129 test bank for managerial accounting 4th edition

129 Test Bank for Managerial Accounting 4th Edition
by Braun
Multiple Choice Questions
The primary goal of financial accounting is to provide information
to
1.

A) government regulators.

2.

B) creditors.

3.

C) potential investors.

4.

D) all of the above.

Overseeing the day-to-day operations of a company is an
example of which of the following management functions?
1.

A) Directing

2.

B) Planning

3.

C) Analyzing

4.

D) Controlling

Which of the following persons or groups would be least likely to
receive detailed managerial accounting reports?
1.

A) CEO

2.

B) Plant managers

3.

C) Current shareholders

4.

D) Sales territory managers

________ gathers, summarizes, and reports on the financial
impact of changes to business operations.
1.

A) Managerial accounting

2.

B) Planning


3.

C) Directing

4.

D) Controlling

Which of the following groups are external users of financial
information?
1.

A) Customers of the company

2.

B) Potential investors of the company

3.

C) Vendors of the company

4.

D) All of the above

The primary goal of managerial accounting is to provide
information to
1.

A) internal decision-makers.

2.

B) shareholders.

3.

C) creditors.

4.

D) both shareholders and creditors.

Which one of the following financial reports is required to be
audited by an outside entity?
1.

A) Monthly financial statements

2.

B) Annual financial budgets

3.

C) Annual financial statements

4.

D) All of the above

How often should managerial accounting reports be prepared?
1.

A) Annually

2.

B) Quarterly

3.

C) Monthly

4.

D) As often as necessary


Which of the following statements is false about financial
accounting?
1.

2.

A) Financial accounting helps investors make decisions.
B) Financial accounting provides sufficient information for managers to
effectively plan and control operations.

3.

C) Financial accounting reports help creditors make decisions.

4.

D) Financial accounting provides external reports.

When management analyzes whether to move production to
another country or to keep the production located where it
currently is, which of the following management responsibilities is
being performed?
1.

A) Adjusting

2.

B) Controlling

3.

C) Planning

4.

D) Directing

Managerial accounting would use which of the following types of
information?
1.

A) Forecasts of future earnings

2.

B) Financial information

3.

C) Nonfinancial information

4.

D) All of the above

Budgets are a way for managers to communicate their
1.

A) control.

2.

B) decision-making.

3.

C) hiring practices.

4.

D) plans.


Which of the following are the internal decision makers of a
company?
1.

A) Vendors

2.

B) Managers

3.

C) Shareholders

4.

D) Customers

Which of the following statements is true regarding managerial
accounting information?

1.

A) Managerial accounting information is audited by CPAs.

2.

B) Managerial accounting information emphasizes relevance.

3.

C) Managerial accounting information is prepared annually and quarterly.

4.

D) Managerial accounting information must be prepared in conformity with
Generally Accepted Accounting Principles (GAAP).

The management accountant at Woodhaven Cycle Shoppe
developed a budget to establish the sales goals at the store in
2012. In 2013, the management accountant evaluated the
performance in the organization, reviewed the performance of the
sales staff, and compared the sales results to the actual budget
that the managerial accountant developed in 2012. Which of the
following management accounting responsibilities is the
management accountant using in this example?
1.

A) Planning

2.

B) Directing

3.

C) Controlling

4.

D) Designing

5.

E) Implementing

Which of following statements is true?


1.

A) Managerial accounting focuses on historical transactions.

2.

B) Financial accounting focuses on future data.

3.

C) Management accounting focuses on relevant data.

4.

D) Managerial accounting uses the cash basis for recording transactions.

Creating budgets are part of which primary management
responsibility?
1.

A) Controlling

2.

B) Planning

3.

C) Managerial accounting

4.

D) Directing

Preparing budgets is an example of which of the following
management functions?
1.

A) Planning

2.

B) Directing

3.

C) Analyzing

4.

D) Controlling

Comparing actual results to budgets is an example of which of the
following management functions?
1.

A) Analyzing

2.

B) Planning

3.

C) Controlling

4.

D) Directing

When management reviews product sales reports to set goals
and objectives and then evaluates the results of sales operations

against the plan and performance results, which of management's
three primary responsibilities is fulfilled?


1.

A) Controlling and planning

2.

B) Directing and planning

3.

C) Directing, controlling, and planning

4.

