Deck 1: The Changing Role of Managerial Accounting in a Dynamic Business Environment

Question 1

The largest managerial accounting professional association in the U.S.is the Chartered Institute of Management Accountants.

Answer 1

False

Question 2

The upper limit on the production of goods and services if everything works perfectly is known as practical capacity.

Answer 2

False

Question 3

Decision making requires managers to choose among the available alternatives.

Answer 3

True

Question 4

Line positions are indirectly involved in operational activities.

Question 5

A controller is normally involved with preparing financial statements.

Question 6

Two things that all organizations have in common are a set of goals and information needed by managers.

Question 7

Non-value-added costs are the costs of activities that can be eliminated with no deterioration of product quality, performance, or perceived value.

Question 8

If a company has poor data governance practices, managers would have to worry that the managerial accounting data they receive is not what they need for their decisions, or that it would arrive too late or be inaccurate.

Question 9

The treasurer typically is responsible for raising capital and safeguarding the organization's assets.

Question 10

Middle-level managers would likely be considered internal users of accounting information rather than external users.

Question 11

The role of managerial accounting in organizations is the same as it has been over many years.

Question 12

The value chain is a managerial accounting tool that primarily assists in the valuation of assets.

Question 13

All companies define the value chain in the same way.

Question 14

In most situations, managerial accounting reports solve decision problems.

Question 15

The balanced scorecard is an important managerial accounting tool for short-run competitiveness.

Question 16

The nature of managerial accounting reports is to focus on the enterprise in its entirety.

Question 17

Controlling involves the coordination of daily business functions within an organization.

Question 18

The process of making sense of big data is known as data practice.

Question 19

The position of chief financial officer (CFO) is typically a staff position.

Question 20

Measuring the performance of managers and subunits is not an objective of managerial accounting.

Question 21

The role of managerial accounting information in assisting management is a(n):

A)financial-directing role.
B)attention-directing role.
C)planning and controlling role.
D)organizational role.
E)problem-solving role.

Question 22

Which of the following managerial functions involves a detailed financial and operational description of anticipated operations?

A)Decision making.
B)Planning.
C)Directing operational activities.
D)Controlling.
E)Measuring.

Question 23

Legitimate ethical issues rarely impact the managerial accountant.

Question 24

All financial professionals, including managerial accountants, have an obligation to themselves, their colleagues, and their organizations to adhere to high standards of ethical conduct.

Question 25

Which of the following is not an action performed in combination with information to pursue the goals of managerial accounting?

A)Identify.
B)Measure.
C)Invent.
D)Interpret.
E)Analyze.

Question 26

Which of the following statements about managerial accountants is false?

A)Managerial accountants more and more are considered "business partners."
B)Managerial accountants often are part of cross-functional teams.
C)An increasing number of organizations are segregating managerial accountants in
D)In a number of companies, managerial accountants make significant business decisions
E)The role of managerial accountants has changed considerably over the past decade.

Question 27

Which of the following statements best characterizes managerial accountants of the past?

A)They carried the job title of 'analysts'.
B)They were isolated into separate departments.
C)They were located in operating departments and worked with other managers.
D)They often took on leadership roles.
E)They worked in teams.

Question 28

Which of the following perspectives is normally absent in a balanced scorecard?

A)Financial.
B)Customer.
C)Internal operations.
D)Learning and innovation/growth.
E)None of these choices are correct.

Question 29

Transformation of the role of the managerial accountant within leading-edge companies has been

A)from analyst to number cruncher.
B)from number cruncher to trusted advisor.
C)from team leader to support department employee.
D)from business partner to financial historian.
E)from value creator to number cruncher.

Question 30

Which of the following business models considers financial, customer, internal operating, and other measures in the evaluation of performance?

A)Deterministic simulation.
B)Balanced scorecard.
C)Payoff matrix.
D)Decision tree.
E)Chart of operating performance (COP).

Question 31

The CMA is a professional certification that managerial accountants can earn to validate their skills and the specialized knowledge that they possess.

Question 32

Which of the following involves the coordination of daily business functions within an organization?

