Deck 1: Accounting As a Tool for Management

Question 1

Management accounting is the generation of relevant information and analysis provided to external users.

Answer 1

False

Question 2

Managerial accounting differs from financial accounting in that managerial accounting has no comparable set of rules governing what information must be provided to decision makers or how that information is presented.

Answer 2

True

Question 3

Managerial accounting information is always prepared by the controller or cost accountant.

Answer 3

False

Question 4

If a company follows a strategy of product differentiation,it will seek ways to set its products apart from competitors' in terms of quality,design or service.

Question 5

One purpose of planning activities is to monitor day-to-day operations to ensure that processes are operating as expected.

Question 6

Under a build strategy,a company aims to increase its market share and competitive position relative to others in the industry,maximizing its short-term earnings and positive cash flow.

Question 7

Managerial accounting information provides feedback about how well the organization is implementing its strategy and achieving its goals.

Question 8

For the product differentiation strategy,companies will want information on quality,such as defect rates,percentage of on-time deliveries,and customer satisfaction.

Question 9

The American Institute of Certified Public Accountants is the leading organization for management accountants in the United States.

Question 10

Preparers of managerial accounting information are generally not active participants in the decision making process.

Question 11

Managerial accounting reports historical information,often with the purpose of comparing actual results to budgeted results.

Question 12

The four strategies based on a firm's approach to market share growth are build,hold,harvest and divest.

Question 13

The task of assessing how well employees have performed relative to expectations is a controlling activity.

Question 14

Managerial accounting provides reports and information for a range of decision makers outside an organization.

Question 15

Managerial accounting is designed to assist managers with four general activities: planning,controlling,evaluating,and decision making.

Question 16

Long-term planning is often referred to as strategic planning.

Question 17

A company that focuses on product differentiation does not need to monitor product costs because if the quality is sufficient customers will pay the price.

Question 18

Decision makers might have a long list of information they would find helpful,and they are generally not willing to sacrifice accuracy for having the information quickly.

Question 19

All other things held equal,the more frequent the controlling activity,the faster an out-of-control process can be corrected.

Question 20

The primary users of managerial accounting information are managers and decision makers.

Question 21

The leading professional organization for management accountants is the

A)American Association of Management Accountants.
B)Institute of Management Accountants.
C)National Association of Accountants.
D)Society of Management Accountants.

Question 22

Ethical behavior is knowing right from wrong and conducting yourself accordingly,so that your decisions are consistent with your own value system and the values of those affected by your decisions.

Question 23

The goal of an ERP system is to integrate all data from the company's many business processes into a single information system.

Question 24

A supply chain is a network of facilities that procure raw materials,transform them into intermediate goods and then into final products,and deliver the final products to customers through a distribution system.

Question 25

The balanced scorecard uses only nonfinancial information such as customer satisfaction or employee turnover to measure performance.

Question 26

In the context of managerial accounting,relevant information

A)Is information that will make a difference in the decision.
B)Is information that has been provided by the controller.
C)Must be provided in quantitative terms.
D)Must be analyzed by the chief financial officer before being provided to managers.

Question 27

The purpose of financial statements contained in annual reports is to

A)Communicate information about the financial health of a company to external users.
B)Assist internal managers in making pricing decisions.
C)Both communicate information about the financial health of a company to external users and assist internal managers in making pricing decisions.
D)Neither communicate information about the financial health of a company to external users nor assist internal managers in making pricing decisions.

Question 28

A firm's code of conduct is based on a set of core values that are meant to guide employees' behavior.

Question 29

An example of an external user is a

A)Company president.
B)Plant manager.
C)Payroll supervisor
D)Creditor.

Question 30

Which of the following is not a way managers use managerial accounting?

A)Provide information used in planning,evaluation and controlling functions within an organization.
B)To assure appropriate use of its resources
C)To assure accountability for its resources
D)To communicate information to stockholders

Question 31

Ethical business behavior is compliance with the law.

Question 32

Good managerial accounting information helps

A)Creditors decide on good credit risks.
B)Managers to do their jobs.
C)Stockholders make informed investment decisions.
D)All of these ans choices are correct.

Question 33

Managerial accounting is used by managers to

A)Plan.
B)Evaluate.
C)Control.
D)All of these ans choices are correct.

Question 34

A harvest strategy focuses on short-term profits and cash,even at the expense of market share.

Question 35

A tool that managerial accountants have developed to assist in monitoring organizational performance is the balanced scorecard.

Question 36

Managerial accounting is used by managers to

A)Assure appropriate use of an organization's resources.
B)Assure accountability for an organization's resources.
C)Provide information used in planning,evaluation and controlling functions within an organization.
D)All of these ans choices are correct.

Question 37

A divest strategy is appropriate when a company desires to enter a particular market.

Question 38

Just-in-time inventory management is an inventory strategy that focuses on reducing waste and inefficiency by ordering inventory items so that they arrive just when they are needed.

