Deck 7: Cost and Management Accounting in Context

Question 1

Cost accounting is used in organizations to: Please select all that apply.

A) Determine selling prices for products and services.
B) Make long-term decisions.
C) Calculate product and service costs.
D) Monitor and review outcomes as they happen.

Answer 1

Determine selling prices for products and services.
Calculate product and service costs.
Monitor and review outcomes as they happen.

Question 2

The number of cost objects to which costs can be attached is limited to products, services, centres, activities, customers and distribution channels.

Answer 2

False

Question 3

Costing is micro level, strategy is macro level.

Answer 3

True

Question 4

The provision of costing information to managers undermines organizational efficiency and effectiveness.

Question 5

Which one of the following is the odd one out?

A) Informing operational decisions.
B) Gathering and attaching cost information to cost objects.
C) Establishing budgets and standard costs.
D) Analysing profitability.

Question 6

Management accounting is the application of the principles of accounting and financial management to create, protect, preserve and increase value for shareholders.

Question 7

Management accounting focuses on the long-term not the short term operations of organizations.

Question 8

Management accounting is an integral part of management. It requires the identification, generation, presentation, interpretation, and use of relevant information to: Please select all that apply.

A) Design reward strategies for executives and shareholders.
B) Safeguard tangible and intangible assets.
C) Measure and report financial and non-financial performance to management and other stakeholders.
D) Accumulate and allocate costs to cost objects.

Question 9

Which of the following are descriptions of cost and management accounting? Please select all that apply.

A) Future focus.
B) Reports on the past and present to inform the future.
C) External user focus.
D) Accounting data at the micro level.

Question 10

The form and content of both financial and cost and management accounting reports are highly regulated.

Question 11

Financial accounting reports exhibit a high degree of comparability with the financial accounting reports of other organizations while cost and management accounting reports of different organizations display no such comparability.

Question 12

Cost and management accounting information should: Please select all that apply.

A) Faithfully represent what it purports to represent.
B) Be understandable.
C) Be verifiable.
D) Be timely.

Question 13

Cost and management accounting information is subject to the cost-benefit rule.

Question 14

Materiality is a fundamental consideration in the preparation and presentation of financial accounting reports. However, materiality has no role to play in the production of cost and management accounting reports as every detail is relevant.

Question 15

Which one of the following statements is not true?

A) The cost accounting system is just an extension of the financial accounting system.
B) Cost and management accounting reports have both an internal and an external focus.
C) Financial accounting reports present internal information to external parties.
D) Internal financial costs are the only information that entities require to set the selling prices of products and services.

Question 16

Which one of the following statements is not true?

A) Cost and management accounting information is generated as frequently as required.
B) Accounting is the foundation of strategic and operational decision making.
C) Financial accounting and management accounting reports derive their financial information from completely diverse sources.
D) Costs are the foundation for decision making by management

Question 17

Cost and management accounting reports: Please select all that apply.

A) Are produced as frequently as required for the effective management of organisations.
B) Present detailed analysis of costs and selling prices.
C) Are highly comparable with the reports of other organisations.
D) Present information in a fluid format.

Question 18

As long as management are confident that the output of the accounting system is accurate, cost and management accounting information does not have to meet the enhancing qualitative characteristic of verifiability.

Question 19

Financial accounting reports: Please select all that apply.

A) Display a high degree of comparability with current and previous reports for the same and other organisations.
B) Are highly relevant for decision making and management purposes.
C) Present the required information in a highly regulated format.
D) Are usually produced annually.

Question 20

Which one of the following is not a qualitative characteristic of both financial accounting information and cost and management accounting information?

A) Comparability
B) Faithful representation
C) Relevance
D) Understandability