Deck 1: The Accountants Role in the Organization

Question 1

Financial accounting is concerned primarily with:

A)external reporting to investors, creditors, and government authorities
B)cost planning and cost controls
C)profitability analysis
D)providing information for strategic and tactical decisions

Answer 1

A

Question 2

Financial accounting:

A)focuses on the future and includes activities such as preparing next year's operating budget
B)must comply with GAAP (generally accepted accounting principles)
C)reports include detailed information on the various operating segments of the business such as product lines or departments
D)is prepared for the use of department heads and other employees

Answer 2

B

Question 3

A data warehouse or infobarn:

A)is reserved for exclusive use by the CFO
B)is primarily used for financial reporting purposes
C)stores information used by different managers for multiple purposes
D)gathers only nonfinancial information

Answer 3

C

Question 4

Financial accounting provides the primary source of information for:

A)decision making in the finishing department
B)improving customer service
C)preparing the income statement for shareholders
D)planning next year's operating budget

Question 5

Which of the following groups would be LEAST likely to receive detailed management accounting reports?

A)stockholders
B)sales representatives
C)production supervisors
D)managers

Question 6

Which of the following descriptors refers to management accounting information?

A)It is verifiable and reliable.
B)It is driven by rules.
C)It is prepared for shareholders.
D)It provides reasonable and timely estimates.

Question 7

Which of the following people is LEAST likely to use management accounting information?

A)the controller
B)a shareholder evaluating a stock investment
C)the treasurer
D)an assembly department supervisor

Question 8

Management accounting includes all of the following EXCEPT

A)implementing strategies
B)developing budgets
C)preparing special studies and forecasts
D)preparing the statement of cash flows

Question 9

An Enterprise Resource Planning System can best be described as:

A)a collection of programs that use a variety of unconnected databases
B)a single database that collects data and feeds it into applications that support each of the company's business activities, such as purchases, production, distribution, and sales
C)a database that is primarily used by a purchasing department to determine the correct amount of a particular supply item to purchase
D)a sophisticated means of linking two or more companies to facilitate their planning processes

Question 10

Which of the following types of information are used in management accounting?

A)financial information
B)nonfinancial information
C)information focused on the long term
D)All of these answers are correct.

Question 11

Cost accounting:

A)provides information on the efficiency of factory labor
B)provides information on the cost of servicing commercial customers
C)provides information on the performance of an operating division
D)All of these answers are correct.

Question 12

Modern cost accounting plays a role in:

A)planning new products
B)evaluating operational processes
C)controlling costs
D)All of these answers are correct.

Question 13

Financial accounting provides a historical perspective, whereas management accounting emphasizes:

A)the future
B)past transactions
C)a current perspective
D)reports to shareholders

Question 14

Management accounting information includes:

A)tabulated results of customer satisfaction surveys
B)the cost of producing a product
C)the percentage of units produced that are defective
D)All of these answers are correct.

Question 15

The approaches and activities of managers in short-run and long-run planning and control decisions that increase value for customers and lower costs of products and services are known as:

A)value chain management
B)enterprise resource planning
C)cost management
D)customer value management

Question 16

Which of the following statements refers to management accounting information?

A)There are no regulations governing the reports.
B)The reports are generally delayed and historical.
C)The audience tends to be stockholders, creditors, and tax authorities.
D)It primarily measures and records business transactions.

Question 17

Managers use management accounting information to ________ strategy.

A)choose
B)communicate
C)implement
D)All of these answers are correct.

Question 18

The person most likely to use ONLY financial accounting information is a:

A)factory shift supervisor
B)vice president of operations
C)current shareholder
D)department manager

Question 19

Cost accounting provides all of the following EXCEPT:

A)information for management accounting and financial accounting
B)pricing information from marketing studies
C)financial information regarding the cost of acquiring resources
D)nonfinancial information regarding the cost of operational efficiencies

Question 20

Management accounting:

A)focuses on estimating future revenues, costs, and other measures to forecast activities and their results
B)provides information about the company as a whole
C)reports information that has occurred in the past that is verifiable and reliable
D)provides information that is generally available only on a quarterly or annual basis

Question 21

Financial accounting is broader in scope than management accounting.

Question 22

Management accounting has to strictly follow the rules of generally accepted accounting principles for the purposes of measurement and reporting.

