Question 1

How does the Sarbanes-Oxley Act of 2002 affect the responsibilities of the managers of publicly held US corporations?

Accepted Answer

Under the terms of the Act, the chief executive officer and chief financial officer are responsible for development and enforcement of a strong set of internal controls. The company must report on the effectiveness of its internal controls. The CEO and CFO have ultimate responsibility for the accuracy of the company's financial statements. They must certify that, to their knowledge, the financial statements do not include False information or omit information that would be material. The managers of the company are required to establish a code of ethics and to report on the code of ethics in the 10K annual report filed with the Securities and Exchange Commission. Managers are also required to provide mechanisms for anonymous reporting of fraud within the company (to protect a potential whistleblower).

Question 2

Senior executives focus on financial data when comparing the performance of their companies to that of competitors.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following is not one of the four Standards of Ethical Conduct for Management Accountants?

Accepted Answer

A)  Credibility 
B)  Confidentiality 
C)  Integrity 
D)  Independence 
A)  Credibility 
B)  Confidentiality 
C)  Integrity 
D)  Independence D

Question 4

What part do management accountants play in corporate governance?

Accepted Answer

Management accountants are the guardians

Question 5

Identify the false statement regarding how product costs in a manufacturing company differ from product costs in a service or merchandising company.

Accepted Answer

A)  Both manufacturing companies and service companies incur costs for supplies. 
B)  Manufacturing companies accumulate product costs in inventory accounts, while service companies do not. 
C)  Products of service companies such as restaurants are consumed immediately. 
D)  Most labor costs for merchandising companies are treated as product costs. 
A)  Both manufacturing companies and service companies incur costs for supplies. 
B)  Manufacturing companies accumulate product costs in inventory accounts, while service companies do not. 
C)  Products of service companies such as restaurants are consumed immediately. 
D)  Most labor costs for merchandising companies are treated as product costs.

Question 6

A merchandising business paid $2,500 to purchase inventory and $50 to have the inventory delivered to its customers. Its product costs were $2,550.

Accepted Answer

A) True 
 B)False

Question 7

What are indirect costs, and how are the indirect costs incurred to make products accounted for?

Accepted Answer

Indirect costs are costs that cannot be

Question 8

During its first year of operations, Forrest Company paid $30,000 for direct materials and $50,000 in wages for production workers. Lease payments, utility costs, and depreciation on factory equipment totaled $15,000. General, selling, and administrative expenses were $20,000. The average cost to produce one unit was $2.50. How many units were produced during the period?

Accepted Answer

A)  40,000 
B)  46,000 
C)  38,000 
D)  None of these. 
A)  40,000 
B)  46,000 
C)  38,000 
D)  None of these.

Question 9

Manufacturing costs that cannot be traced to specific units of product in a cost-effective manner are:

Accepted Answer

A)  depreciation on production equipment. 
B)  direct material. 
C)  indirect labor. 
D)  Both depreciation on production equipment and indirect labor. 
A)  depreciation on production equipment. 
B)  direct material. 
C)  indirect labor. 
D)  Both depreciation on production equipment and indirect labor.

Question 10

Select the incorrect statement regarding costs and expenses.

Accepted Answer

A)  Some costs are initially recorded as expenses while others are initially recorded as assets. 
B)  Expenses are incurred when assets are used to generate revenue. 
C)  Manufacturing-related costs are initially recorded as expenses. 
D)  Non-manufacturing costs should be expensed in the period in which they are incurred. 
A)  Some costs are initially recorded as expenses while others are initially recorded as assets. 
B)  Expenses are incurred when assets are used to generate revenue. 
C)  Manufacturing-related costs are initially recorded as expenses. 
D)  Non-manufacturing costs should be expensed in the period in which they are incurred.

Question 11

Financial accounting information is reported periodically, primarily at the end of each fiscal year. When is managerial accounting information reported to managers of an organization?

Accepted Answer

Managerial accounting informat

Question 12

How do information needs of employees change moving up the organization chart?

Accepted Answer

Lower-level employees use primarily nonf

Question 13

What costs are treated as product costs for a manufacturing company?

Accepted Answer

Product costs for a manufactur

Question 14

Which of the following best represents a characteristic of managerial accounting?

Accepted Answer

A)  Information is historically based and reported annually. 
B)  Information is based on estimates and is bounded by relevance and timeliness. 
C)  Information is regulated by the Securities and Exchange Commission. 
D)  Information is characterized by reliability and objectivity. 
A)  Information is historically based and reported annually. 
B)  Information is based on estimates and is bounded by relevance and timeliness. 
C)  Information is regulated by the Securities and Exchange Commission. 
D)  Information is characterized by reliability and objectivity.

Question 15

The following information relates to Minimart's 2012 accounting period: $\begin{array}{|l|r|}
\hline \text { Raw materials used } & \$ 17,000 \
\hline \text { Direct labor wages and salaries } & 33,000 \
\hline \text { Sales salaries } & 25,000 \
\hline \text { Depreciation on manufacturing equipment } & 3,000 \
\hline \text { Rent on manufacturing facilities } & 4,000 \
\hline \text { Administrative supplies and utilities } & 5,000 \
\hline \text { Sales revenue } & 105,000 \
\hline \text { Units of products produced } & 4,000 \
\hline \text { Units of products sold } & 4,000 \
\hline
\end{array}$ Minimart's work in process inventory at the beginning of 2012 was $12,000, and work in process inventory at the end of 2012 was $10,000. Minimart's cost of goods manufactured in 2012 equal:

Accepted Answer

A)  $77,000 
B)  $89,000 
C)  $59,000 
D)  $52,000 
A)  $77,000 
B)  $89,000 
C)  $59,000 
D)  $52,000

Question 16

A potential negative effect of using a just in time inventory system is the immediate impact of labor strikes on the transportation system such as railroad.

