Deck 1: Business Planning and Analysis: An Integrative Framework for Management Accounting

Question 1

Management accounting takes an external perspective in evaluating a firm's performance.

Answer 1

False

Question 2

Management accounting practice is affected by the products or services offered by an organization to its customers.

Answer 2

True

Question 3

Traditional management accounting emphasizes the entire management process, while business planning and analysis (BPA) tends to focus more on cost and profitability analysis.

Answer 3

False

Question 4

Costs occur throughout the organization wherever resources are consumed.

Question 5

The management process consists of plan, deliver, check, and analyze.

Question 6

The process domain includes all decisions and activities relating to an organization's products or services.

Question 7

The customer/market domain includes decisions and activities that affect a specific segment of the firm's customers or markets.

Question 8

Process managers oversee the work of operational managers and coordinate their efforts with top management.

Question 9

An accounting manager would be an example of a functional manager.

Question 10

Top management is responsible for assigning responsibilities for achieving organizational objectives.

Question 11

The competence standard of the IMA Statement of Ethical Professional Practice includes being able to recognize and help manage risk.

Question 12

The confidentiality standard of the IMA Statement of Ethical Professional Practice includes refraining from any conduct that could prejudice carrying out duties ethically.

Question 13

The integrity standard of the IMA Statement of Ethical Professional Practice includes contributing to a positive ethical culture.

Question 14

Providing only the positive news the boss wants to hear is a violation of the credibility standard of the IMA Statement of Ethical Professional Practice.

Question 15

Employee A observes that Employee B is improperly altering department records to meet month-end goals. These records are for internal use only and do not impact the company's financial records. Employee A notifies her supervisor of the impropriety, and the supervisor advises Employee A that she instructed Employee B to alter the records and that an adjustment would be made the subsequent month to correct the records. Employee A should:

A) Advise the supervisor that her behavior was unethical and do not communicate the impropriety any further.
B) Follow the organization's established procedures on the resolution of such conflict.
C) Do nothing since the supervisor authorized the behavior.
D) Communicate the unethical behavior to external authorities.

Question 16

Payments to government officials to avoid importation rules in countries where such payments are common is a violation of the U.S. Foreign Corrupt Practices Act. Knowing this is an example of which standard in the IMA Statement of Ethical Professional Practice?

A) Competence.
B) Confidentiality.
C) Credibility.
D) Integrity.

Question 17

Based on the IMA Statement of Ethical Professional Practice, all of the following are ways that management accountants can try to resolve ethical issues except:

A) Call IMA's anonymous ethics helpline.
B) Discuss it with their immediate supervisor.
C) Anonymously report it to the local media.
D) Consult their attorney.

Question 18

Which standard of the IMA Statement of Ethical Professional Practice states that financial management professionals should not engage in activities that might discredit the profession?

A) Integrity.
B) Confidentiality.
C) Competence.
D) Credibility.

Question 19

Fan Club Inc. recently submitted a budget for the coming year to management. Included in the budget were the plans for a new product: a rechargeable fan. The new fan will not only last longer than the competitor's product but is also quieter. While not yet approved, the budget called for aggressive advertising to support its sales targets, as the business community was not yet aware that Fan Club was close to production of a new fan. A member of the management accounting staff "shared" the budget with a distributor. In accordance with the IMA Statement of Ethical Professional Practice, which of the following would best represent an ethical conflict in this situation?

A) The budget has not been approved and therefore is not for publication.
B) The price has not been established, so expectations must be managed.
C) The staff member exposed the company to a potential lawsuit.
D) The employee should refrain from disclosing confidential information.

Question 20

Identifying and implementing best practices is most often performed by:

A) Process managers.
B) Functional managers.
C) Top management.
D) Operational managers.

Question 21

Establishing strategic objectives is most often performed by:

A) Process managers.
B) Functional managers.
C) Top management.
D) Operational managers.

Question 22

Assigning specific individuals to specific activities is most often performed by:

A) Process managers.
B) Functional managers.
C) Top management.
D) Operational managers.

Question 23

Developing financial statements is most often performed by:

A) Process managers.
B) Functional managers.
C) Top management.
D) Operational managers.

Question 24

Pricing decisions are part of which decision domain?

A) Process.
B) Customer/market.
C) Product.
D) Supply chain.
E) Entity.

Question 25

Setting up distribution channels for products is part of which decision domain?

A) Supply chain.
B) Product.
C) Process.
D) Entity.
E) Customer/market.

Question 26

Developing a product marketing plan is part of which decision domain?

A) Customer/market.
B) Entity.
C) Process.
D) Product.
E) Supply chain.

Question 27

Which of the following is part of the entity domain?

A) Reporting to company stakeholders.
B) Creating a strategy for a specific customer segment.
C) Implementing continuous improvement activities.
D) Directing the work of many functions.
E) Determining which features to offer on different models of products.

Question 28

Which of the following is part of the process domain?

A) Reporting to company stakeholders.
B) Creating a strategy for a specific customer segment.
C) Implementing continuous improvement activities.
D) Negotiating contracts with raw material suppliers.
E) Determining which features to offer on different models of products.

Question 29

Which of the following is part of the customer/market domain?