A)Decision making.
B)Planning.
C)Directing operational activities.
D)Controlling.
E)Motivating.

Question 33

Managerial accounting activity comprises a set of tools, systems and perspectives that add value to an organization by supporting five major objectives.Which one of these is not a supporting objective?

A)Provide information for decision making and planning.
B)Assist managers in directing and controlling operational activities.
C)Motivate managers and other employees toward the organization's goals.
D)Assess an organization's competitive position and long-term managerial efforts .
E)Focus on activities that occur at the top level of the organization.

Question 34

Wembley Company has set various goals, and management is now taking appropriate action to ensure that the firm achieves these goals.One such action is to reduce outlays for overhead, which have exceeded budgeted amounts.Which of the following functions best describes this process?

A)Decision making.
B)Planning.
C)Coordinating.
D)Controlling.
E)Organizing.

Question 35

Because managerial accounting reports rarely solve decision problems, what function does a managerial accountant use to assist managers in understanding issues contained within the information produced?

A)Internal business solution function.
B)Learning and growth function.
C)Theoretical capacity function.
D)Customer function.
E)Attention directing function.

Question 36

Which of the following functions is best described as choosing among available alternatives?

A)Decision making.
B)Planning.
C)Directing operational activities.
D)Controlling.
E)Budgeting.

Question 37

The day-to-day work of management teams will typically comprise all of the following activities except:

A)decision making.
B)planning.
C)cost minimizing.
D)directing operational activities.
E)controlling.

Question 38

Which of the following is not an objective of managerial accounting?

A)Providing information for decision making and planning.
B)Assisting in directing and controlling operations.
C)Maximizing profits and minimizing costs.
D)Measuring the performance of managers and subunits.
E)Motivating managers toward the organization's goals.

Question 39

In pursuing its goals, an organization does all of the following except:

A)Acquire resources.
B)Hire personnel.
C)Engage in an organized set of activities.
D)Focus on reducing the budget.
E)Engage in management team activities to make the best use of resources and people.

Question 40

Which of the following is correct regarding the changing role of managerial accounting?

A)The managerial accountant is crunching more numbers than ever before in leading-edge
B)The managerial accountant has been transformed into a financial historian in progressive
C)Managerial accountants are typically isolated in separate departments.
D)Forward-looking goals have transformed managerial accountants into business advisors.
E)Managerial accountants rarely have the title of analyst or take on leadership roles.

Question 41

All of the following are common reasons for forming cross-functional teams except:

A)to make decisions.
B)to engage in planning exercises.
C)to address operational problems from many perspectives.
D)to pull together individuals from a variety of specialties.
E)to minimize physical location requirements that a company occupies.

Question 42

Managerial accounting:

A)focuses only on historical data.
B)is governed by GAAP.
C)focuses primarily on the needs of personnel within the organization.
D)provides information for parties external to the organization.
E)focuses on financial statements and other financial reports.

Question 43

Which of the following employees at Fresh Brew Co.would likely be considered as holding a staff position?

A)The company's chief operating officer (COO).
B)The manager of a store located in Kansas City, Missouri.
C)The company's manager of the Midwest division.
D)The company's president of products nationwide.
E)The company's lead, in-house attorney and the company's chief financial officer (CFO).

Question 44

Managerial accounting:

A)is unregulated.
B)produces information that is useful only for manufacturing organizations.
C)is based exclusively on historical data.
D)is regulated by the Securities and Exchange Commission (SEC).
E)generally focuses on reporting information about the enterprise in its entirety rather than

Question 45

Which of the following employees would be considered as holding a line position?

A)Townhouse Corporation's vice-president for government relations.
B)The controller of Margin Motors.
C)A secretary employed by Signal Communications.
D)The manager of food and beverage services at a theme park.
E)None of the answers is correct.

Question 46

A company's leading executive is:

A)chief financial officer (CFO).
B)treasurer.
C)vice-president of accounting.
D)internal auditor.
E)chief executive officer (CEO).

Question 47

Managers directly involved in the provision of goods and services are ____________.

A)staff positions.
B)line positions.
C)general counsel positions.
D)human resource positions.
E)None of these is correct.

