts of interest and advises relevant parties of potential conflicts.  In so doing, the accountant will have applied the ethical standard of: 
	A.	objectivity. 
	B.	confidentiality. 
	C.	integrity. 
	D.	credibility. 
	E.	unified behavior.
A

C. integrity.

Management Accounting (4 decks)

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