Question 23

Is financial accounting or management accounting more useful to an operations manager? Why?

Question 24

Cost management involves long-term and short-term decisions that attempt to increase value for customers and lower costs of products or services.

Question 25

Describe management accounting and financial accounting.

Question 26

The balance sheet, income statement, and statement of cash flows are used for financial accounting, and also for management accounting.

Question 27

Is it possible to have an active cost management program without an Enterprise Resource Planning (ERP)System?

Question 28

Cost management is narrowly focused on a continuous reduction of costs.

Question 29

Cost management provides information that helps increase value for customers.

Question 30

An ideal database should store information in a way that allows different managers to access the information they need.

Question 31

Which of the following statements concerning an organization's strategy is NOT true?

A)Strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives.
B)Management accountants provide input to help managers formulate strategy.
C)A good strategy will always overcome poor implementation.
D)Businesses usually follow one of two broad strategies: offering a quality product at a low price, or offering a unique product or service priced higher than the competition.

Question 32

What competitive advantage could a company obtain from a successful cost management program?

Question 33

An Enterprise Resource Planning (ERP)System is a single database that collects data and feeds into applications that support each of the company's business activities, such as purchases, production, distribution, and sales.

Question 34

Cost accounting measures and reports short-term, long-term, financial, and non financial information.

Question 35

Management accounting information focuses on external reporting.

Question 36

Cost accounting provides information only for management accounting purposes.

Question 37

Strategy specifies:

A)how an organization matches its own capabilities with the opportunities in the marketplace
B)standard procedures to ensure quality products
C)incremental changes for improved performance
D)the demand created for products and services

Question 38

For each report listed below, identify whether the major purpose of the report is for (1)routine internal reporting, (2)nonroutine internal reporting, or for (3)external reporting to investors and other outside parties.
Item:
a. study detailing sale information of the top-ten selling products
b. weekly report of total sales generated by each store in the metropolitan area
c. annual Report sent to shareholders
d. monthly report comparing budgeted sales by store to actual sales

Question 39

Modern cost accounting takes the perspective that collecting cost information is a function of the management decisions being made.

Question 40

Managers always require the information in an accounting system to be presented in the same format.

Question 41

Briefly describe how managers make use of management accounting information.

Question 42

Strategy does NOT specify how an organization matches its capabilities with the opportunities in the marketplace.

Question 43

Identifying a company's most important customers does NOT help formulate strategy.

Question 44

Southwest Airlines is an example of a company that pursues a product differentiation strategy.

Question 45

Management accountants should have little or no role in deciding on a company's strategy.

Question 46

The best-designed strategies and the best-developed capabilities are useless unless they are effectively executed.

Question 47

Strategy is formulated by answering all of the following EXCEPT:

A)Who are our most important customers?
B)Is industry demand growing or shrinking?
C)Will our external auditors certify our strategy?
D)How sensitive are purchasers to price, quality, and service?

Question 48

Generally, companies follow one of two broad strategies: offering a quality product at a low price, or offering a unique product or service priced higher than the competition. Assume you are opening a small food outlet across the street from your campus. How might that business be operated under each of the two broad strategies? Consider the following specific operational areas:
a. target customers
b. products offered
c. product pricing
d. location choice
e. advertising content
f. advertising media

Question 49

Strategic cost management describes cost management that specifically focuses on strategic issues.

Question 50

The key to a company's success is always to be the low cost producer in a particular industry.

Question 51

Companies generally follow one of two basic strategies: 1)providing a quality product or service at low prices, or 2)offering a unique product or service often priced higher than competing products.

Question 52

Which of the following is NOT one of the questions management accountants might attempt to help answer in the formulation of strategy?

A)Who are our most important customers?
B)What substitute products exist in the marketplace?
C)Does the strategy comply with GAAP (Generally Accepted Accounting Principles)?
D)Will adequate cash be available to implement the strategy?

Question 53

Generally, companies follow one of two broad strategies: offering a quality product at a low price, or offering a unique product or service priced higher than the competition. Is it possible to follow a strategy that is "in the middle"?

Question 54

The key to a company's success is creating value for customers while differentiating itself from its competitors.

Question 55

The best-designed strategies are valuable whether or not they are effectively implemented.

Question 56

Companies can decide on an appropriate strategy based strictly on internally available information.