Question 48

All of the following entities would have a need for managerial accounting information except:

A)the state of Michigan.
B)an Internet provider.
C)a retail clothing outlet.
D)a bookkeeping service.
E)None of these responses is correct, as all of these entities would use managerial

Question 49

The chief managerial and financial accountant of an organization is the:

A)chief executive officer (CEO).
B)treasurer.
C)vice-president of accounting.
D)internal auditor.
E)chief financial officer (CFO).

Question 50

Which of the following characteristic(s) relate(s) more to managerial accounting than to financial accounting?

A)A focus on reporting to personnel within an organization.
B)A focus on reporting to external parties.
C)An area of accounting that is heavily regulated.
D)A focus on providing information that is relevant for planning, decision making, directing,
E)A focus on reporting to personnel within an organization and a focus on providing

Question 51

Employee empowerment involves encouraging and authorizing workers to take initiatives to:

A)improve operations.
B)reduce costs.
C)improve product quality.
D)improve customer service.
E)all of the answers are correct.

Question 52

In a number of companies, managerial accountants are most likely found in cross-functional teams with personnel having a background in:

A)commercial art.
B)real estate.
C)marketing.
D)finance.
E)communications.

Question 53

Which of the following typically does not relate to the role of a controller?

A)A controller supervises the accounting department.
B)A controller safeguards an organization's assets.
C)A controller oversees the preparation of reports required by governmental authorities.
D)A controller normally assumes a narrow role within the organization, often preventing the
E)A controller safeguards an organization's assets and a controller normally assumes a

Question 54

Which of the following would likely be considered an internal user of accounting information rather than an external user?

A)Stockholders.
B)Consumer groups.
C)Lenders.
D)Middle-level managers.
E)Government agencies.

Question 55

The process of encouraging and authorizing workers to take appropriate initiatives to improve the overall firm is commonly known as:

A)planning and control.
B)employee empowerment.
C)personnel aggressiveness.
D)decision making.
E)problem recognition and solution.

Question 56

Which of the following statements represents a similarity between financial and managerial accounting?

A)Both are useful in providing information for external users.
B)Both are governed by GAAP.
C)Both draw upon data from an organization's accounting system.
D)Both rely heavily on published financial statements.
E)Both are solely concerned with historical transactions.

Question 57

Managerial accountants:

A)often work with regulators like the SEC.
B)are responsible for issuing a company's annual financial statements.
C)are found primarily at lower levels of the organizational hierarchy.
D)are found primarily at higher levels of the organizational hierarchy.
E)often work on cross-functional teams and are located throughout an organization.

Question 58

Financial accounting focuses primarily on reporting:

A)to parties outside of an organization.
B)to parties within an organization.
C)to an organization's board of directors.
D)to financial institutions.
E)for financial institutions.

Question 59

Which of the following employees at Clear Flights would not be considered as holding a line position?

A)Pilot.
B)Chief financial officer (CFO).
C)Flight attendant.
D)Ticket agent.
E)Baggage handler.

Question 60

A controller is normally involved with:

A)preparing financial statements.
B)managing investments.
C)raising capital.
D)safeguarding assets.
E)managing the firm's credit policy.

Question 61

Which of the following is not a function of the treasurer?

A)Safeguarding assets.
B)Managing investments.
C)Preparing financial statements.
D)Being responsible for an entity's credit policy.
E)Raising capital.

Question 62

A restaurant's value chain includes:

A)supplier development.
B)upstream contributors.
C)downstream contributors.
D)management of inventory.
E)All of these are included in the value chain.

Question 63

Given the following information, what is the cost of unused capacity? Cost of material supplied is $8,600; Cost of material used is $8,000; Cost of material used per shelf is $8; Cost of material supplied per shelf is $8.60.

A)$600.
B)$6,000.
C)$0.60.
D)$1,000.
E)There is no unused capacity.

Question 64

The value chain of a manufacturer would tend to include activities related to:

A)manufacturing.
B)research and development.
C)product design.
D)marketing.
E)all of the answers are correct.

