Exam 15: The Changing Business Environment - a Managers Perspective

Although the purpose of the confidentiality standard is to encourage management accountants to remain loyal to their company,failure to disclose knowledge of internal illegal acts to outside authorities can result in the accountants being charged as an accessory to the crime.

Rules applicable to accounting information created and prepared for management use are the same as those for information reported to the general public.

Financial information included in financial statements prepared for external use is past data,summarized for the user as of a particular date.

Activity-based costing (ABC)is used most often to improve the assignment of overhead costs to products.

The main goal of total quality management is to reduce product costs.

JIT,TQM,and ABM all seek continuous improvement in operations.

Which of the following is a nonfinancial performance measure?

Carlson Manufacturing is a producer of plastic bottles for bottled water companies.In July of this year,the plant manager switched to a new supplier of raw materials.The materials have a lower cost,and because of their chemical composition,more bottles can be made per hour.The downside of this faster production is that more bad,unusable bottles result.Below are the production data for the two months before and after the switch of suppliers. a. Compute bad units as a percentage of total production for each month. Round answers to two decimal places. b. What does the plant manager need to consider in determining whether or not to continue buying raw material from the new supplier?

The fathers of the balanced scorecard,Drs.Kaplan & Norton,introduced four generic perspectives from which to view a business.Consider the following four questions and briefly describe the generic perspective that relates to the question and why. 1.How should we present ourselves to our investors and owners to be considered by them as a financial success and an attractive investment? 2.What do we have to offer our customers related to our product,customer intimacy,and operational excellence? 3.In what activities must we excel to be able to accomplish our financial and customer-oriented objectives? 4.What do we need to change in our infrastructure to achieve number 3?

"Hours of inspection" is an example of a nonfinancial performance measure.

Financial accounting is concerned primarily with planning and control of internal operations.

Analysis of nonfinancial data is important to the management accountant because

The analyses and flow of accounting data inside a company need not depend on the double-entry format.

Suppose a management accountant becomes aware that a poor judgment he or she made has resulted in the loss of one of the company's clients.Is the accountant bound to share this information with the company? (The accountant doubts that the company will ever find out about it directly.)

Management accountants working in purchasing must decline gifts from company vendors,because acceptance of a gift might influence or be perceived as influencing their performance or decision analyses.

Management accounting is the process of identifying,measuring,accumulating,analyzing,preparing,and communicating financial information used by management.

The management process and management accounting are identical.

Management accounting accumulates,maintains,and processes an organization's financial and nonfinancial information.

Financial accounting's main emphasis is on full and accurate accounting for and disclosure of a company's operating results.