Question 39

The supply chain's goal is to reduce or eliminate defects.

Question 40

Just-in-time implementations are simple and take little or no effort to implement and will work for most companies.

Question 41

All public companies that are traded on a stock exchange and governed by the Securities and Exchange Commission must prepare financial statements following

A)Accounting principles set by the Federal Trade Commission.
B)Generally accepted accounting principles.
C)Generally appropriate accounting standards.
D)Standards set by the Accounting Principles Board.

Question 42

Which of the following is not an activity in which managerial accounting is designed to assist managers?

A)Reporting
B)Controlling
C)Decision making
D)Evaluation

Question 43

Managerial accounting reports

A)Use historical information.
B)Compare actual results to budged results.
C)Project the results of certain decisions.
D)All of these ans choices are correct.

Question 44

The basic financial statements always report on transactions and events

A)That have already occurred.
B)That will occur in the future.
C)That are projected.
D)That have been audited.

Question 45

Most managerial decisions are made at which of the following levels?

A)Organization-level
B)Operating-segment level
C)Managerial accounting level
D)Presidential level

Question 46

Which of the following statements is not true?

A)A company is unlikely to be successful in the long run without adequate managerial accounting information to support decision making.
B)Managerial accounting is completely optional.
C)Managerial accounting reports are covered by rules comparable to those governing financial accounting.
D)Internal users have access to all the underlying data in managerial accounting reports.

Question 47

Decision makers sometimes might need to sacrifice precision for timeliness because

A)Receiving highly accurate information after the deadline has passed would be of no help.
B)The nature of many business decisions does not require precision in managerial accounting reports.
C)Both receiving highly accurate information after the deadline has passed would be of no help and the nature of many business decisions does not require precision in managerial accounting reports.
D)Neither receiving highly accurate information after the deadline has passed would be of no help nor the nature of many business decisions does not require precision in managerial accounting reports.

Question 48

An example of an external user is a

A)Managerial accountant.
B)Vice-President of Marketing.
C)Potential Investor.
D)Payroll Manager.

Question 49

Since external users of financial statements have no way to verify the reported information

A)They cannot make informed decisions from financial information.
B)FASB provides consequences to companies who distribute False - managerial accounting reports to outsiders.
C)GAAP provides a level of protection or assurance that the reports will follow certain standards.
D)None of these ans choices are correct.

Question 50

Since internal users have access to all the underlying data used for managerial accounting reports,

A)They can create reports that suit their particular decision making needs.
B)There is no need to use financial data in making decisions.
C)Both they can create reports that suit their particular decision making needs and there is no need to use financial data in making decisions.
D)Neither they can create reports that suit their particular decision making needs nor there is no need to use financial data in making decisions.

Question 51

Frequent feedback from planning,controlling,evaluating,and decision making activities creates which of the following types of decision-making process?

A)Linear
B)Circular
C)Scattered
D)None these ans choices are correct

Question 52

GAAP "rules" govern how transactions are

A)Valued.
B)Recorded.
C)Presented.
D)All of these ans choices are correct.

Question 53

Managerial accounting is designed to assist managers with which of the following activities?

A)Planning
B)Controlling
C)Evaluating
D)All of these ans choices are correct

Question 54

Long-term planning is often referred to as

A)Strategic planning.
B)Operational planning.
C)Goal-oriented planning.
D)External planning.

Question 55

The information provided by managerial accountants is not distributed to the general public because

A)To do so could provide competitors with vital information about corporate strategies and capabilities.
B)To do so would be against the Institute of Management Accountants' code of conduct.
C)To do so would be against generally accepted accounting principles.
D)To do so would violate federal trade laws.

Question 56

The information provided by managerial accountants is not disseminated to the general public because

A)To do so would violate federal trade laws
B)It would be too expensive to distribute the information
C)To do so would provide competitors with vital information about corporate strategies and capabilities.
D)All of these ans choices are reasons managerial accounting information is not disseminated to the general public.

Question 57

Which of the following is not a correct statement?

A)Managerial accounting benefits internal users.
B)Managerial accounting reports must comply with generally accepted accounting principles.
C)Managerial accounting includes reports and information prepared for a range of decision makers within the organization.
D)Managerial accounting reports come in a variety of formats.

Question 58

Managerial accounting reports historical information often with the purpose of

A)Comparing actual results to budgeted results
B)Helping managers to make decisions that will affect the company's future by projecting the results of certain decisions.
C)Both comparing actual results to budgeted results and helping managers to make decisions that will affect the company's future by projecting the results of certain decisions.
D)Neither comparing actual results to budgeted results nor helping managers to make decisions that will affect the company's future by projecting the results of certain decisions.

Question 59

Which of the following is not a characteristic of managerial accounting reports?

A)Managerial accounting reports are designed to provide the ultimate decision maker with the appropriate information.
B)Managerial accounting reports come in a variety of formats.
C)Managerial accounting reports are not distributed to the general public.
D)All of these ans choices are correct.