D) Analyzing, directing, and planning

Which of the following is being fulfilled when management
compares the budget to actual results?
1.

A) Directing

2.

B) Planning

3.

C) Adjusting

4.

D) Controlling

When management uses feedback to take corrective action on
the budgets, which of the following management responsibilities
are being fulfilled?
1.

A) Controlling

2.

B) Adjusting

3.

C) Directing

4.

D) Planning

Which of the following is not one of the primary responsibilities of
management?
1.

A) Adhering to GAAP

2.

B) Planning

3.

C) Directing

4.

D) Controlling

Using product cost information to determine sales prices is an
example of


1.

A) directing.

2.

B) directing and controlling.

3.

C) controlling, directing, and planning.

4.

D) controlling and planning.

Planning involves which of the following activities?
1.

A) Evaluating the results of operations

2.

B) Overseeing the company's day-to-day operations

3.

C) Setting goals and objectives for the company

4.

D) None of the above

What do managers weigh to develop and run their accounting
systems?
1.

A) Generally Accepted Accounting Principles (GAAP)

2.

B) SEC Regulations

3.

C) Cost-Benefit

4.

D) International Financial Reporting Standards (IFRS)

Evaluating results against the plan is an example of which of the
following management functions?
1.

A) Planning

2.

B) Controlling

3.

C) Analyzing

4.

D) Directing

________ is designed to meet the needs of internal decision
makers.

1.

A) Tax accounting

2.

B) Managerial accounting


3.

C) Financial accounting

4.

D) Audit accounting

Which of the following statements is true about managerial
accounting?
1.

A) Managerial accounting reports aid potential investors.

2.

B) Managerial accounting reports must follow GAAP.

3.

C) Managerial accounting reports are audited by CPAs.

4.

D) Managerial accounting reports provide detailed internal information.

Which of the following individual is the only individual to use
financial accounting information?
1.

A) Vice president of plant operations

2.

B) Product manager

3.

C) Plant manager

4.

D) Bank credit officer

Which statement is true?
1.

A) Management uses financial information to analyze costs.

2.

B) Management uses financial information to plan internal operations.

3.

C) Management uses reports created for internal parties.

4.

D) All of the above are true.

Which one of the following items is not one of the three primary
manager responsibilities?
1.

A) Controlling

2.

B) Planning

3.

C) Directing

4.

D) Adjusting


The focus of management accounting is on

1.

A) tax preparation.

2.

B) external reporting.

3.

C) internal reporting.

4.

D) auditing.

129 Free Test Bank for Managerial Accounting 4th
Edition by Braun Multiple Choice Questions - Page 2
________ are a company's decision makers.
1.

A) Shareholders

2.

B) Managers

3.

C) Customers

4.

D) Creditors

Which of the following is not one of the IMA's overarching ethical
principles?
1.

A) Fairness

2.

B) Responsibility

3.

C) Honesty

4.

D) Creativity

________ are owners of a company.
1.

A) Customers

2.

B) Shareholders

3.

C) Creditors

4.

D) Managers

Internal parties receive information about past performance from


1.

A) audit reports.

2.

B) budget reports.

3.

C) planning reports.

4.

D) managerial accounting reports.

The person who is directly responsible for the company's

operations, such as research and development (R&D), production
and distribution is the
1.

A) CFO.

2.

B) Treasurer.

3.

C) CEO.

4.

D) COO.

Which of the following positions report to the audit committee of
the Board of Directors?
1.

A) The CFO and Internal Audit Department

2.

B) The Internal Audit Department and the independent CPAs

3.

C) The CFO and the independent CPAs

4.

D) The treasurer and controller

Which of the following tasks do management accountants
perform?
1.

A) Help design information systems

2.

B) Provide decision support

3.

C) Ensure financial records are correct

4.

D) All of the above

The COO is responsible for managing which of the following
aspect(s) of the company?


1.

A) The annual audit

2.

B) Internal controls

3.

C) Research and development (R&D), production, and distribution

4.

D) Financial accounting, managerial accounting, and tax accounting

Which of the following positions is primarily responsible for raising
capital and investing funds?
1.

A) The treasurer

2.

B) The COO

3.

C) The CFO

4.

D) The CEO

A company's budget information is most likely to be used by
which of the following groups?
1.

A) Suppliers

2.

B) Creditors

3.

