Question 1

To be useful to management, accounting information must:

Accepted Answer

A)   be prepared in accordance with general-purpose financial reports.
B)   have the potential to affect decisions and influence behaviour.
C)   be completely accurate.
D)   be in the form of financial statements. B

Question 2

Short-term operating decisions can be translated into a budget, which is a plan of action expressed in monetary terms that compels management to look ahead and coordinate their activities.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following is part of the planning process?

Accepted Answer

A)   Deciding on the objectives.
B)   Detailing how the plans are to be achieved.
C)   Ensuring that the plans will be achieved.
D)   All of the above. D

Question 4

Planning and control decisions are similar in that both:

Accepted Answer

A)   tend to have a short-run focus.
B)   focus on achieving the organisation's goals.
C)   increase the risk to owners and creditors.
D)   involve the setting of goals.

Question 5

A control system is limited in its application, as it depends on the motivation of individuals.

Accepted Answer

A) True 
 B)False

Question 6

Name three ways that accounting information can assist managers who make production decisions.

Accepted Answer

The answer of Name three ways that accounting information can...

Question 7

Which of the following characteristics of information is desired by management?

Accepted Answer

A)   Regular
B)   Timely
C)   Detailed
D)   All of the above

Question 8

The Australian Customs and Border Protection Service and the Australian Taxation Office have a statutory right of access to internal accounting information.

Accepted Answer

A) True 
 B)False

Question 9

Ordinary Office Products, Inc., a retail office supply company, has a single outlet in a large metropolitan area. The company has a policy of delivering any size order, even a bottle of Liquid Paper, to any customer, regardless of the distance. Management believes that without this delivery policy the company will not be able to maintain its market share. Since delivery costs are considered a selling expense and not a product cost, the company has a positive gross margin. That is, the company appears to be making money on its sales. The problem is that the company has shown an operating loss for each of the past three years and is on the verge of having its bank financing withdrawn. Management has been attempting to solve its profitability problems by increasing sales of its delivered merchandise.

Accepted Answer

The answer of Ordinary Office Products, Inc., a retail office...

Question 10

The monitoring process allows corrective action to be planned and taken after comparing actual performance with a predetermined plan.

Accepted Answer

A) True 
 B)False

Question 11

In a dynamic economic environment, there is often the need to revise operating decisions in order to meet long-term objectives, but this will not impact on strategic decisions as these are related to policy changes and are not affected by operating decisions.

Accepted Answer

A) True 
 B)False

Question 12

Planning is the process of:

Accepted Answer

A)   ensuring that a reasonable profit is made each year.
B)   creating a 'roadmap' for achieving corporate goals and objectives.
C)   just setting goals and objectives.
D)   ensuring that assets are properly used.

Question 13

In order for a banker to make judgements about the future needs and prospects of an entity in deciding whether to lend money, additional detailed information in the form of future cash flows may be required.

Accepted Answer

A) True 
 B)False

Question 14

Describe the four major stages involved in planning and controlling an organisation.

Accepted Answer

The answer of Describe the four major stages involved in...

Question 15

The efficiency and effectiveness of a control system can be affected by the costs associated with running the system.

Accepted Answer

A) True 
 B)False

Question 16

The identification of the origin of controllable costs and income allows at least one manager to be responsible for the costs, and:

Accepted Answer

A)   results in minimising costs and maximising profits.
B)   results in more efficient operations.
C)   makes the manager accountable for each item on a performance report.
D)   all of the above are correct.

Question 17

Decisions that require managers to evaluate the accomplishments of their organisation, and to make changes if the organisation is not meeting its goals, are usually referred to as:

Accepted Answer

A)   regulatory decisions.
B)   implementation decisions.
C)   planning decisions.
D)   control decisions.

Question 18

Which of the following is essential for management before it decides whether the business is succeeding or failing?

Accepted Answer

A)   Accounts receivable.
B)   A set of objectives.
C)   A large organisation.
D)   More current assets than non-current assets.

Question 19

Distinguish managerial accounting from financial accounting. Your answer should include a brief discussion of differences in the types of information provided to users as well as differences in the identity of users of financial and managerial accounting information.

Accepted Answer

The answer of Distinguish managerial accounting from financial accounting. Your...

Question 20

Many benefits associated with an information system are qualitative in nature.

Accepted Answer

A) True 
 B)False

Exam 12: An Introduction to Management Accounting: a Strategic Perspective

To be useful to management, accounting information must:

Short-term operating decisions can be translated into a budget, which is a plan of action expressed in monetary terms that compels management to look ahead and coordinate their activities.

Which of the following is part of the planning process?

Planning and control decisions are similar in that both:

A control system is limited in its application, as it depends on the motivation of individuals.

Name three ways that accounting information can assist managers who make production decisions.

Which of the following characteristics of information is desired by management?

The Australian Customs and Border Protection Service and the Australian Taxation Office have a statutory right of access to internal accounting information.

The monitoring process allows corrective action to be planned and taken after comparing actual performance with a predetermined plan.

In a dynamic economic environment, there is often the need to revise operating decisions in order to meet long-term objectives, but this will not impact on strategic decisions as these are related to policy changes and are not affected by operating decisions.

Planning is the process of:

In order for a banker to make judgements about the future needs and prospects of an entity in deciding whether to lend money, additional detailed information in the form of future cash flows may be required.

Describe the four major stages involved in planning and controlling an organisation.

The efficiency and effectiveness of a control system can be affected by the costs associated with running the system.

The identification of the origin of controllable costs and income allows at least one manager to be responsible for the costs, and:

Decisions that require managers to evaluate the accomplishments of their organisation, and to make changes if the organisation is not meeting its goals, are usually referred to as:

Which of the following is essential for management before it decides whether the business is succeeding or failing?

Distinguish managerial accounting from financial accounting. Your answer should include a brief discussion of differences in the types of information provided to users as well as differences in the identity of users of financial and managerial accounting information.

Many benefits associated with an information system are qualitative in nature.