Question 60

Which of the following statements is not true?

A)Managerial accounting reports use historical information.
B)Managerial accounting must not use estimates in preparing reports.
C)Managerial accountants use historical amounts in developing future projections.
D)All of these ans choices are true.

Question 61

In monitoring product differentiation strategy and low-cost production strategy,a difference is that

A)For the product differentiation strategy,information on quality is emphasized while for low-cost production managers are more interested in the production process.
B)For the product differentiation strategy,information on the production process is emphasized while for low-cost production managers are more interested in maintaining quality.
C)For the product differentiation strategy,information on design is emphasized while for low-cost production managers are more interested in quality.
D)For the product differentiation strategy,information on quality is emphasized while for low-cost production managers are more interested in design.

Question 62

Michael Porter,a management strategy expert,developed a strategic framework in which a firm has ways to develop a competitive advantage.Which of the following is not one of the ways Porter suggested a firm use to develop a competitive advantage?

A)Product differentiation
B)Low cost production
C)Contribution differentiation
D)None of these ans choices are correct.

Question 63

Managerial accounting information is provided by which of the following individuals within an organization.

A)A controller
B)A plant accountant
C)A cost accountant
D)Any of these individuals can provide managerial accounting information.

Question 64

All other things held equal

A)The more frequent the controlling activity,the slower an out-of-control process will be corrected.
B)The more frequent the controlling activity,the faster an out-of-control process can be corrected.
C)The more frequent the controlling activity,the more likely employees are to ignore the control.
D)The more frequent the controlling activity,the less likely employees are to ignore the control.

Question 65

If a company follows a strategy of product differentiation,it will seek ways to set it products apart in terms of

A)Quality,design or service
B)Price,demand or service
C)Design,price or popularity
D)Quality,demand or life cycle

Question 66

Michael Porter,a management strategy expert,developed a strategic framework in which a firm has ways to develop a competitive advantage.Which of the following is one of the ways Porter suggested a firm use to develop a competitive advantage?

A)Supply chain management
B)Low-cost production
C)Just-in-time management
D)None of these ans choices are correct

Question 67

One of the primary products of the operations planning stage will likely be a

A)Projected income statement.
B)Pro forma balance sheet.
C)Budget.
D)None of these ans choices are correct.

Question 68

A company that wants to be successful needs to know:

A)What it wants to accomplish.
B)How it is going to achieve it
C)Both what it wants to accomplish and how it is going to achieve it.
D)Neither what it wants to accomplish nor how it is going to achieve it.

Question 69

Short-term planning is often referred to as

A)Strategic planning.
B)Operational planning.
C)Goal-oriented planning.
D)External planning.

Question 70

One purpose of controlling activities is to

A)Monitor day-to-day operations to ensure that processes are operating as expected.
B)Translate long-term strategy into a short-term plan.
C)To perform variance analysis and prepare performance reports.
D)None of these ans choices are correct.

Question 71

Which of the following is not an input into the monitoring activities relating to production?

A)Actual production rate and output
B)Checking output against the planned inventory level
C)Anticipated manufacturing capacity
D)All of these ans choices are monitoring activities

Question 72

The forefront of managerial activity is

A)Planning activities.
B)Controlling activities.
C)Evaluating activities.
D)Decision making.

Question 73

Which of the following is not a characteristic of a managerial accountant?

A)Just a number cruncher
B)Analyze and interpret financial data
C)Analyze and interpret operating data
D)Active participant in the decision making process

Question 74

Which of the following are strategies based on a firm's approach to market share growth?

A)Handle,Hermetic,Hold,or Harvest
B)Build,Hold,Harvest,or Divest
C)Handle,Expand,Low-Cost,or Divest
D)Build,Expand,Hold,or Divest

Question 75

Managers perform controlling activities

A)In real time as operations are occurring.
B)With a frequency such as once a day or once an hour.
C)Both in real time as operations are occurring and with a frequency such as once a day or once an hour.
D)Neither in real time as operations are occurring nor a frequency such as once a day or once an hour.

Question 76

Operational planning translates strategic planning into a plan to be completed within

A)Three months.
B)One year.
C)Five years.
D)Ten years.

Question 77

To help managers with their evaluations,managerial accountants often perform

A)Time tests.
B)Spot checks.
C)Variance analysis.
D)Performance reviews.

Question 78

If a company chooses a low-cost production strategy,the company will set itself apart from competitors in terms of

A)Quality
B)Lower selling price
C)Demand
D)High-cost design

Question 79

Which of the following are managers most likely to monitor whether using product differentiation or low-cost production strategy?

A)Customer satisfaction
B)The production process
C)External information such as competitor actions
D)None of these ans choices are correct.

Question 80

One of the planning activities that occupies managers is inventory planning.Which of the following is not an input into this planning process?

A)Projected sales forecasts
B)Variance analysis of actual versus budgeted inventory
C)Projected supply and prices
D)Anticipated manufacturing capacity