A) Reporting to company stakeholders.
B) Creating a strategy for a specific customer segment.
C) Implementing continuous improvement activities.
D) Negotiating contracts with raw material suppliers.
E) Determining which features to offer on different models of products.

Question 30

Which of the following sequences match the four stages of the PDCA management process?

A) Negotiate supplier agreements, accept materials from supplier, evaluate supplier performance, find a new supplier.
B) Evaluate supplier performance, negotiate supplier agreements, accept materials from supplier, find a new supplier.
C) Accept materials from supplier, evaluate supplier performance, find a new supplier, negotiate supplier agreements.
D) Find a new supplier, negotiate supplier agreements, accept materials from supplier, evaluate supplier performance.

Question 31

Which of the following sequences match the four stages of the PDCA management process?

A) Complete financial statements, complete analysis of performance shortfalls, change financial objectives, set financial reporting goals.
B) Complete analysis of performance shortfalls, complete financial statements, change financial objectives, set financial reporting goals.
C) Set financial reporting goals, complete analysis of performance shortfalls, complete financial statements, change financial objectives.
D) Set financial reporting goals, complete financial statements, complete analysis of performance shortfalls, change financial objectives.

Question 32

Developing a marketing strategy for a new cell phone product is an example of which stage in the PDCA management process?

A) Act.
B) Customer/market.
C) Do.
D) Plan.
E) Process.

Question 33

Analyzing performance reports for a new cell phone product is an example of which stage in the PDCA management process?

A) Do.
B) Check.
C) Assess.
D) Analyze.
E) Act.

Question 34

Use the following information to answer questions 20-24:


-What is the annual revenues' absolute size, or magnitude, of change from 2017 to 2018?

A) ($24,024)
B) ($9,450)
C) $9,450
D) $13,650
E) $24,024

Question 35

Use the following information to answer questions 20-24:


-What is the percentage change of the number of iPhone 6 units sold from 2018 to 2019?

A) (60%)
B) 60%
C) 88%
D) (88%)
E) (95%)

Question 36

Use the following information to answer questions 20-24:


-What is the percentage change of the number of iPhone 7 units sold from 2017 to 2018?

A) (133%)
B) (64%)
C) (17%)
D) 17%
E) 133%

Question 37

Use the following information to answer questions 20-24:


-What is the percentage change of the number of iPhone 8 units sold from 2018 to 2019?

A) (105%)
B) 105%
C) 4000%
D) 1900%
E) 771%

Question 38

Use the following information to answer questions 20-24:


-What do the numbers suggest?

A) Decreasing revenues at an increasing rate; increasing growth in number of iPhone 7/8 sales.
B) Increasing revenues at a decreasing rate; decreasing growth in number of iPhone 6/7 sales.
C) Increasing revenues at a decreasing rate; decreasing growth in number of iPhone 7/8 sales.
D) Increasing revenues at a decreasing rate; increasing growth in number of iPhone 7/8 sales.
E) Increasing revenues at an increasing rate; decreasing growth in number of iPhone 6/7 sales.

Question 39

Rebecca Marlor is the managing partner of McGill, Graviet, and Johnson (MGJ), an audit and management advisory consulting firm. MGJ has three types of clients: audit, business consulting, and government consulting. Although the firm has increased its total number of clients the past few years, Rebecca is concerned because revenues and profits have been lagging. Although the audit business is booming as more companies have moved to the area, the consulting business has been slow to catch on. Many of the business consulting clients are manufacturing companies that have been long-term clients. Rebecca has asked John McGill, founding partner who is semi-retired, to look at the following results and make initial suggestions.
Required:

A) Calculate the percentage change for revenues and number of clients over the past three years.
B) What do these percentages suggest? What could be some possible causes?

Question 40

WestJet, an airline company based in Western Europe, is a small regional air carrier, struggling to achieve profitability in a limited niche market. WestJet's executive team is expected to make significant cost cuts and show positive changes in the airline's financial situation. Newly appointed Onboard Services Manager Tom Jones recently joined the company. Part of Tom's job is to check all the monthly invoices received for onboard services, verifying that they correspond to the services provided, approving the invoices, and forwarding them to the accounting department for payment. One of its vendors is Air Catering, a local airline catering company that was the only licensed catering service with all the required certifications for WestJet's base airport. Enjoying a monopoly position there, Air Catering charged high prices yet made sure to negotiate favorable terms in its agreements with airlines, especially WestJet. Going through the invoices, Tom noticed an unusual invoice from Air Catering for "general catering services." Tom was unsure what services these were for or why they were all invoiced on a separate bill. Tom decided to share his concerns with his direct supervisor.
His supervisor said that the invoice referred to a separate verbal agreement between WestJet's and Air Catering's accounting departments. "These are some complicated accounting matters you shouldn't worry about," his boss said. "They know better how to properly invoice everything." She advised Tom to just sign his approval of the invoice and forward it to the accounting department for payment.
Using the IMA Statement of Ethical Professional Practice, analyze the situation Tom is facing. Does Tom have an obligation to do more to address this ethical situation? What other actions could he take to successfully resolve this ethical conflict?

Question 41

Match the term on the right with the definition on the left.