Question 65

What is the most important factor that has allowed companies to move from recording data to analyze it in order to gain significant insight into the entire value chain of an organization?

A)relaxed data privacy laws.
B)the increase in cell phones.
C)powerful, low-cost technology.
D)cross-functional teams.
E)low-cost nuclear power.

Question 66

Given the following information, what is the total cost of unused capacity? Cost of material supplied is $3,200; Cost of material used is $3,000; Cost of material used per cake is $3; Cost of material supplied per cake is $3.20.

A)$0.20.
B)$200.
C)$2,000.
D)$1,000.
E)There is no unused capacity.

Question 67

Strategic cost management is: I.the process of determining cost drivers. II.the recognition of the importance of cost relationships among the activities in the value chain. III.the process of managing cost relationships to the firm's advantage. IV.cost-causing factors.

A)I.
B)II.
C)III.
D)IV.
E)II.and IV.

Question 68

The capacity concept that allows for normal occurrences such as machine downtime and employee fatigue is known as:

A)practical capacity.
B)theoretical capacity.
C)utilized capacity.
D)management capacity.
E)capacity maximization.

Question 69

The cost of resources supplied but unused is known as:

A)practical capacity costs.
B)the cost of theoretical capacity.
C)the cost of unused capacity.
D)the cost of resources supplied.
E)capacity cost.

Question 70

In order for a company to achieve a sustainable competitive advantage, it must:

A)perform one or more activities in the value chain at the same quality level as its
B)perform all activities in the value chain at the same quality level as its competitors.
C)perform its value chain activities at a higher quality level than one of its competitors.
D)perform at lower quality and higher cost than competitors.

Question 71

Cost management systems tend to focus on an organization's:

A)machines.
B)employees.
C)activities.
D)customers.
E)rules and regulations.

Question 72

The process of managing the various activities in the value chain, along with the associated costs, is commonly known as:

A)activity-based costing.
B)strategic cost management.
C)total quality management.
D)computer-integrated costing.
E)sound management practices (SMP).

Question 73

Data science is often practiced by specialists, who use powerful software tools such as:

A)Tableau and RStudio.
B)Nintendo and Chrome.
C)Unix and Basic.
D)QuickBooks and Microsoft Word.
E)Microsoft Power Point and Quicken.

Question 74

The upper limit on the production of goods and services if everything works perfectly is known as:

A)practical capacity.
B)theoretical capacity.
C)utilized capacity.
D)management capacity.
E)capacity maximization.

Question 75

The vast amount of data generated by an organization along with supplemental data that can provide context for the internal data is known together as:

A)big data.
B)data governance.
C)data analytics.
D)data science.
E)data estimation.

Question 76

Data analytics are particularly important to the managerial accountant in what two areas?

A)budgeting and planning.
B)cost behavior and cost estimation.
C)variance analysis and planning.
D)balanced scorecard perspectives and planning.
E)direct cost and direct labor.

Question 77

In order for a company to achieve a sustainable competitive advantage, it must perform value chain activities: I.at the same quality level as competitors, at the same cost. II.at the same quality level as competitors, but at a lower cost. III.at a higher quality level than competitors, at a higher cost. IV.at a higher quality level than competitors, but at no greater cost.

A)I .
B)II.
C)III.
D)IV.
E)II and IV.

Question 78

Which of the following would not be part of a value chain for a fast food restaurant?

A)Buying produce.
B)Mopping the floor.
C)Refilling the napkin dispensers.
D)Hiring new cooks.
E)All of the choices are a part of the value chain.

Question 79

Which of the preceding activities would likely not be considered part of Forte Clothing Company's value chain?

A)Designing a new product line.
B)Locating and then negotiating terms with a clothing manufacturer.
C)Marketing an existing product line.
D)Distributing goods from regional warehouses to local stores.
E)All of these activities would be an element in the company's value chain.

Question 80

Data science draws on what to transform large volumes of data into information?

A)techniques from mathematics, probability, statistics, and computer science.
B)techniques from military science and management principles.
C)techniques from architecture and materials science.
D)techniques from mergers and acquisitions.
E)techniques from tax regulations and the law.