C) Customers

4.

D) Managers

The individuals at Page Manufacturing perform the following
duties: Employee C Roles and Responsibilities Employee D
Roles and Responsibilities; Manages organization on a daily
basis Responsible for the operations at the company. Hires other
executives to run the organization. Identify Employee C and
Employee D.
1.

A) CEO: COO

2.

B) Treasurer; Controller

3.

C) Internal Audit Function; Audit Committee

4.

D) Cross-Functional Team; Treasurer


5.

E) Audit Committee; CEO

The standards in the IMA Statement of Ethical Professional
Practice includes
1.

A) Competence, Confidentiality, Integrity, and Credibility.

2.

B) Competence, Objectivity, Credibility, and Honesty.

3.

C) Competence, Confidence, Integrity, and Credibility.

4.

D) Competence, Confidentiality, Integrity, and Objectivity.

A CFO would have all of the following responsibilities except
1.

A) investing in new production equipment.

2.

B) managing corporate financing.

3.

C) preparing all corporate tax returns.

4.

D) providing reports to creditors as required.

Which person or group is not an employee of the corporation?
1.

A) A member of the audit committee

2.

B) The treasurer

3.

C) The VP of manufacturing

4.

D) The CFO

According to the textbook, a managerial accountant often works
on a (an)
1.

A) cross-functional team.

2.

B) workgroup.

3.

C) audit team.

4.

D) multi-functional team.

The ________ is a subcommittee of the Board of Directors.

1.

A) managerial committee

2.

B) stockholder committee

3.

C) audit committee

4.

D) financial committee

Which of the following roles require publicly-traded companies to
have an internal audit function?
1.

A) The New York Stock Exchange (NYSE)

2.

B) The Internal Revenue Service (IRS)

3.

C) The stockholders

4.

D) The Board of Directors

Which of the following role is directly responsible for all financial
functions in an organization?
1.

A) Treasurer

2.

B) CEO

3.

C) CFO

4.

D) COO

In 2013, the employee at Lighthouse Services prepared an
annual report for the bank that revealed total revenue in 2012 was
$6,000,000. The manager needs the information to apply for a
loan to purchase new equipment to maintain the operations at the
organization. The report was prepared in accordance with GAAP
and the report contained information about the 2012 financial
performance at the company. Which of the following describes
the role of the employee at Lighthouse Services?

1.

A) Managerial Accountant

2.

B) CFO

3.

C) CEO


4.

D) Board of Director

5.

E) Financial Accountant

Which of the following roles in an organization is responsible for
the oversight of the vice president of operations?
1.

A) COO

2.

B) Board of Directors

3.

C) CFO

4.

D) CEO

An external party receives information about past performance
from
1.

A) planning reports.

2.

B) budget reports.

3.

C) financial statements.

4.

D) internal managerial accounting reports.

Which of the following positions is responsible for the oversight,
strategy formulation, and guidance at a large corporation?
1.

A) CEO

2.

B) Company president

3.

C) Stockholders

4.

D) Board of Directors

Managerial accountants may be responsible for
1.

A) providing decision support.

2.

B) communicating results.

3.

C) analyzing data.

4.

D) All of the above.


Which person is hired directly by the board of directors to manage
the daily operations of the company?
1.

A) The CFO

2.

B) The Treasurer

3.

C) The COO

4.

D) The CEO

What position is typically responsible for general financial
accounting, managerial accounting, and tax reporting?
1.

A) Controller

2.

B) Treasurer

3.

C) CFO

4.

D) Audit committee

What factor has changed the roles of managerial accountants?
1.

A) Stricter GAAP standards

2.

B) Technology

3.

C) Stricter audit standards

4.

D) None of the above

Despite the proliferation of technology, managerial accountants
are still needed to provide professional judgment in which of the
following areas?
1.

A) Recording non-routine transactions

2.

B) Adjusting the financial records

3.

C) Designing information systems

4.

D) All of the about activities require professional judgment


Managerial accountants are required to possess which of the
following skills?
1.

A) Analytical skills

2.

B) Oral and written communication skills

3.

C) The ability to work on a team

4.

D) All of the above

A company's audit committee meets
1.

A) quarterly.

2.

B) periodically, as needs dictate.

3.

C) monthly.

4.

D) annually.

Which of the following positions typically manages the daily
operations of a company?
1.