Accepted Answer

A) True 
 B)False

Question 17

During its first year of operations, Silverman Company paid $14,000 for direct materials and $19,000 for production workers' wages. Lease payments and utilities on the production facilities amounted to $17,000 while general, selling, and administrative expenses totaled $8,000. The company produced 5,000 units and sold 3,000 units at a price of $15.00 a unit.
What was Silverman's net income for the first year in operation?

Accepted Answer

A)  $7,000 
B)  $12,000 
C)  $28,000 
D)  $37,000 
A)  $7,000 
B)  $12,000 
C)  $28,000 
D)  $37,000

Question 18

Certified Management Accountants (CMA) must complete a specified number of continuing professional education credits each reporting period. Which of the four standards of ethical conduct issued by the Institute of Management Accountants likely motivated this requirement?

Accepted Answer

A)  Confidentiality 
B)  Competence 
C)  Integrity 
D)  Objectivity 
A)  Confidentiality 
B)  Competence 
C)  Integrity 
D)  Objectivity

Question 19

A company uses sandpaper to prepare its product for finishing. Most manufacturers would classify the sandpaper as direct material because it is physically consumed in the production process.

Accepted Answer

A) True 
 B)False

Question 20

The sequence of activities through which an organization provides products to its customers is called a supply chain.

Accepted Answer

A) True 
 B)False

How does the Sarbanes-Oxley Act of 2002 affect the responsibilities of the managers of publicly held US corporations?

Senior executives focus on financial data when comparing the performance of their companies to that of competitors.

Which of the following is not one of the four Standards of Ethical Conduct for Management Accountants?

What part do management accountants play in corporate governance?

Identify the false statement regarding how product costs in a manufacturing company differ from product costs in a service or merchandising company.

A merchandising business paid $2,500 to purchase inventory and $50 to have the inventory delivered to its customers. Its product costs were $2,550.

What are indirect costs, and how are the indirect costs incurred to make products accounted for?

Manufacturing costs that cannot be traced to specific units of product in a cost-effective manner are:

Select the incorrect statement regarding costs and expenses.

Financial accounting information is reported periodically, primarily at the end of each fiscal year. When is managerial accounting information reported to managers of an organization?

How do information needs of employees change moving up the organization chart?

What costs are treated as product costs for a manufacturing company?

Which of the following best represents a characteristic of managerial accounting?

A potential negative effect of using a just in time inventory system is the immediate impact of labor strikes on the transportation system such as railroad.

Certified Management Accountants (CMA) must complete a specified number of continuing professional education credits each reporting period. Which of the four standards of ethical conduct issued by the Institute of Management Accountants likely motivated this requirement?

A company uses sandpaper to prepare its product for finishing. Most manufacturers would classify the sandpaper as direct material because it is physically consumed in the production process.

The sequence of activities through which an organization provides products to its customers is called a supply chain.

An Introduction to Accounting

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Internal Controls, Accounting for Cash, and Ethics

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Proprietorships, Partnerships, and Corporations

Financial Statement Analysis

Cost Behavior, Operating Leverage, and Profitability Analysis

Cost Accumulation, Tracing, and Allocation

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Planning for Capital Investments

Filters

Exam 10: An Introduction to Management Accounting

How does the Sarbanes-Oxley Act of 2002 affect the responsibilities of the managers of publicly held US corporations?

Senior executives focus on financial data when comparing the performance of their companies to that of competitors.

Which of the following is not one of the four Standards of Ethical Conduct for Management Accountants?

What part do management accountants play in corporate governance?

Identify the false statement regarding how product costs in a manufacturing company differ from product costs in a service or merchandising company.

A merchandising business paid $2,500 to purchase inventory and $50 to have the inventory delivered to its customers. Its product costs were $2,550.

What are indirect costs, and how are the indirect costs incurred to make products accounted for?

Manufacturing costs that cannot be traced to specific units of product in a cost-effective manner are:

Select the incorrect statement regarding costs and expenses.

Financial accounting information is reported periodically, primarily at the end of each fiscal year. When is managerial accounting information reported to managers of an organization?

How do information needs of employees change moving up the organization chart?

What costs are treated as product costs for a manufacturing company?

Which of the following best represents a characteristic of managerial accounting?

A potential negative effect of using a just in time inventory system is the immediate impact of labor strikes on the transportation system such as railroad.

Certified Management Accountants (CMA) must complete a specified number of continuing professional education credits each reporting period. Which of the four standards of ethical conduct issued by the Institute of Management Accountants likely motivated this requirement?

A company uses sandpaper to prepare its product for finishing. Most manufacturers would classify the sandpaper as direct material because it is physically consumed in the production process.

The sequence of activities through which an organization provides products to its customers is called a supply chain.

An Introduction to Accounting

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Internal Controls, Accounting for Cash, and Ethics

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Proprietorships, Partnerships, and Corporations

Financial Statement Analysis

Cost Behavior, Operating Leverage, and Profitability Analysis

Cost Accumulation, Tracing, and Allocation

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Planning for Capital Investments

Filters