Question 1

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

Accepted Answer

A) True 
 B)False  False

Question 2

Costing is micro level, strategy is macro level.

Accepted Answer

A) True 
 B)False  True

Question 3

Which one of the following is the odd one out?

Accepted Answer

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

Question 4

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.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

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

Question 7

Which one of the following statements is not true?

Accepted Answer

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 8

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

Accepted Answer

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.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Which one of the following statements is not true?

Accepted Answer

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 12

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.

Accepted Answer

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 13

Financial accounting reports: Please select all that apply.

Accepted Answer

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 14

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

Accepted Answer

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 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

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

Question 17

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.

Accepted Answer

A) True 
 B)False

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.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

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.

Exam 7: Cost and Management Accounting in Context

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

Costing is micro level, strategy is macro level.

Which one of the following is the odd one out?

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.

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

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

Which one of the following statements is not true?

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

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

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

Which one of the following statements is not true?

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.

Financial accounting reports: Please select all that apply.

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

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

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

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.

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.

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

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