Question 57

Describe the major differences between management accounting and financial accounting for the following:
1. Primary users
2. Focus and emphasis
3. Rules of measurement and reporting

Question 58

In designing strategy, a company must match the opportunities and threats in the marketplace with:

A)those of the CFO (Chief Financial Officer)
B)its resources and capabilities
C)branding opportunities
D)capabilities of current suppliers

Question 59

What is strategy? Briefly describe the two broad types of strategies that companies may choose to pursue.

Question 60

Which of the following statements about customer value is NOT true?

A)Customer value is shown in a corporation's balance sheet.
B)Creating value for customers is an important part of planning and implementing strategy.
C)How our product delivers customer value should be determined as part of a company's strategy formulation.
D)It is possible to simultaneously lower cost and increase customer value.

Question 61

Processing orders and shipping products or services to customers (also called outbound logistics)is also known as

A)customer focus
B)distribution
C)marketing
D)supply chain

Question 62

________ is the generation of, and experimentation with, ideas related to new products, services, or processes.

A)Research and development
B)Design of products, services, or processes
C)Production
D)Marketing

Question 63

R&D, production, and customer service are business functions that are all included as part of:

A)the value chain
B)benchmarking
C)marketing
D)the supply chain

Question 64

________ is a philosophy in which management improves operations throughout the value chain to deliver products and services that exceed customer expectations.

A)Cost-benefit approach
B)Customer focus
C)Customer relationship management
D)Total quality management

Question 65

________ is the delivery of products or services to customers.

A)Distribution
B)Customer service
C)Production
D)Design of products, services, or processes

Question 66

Customers are demanding improved performance related to:

A)reduced costs
B)both reduced costs and increased quality
C)lower costs, improved quality, and improved customer service
D)All of these answers are correct.

Question 67

________ describe(s)the flow of goods, services, and information from the purchase of materials to the delivery of products to consumers, regardless of whether those activities occur in the same organization or with other organizations.

A)Supply chain
B)Key success factors
C)Continuous improvement
D)Customer focus

Question 68

________ aims to improve operations throughout the value chain and to deliver products and services that exceed customer expectations.

A)Total Quality Management
B)Innovation
C)Customer response time
D)Cost and efficiency

Question 69

________ is the detailed planning and engineering of products, services, or processes.

A)Distribution
B)Design of products, services, or processes
C)Production
D)Marketing

Question 70

Customer relationship management initiatives use technology to coordinate all:

A)production activities
B)research activities
C)customer-facing activities
D)inventory management activities

Question 71

________ is the acquisition, coordination, and assembly of resources to produce a product or deliver a service.

A)Research and development
B)Customer service
C)Production
D)Marketing

Question 72

________ is a strategy that integrates people and technology in all business functions to enhance relationships with customers, partners, and distributors.

A)Supply-chain analysis
B)Customer relationship management
C)Value-chain analysis
D)Continuous quality improvement

Question 73

Place the four business functions in the order they appear along the value chain:

A)Customer Service, Design, Production, Marketing
B)Customer Service, Marketing, Production, Design
C)Design, Production, Marketing, Customer Service
D)Design, Customer Service, Production, Marketing

Question 74

Which of the following statements about a company's supply chain is true?

A)A company's supply chain is always internal to a firm.
B)A company's supply chain is always external to a firm.
C)A company's supply chain is the same thing as a company's value chain.
D)Management accountants provide information to enhance a company's supply chain.

Question 75

The value chain is the sequence of business functions in which:

A)value is deducted from the products or services of an organization
B)value is proportionately added to the products or services of an organization
C)products and services are evaluated with respect to their value to the supply chain
D)usefulness is added to the products or services of an organization

Question 76

________ describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same organization or in other organizations.

A)The value chain
B)The supply chain
C)Product differentiation
D)Distribution

Question 77

Which item is NOT an area that customers want to see improved levels of performance in?

A)innovation
B)quality
C)cost and efficiency
D)profit

Question 78

Whose perceptions of the company's products or services are the most important to the manager?

A)board of directors' perception
B)customers' perception
C)president's perception
D)stockholders' perception

Question 79

________ is the manner by which companies promote and sell their products or services to customers or perspective customers.

A)Distribution
B)Customer service
C)Research and development
D)Marketing

Question 80

________ is the after-sale support provided to customers.

A)Distribution
B)Customer service
C)Production
D)Marketing