Question 1

Value creation is a central focus for managers and only refers to shareholder value.

Accepted Answer

A) True 
 B)False

Question 2

Choose the statement that best completes this sentence: 'Traditional management accounting focuses on .....'

Accepted Answer

A)  budgets, financial performance measures and cost control. 
B)  financial performance measures, external reporting and cost elimination. 
C)  non-financial performance measures, external reporting and cost control. 
D)  external reporting, labour-related activity measures and cost elimination.

Question 3

Strategies:

Accepted Answer

A)  are directions that a firm intend to take in the long term. 
B)  describe the way the firm competes. 
C)  are the same as objectives and goals. 
D)  are independent of the firm's mission statement.

Question 4

Which of the following would not be likely as a consistent focus for a firm following a product differentiation strategy?

Accepted Answer

A)  Quality 
B)  Delivery 
C)  Product innovation 
D)  Cost reduction

Question 5

The costs of providing information to management should be less than the benefits. Which of the following are costs of management accounting information?
i. Salary cost of management accounting personnel
ii. Computer operating costs
iii. Managers' time in reading and acting on the information

Accepted Answer

A)  i, ii and iii 
B)  ii and iii only 
C)  i and iii only 
D)  None of the given answers

Question 6

Modern management accounting systems include techniques that support an organisation's:

Accepted Answer

A)  strategy. 
B)  mission. 
C)  goals. 
D)  decisions.

Question 7

Choose the statement that best completes this sentence: 'All management accounting information ....'

Accepted Answer

A)  has a focus on past costs. 
B)  has a focus on future costs. 
C)  is collected as required by internal management of the firm. 
D)  is constrained by the requirements of the Australian Accounting Standards.

Question 8

Which of the following statements regarding management accounting information is false?

Accepted Answer

A)  The cost of providing the information must be considered in the light of the benefits received from the information. 
B)  All information derived is necessary despite the cost. 
C)  The information entails both costs and benefits. 
D)  The cost of the information includes the time spent by the user to read, understand and use the information.

Question 9

Which of the following statement/s about management accounting is/are true?
i. It is a part of an organisation's management information system.
ii. It is relied on by managers to plan and control an organisation's operations.
iii. It is relied on by external users to make investment decisions.

Accepted Answer

A)  i and ii 
B)  i, ii and iii 
C)  iii 
D)  ii

Question 10

Which of the following statements is correct?

Accepted Answer

A)  Management accounting is a subset of cost accounting. 
B)  Cost accounting is a subset of management accounting. 
C)  Cost accounting is no longer required in today's competitive environment. 
D)  Management accounting in today's environment is the same as it was many years ago.

Question 11

Jasmine Dol is a junior management accountant at Hey Hey Toys Ltd. Jasmine is given the task of compiling a cost-benefit analysis report on whether the company should purchase an expensive new machine from Beta Ltd, where her brother is the new sales manager. Jasmine did not tell anyone in Hey Hey Toys about her brother's new job. In preparing her report, Jasmine overstates the qualitative benefits and understates the costs associated with this new machine, in order to help her brother make his first sale as the new sales manager.
Discuss why and how Jasmine has deviated from the IFAC's code of ethics.

Accepted Answer

The answer of Jasmine Dol is a junior management accountant...

Question 12

There is no overlap between the two accounting streams management and financial accounting.
FALSE

Accepted Answer

A) True 
 B)False

Question 13

The costing system is the part of the accounting information system that is common to both financial and management accounting.

Accepted Answer

A) True 
 B)False

Question 14

Budgets provide information to help manage resources and are supported by the financial accounting function.

Accepted Answer

A) True 
 B)False

Question 15

When a firm adopts a strategy of being a low-cost producer and sells its products at a price lower than its competitors, the firm is said to be using a strategy of cost leadership.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following does not represent the ethics of professional accountants?

Accepted Answer

A)  Competence and confidentiality 
B)  Integrity and objectivity 
C)  Professional scepticism and efficiency 
D)  Objectivity and confidentiality

Question 17

Accountants with a CPA qualification are only able to work as financial accountants.

Accepted Answer

A) True 
 B)False

Question 18

Management accounting focuses on:

Accepted Answer

A)  compliance with the accounting standards. 
B)  meeting the needs of external users. 
C)  effective and efficient management of resources. 
D)  financial data only.

Question 19

What type of accounting system is part of an organisation's management information system for internal use only?

Accepted Answer

A)  Financial accounting 
B)  Management accounting 
C)  Governmental accounting 
D)  All of the given answers

Question 20

The theory that suggests that a firm's management accounting system is influenced by factors such as the external environment and technology is called contingency theory.

Accepted Answer

A) True 
 B)False

Exam 1: Management Accounting: Information for Creating Value and Managing Resources

Value creation is a central focus for managers and only refers to shareholder value.

Choose the statement that best completes this sentence: 'Traditional management accounting focuses on .....'

Strategies:

Which of the following would not be likely as a consistent focus for a firm following a product differentiation strategy?

The costs of providing information to management should be less than the benefits. Which of the following are costs of management accounting information? i. Salary cost of management accounting personnel ii. Computer operating costs iii. Managers' time in reading and acting on the information

Modern management accounting systems include techniques that support an organisation's:

Choose the statement that best completes this sentence: 'All management accounting information ....'

Which of the following statements regarding management accounting information is false?

Which of the following statement/s about management accounting is/are true? i. It is a part of an organisation's management information system. ii. It is relied on by managers to plan and control an organisation's operations. iii. It is relied on by external users to make investment decisions.

Which of the following statements is correct?

There is no overlap between the two accounting streams management and financial accounting. FALSE

The costing system is the part of the accounting information system that is common to both financial and management accounting.

Budgets provide information to help manage resources and are supported by the financial accounting function.

When a firm adopts a strategy of being a low-cost producer and sells its products at a price lower than its competitors, the firm is said to be using a strategy of cost leadership.

Which of the following does not represent the ethics of professional accountants?

Accountants with a CPA qualification are only able to work as financial accountants.

Management accounting focuses on:

What type of accounting system is part of an organisation's management information system for internal use only?

The theory that suggests that a firm's management accounting system is influenced by factors such as the external environment and technology is called contingency theory.