A) The controller

2.

B) The CEO

3.

C) The board of directors

4.

D) The stockholders

The IMA issues which of the following certifications?
1.

A) CMA

2.

B) CIA

3.

C) CFP

4.

D) CPA

To resolve ethical dilemmas, the IMA suggests that management
accountants should first
1.

A) consult an attorney.


2.
3.

4.

B) call the IMA "Ethics Hotline."
C) follow their company's established policies for reporting unethical
behavior.
D) discuss the unethical situation with their immediate supervisor.

129 Free Test Bank for Managerial Accounting 4th
Edition by Braun Multiple Choice Questions - Page 3
Communicating information fairly and objectively is an example of
which ethical standard?
1.

A) Credibility

2.

B) Integrity

3.

C) Competence

4.

D) Confidentiality

Refusing gifts or favors that could be perceived to influence your
actions is an example of which ethical standard?
1.

A) Credibility

2.

B) Integrity

3.

C) Confidentiality

4.

D) Competence

Which of the following is an example of the IMA's integrity
standard?
1.

A) Provide decision support that is accurate, clear, concise and timely.

2.

B) Keep information confidential, except when disclosure is legally required.

3.

C) Communicate information fairly and objectively.

4.

D) Abstain from engaging in or supporting any activity that might discredit
the profession.


The standards of the IMA Statement of Ethical Professional
Practice include which of the following?
1.

A) Objectivity

2.

B) Fairness

3.

C) Honesty

4.

D) Integrity

Which type of system integrates ALL of the company's

departments, worldwide functions, and data?
1.

A) TQM System

2.

B) ERP System

3.

C) ISO System

4.

D) QuickBooks

Which of the following is an example of the IMA's confidentiality
standard?
1.

A) Provide decision support that is accurate, clear, concise and timely.

2.

B) Keep information confidential, except when disclosure is legally required.

3.

C) Communicate information fairly and objectively.

4.

D) Abstain from engaging in or supporting any activity that might discredit
the profession.

A wave of accounting scandals around the turn of the 21st
century prompted which of the following?
1.

A) XBRL

2.

B) IFRS

3.

C) SOX

4.

D) ISO


In recent years, there has been an increasing awareness and
growing interest in ________ and social responsibility by both
consumers and corporations.
1.

A) the bottom line.

2.

B) total quality management.

3.

C) sustainability.

4.

D) just-in-time.

The "triple bottom line" focuses on what three factors that
influence a firm's ability to survive and thrive in the long run?
1.

A) People, places, things

2.

B) Profit, people, planet

3.

C) Profit, people, place

4.

D) Planet, profit, place

Which ethical standard is demonstrated when you attend a class
to maintain your professional knowledge?
1.

A) Credibility

2.

B) Integrity

3.

C) Competence

4.

D) Confidentiality

Inflating your expenses for a company-sponsored conference that
discredits the profession is a violation of what ethical standard?
1.

A) Credibility

2.

B) Integrity

3.

C) Competence

4.

D) Confidentiality


Which of the following is an example of the IMA's competence
standard?
1.

A) Provide decision support information and recommendations that is
accurate, clear, concise and timely.

2.

B) Keep information confidential, except when disclosure is legally required.

3.

C) Communicate information fairly and objectively.

4.

D) Abstain from engaging in or supporting any activity that might discredit
the profession.

To ensure a profit in the current year, the manager ships out preordered merchandise the last week of December, instead of in

mid-January as the customer instructed. This early shipment
could be a violation of which ethical standard?
1.

A) Confidentiality

2.

B) Integrity

3.

C) Competence

4.

D) All of the above

Which of the following is not one of the IMA's credibility
standards?
1.

A) To disclose all relevant information

2.

B) To disclose deficiencies in internal control

3.

C) To communicate information fairly and objectively

4.

D) All of the above are part of IMA's credibility standard.

Accepting a job that you know can be better performed by
someone else with the required skills would violate the ethical
conduct standard of
1.

A) credibility.

2.

B) integrity.


3.

C) competency.

4.

D) confidentiality.

Not disclosing sensitive information is an example of which ethical
standard?
1.

A) Credibility

2.

B) Integrity

3.

C) Competence

4.

D) Confidentiality

It would be a violation of which ethical standard to withhold
relevant information?
1.

A) Confidentiality

2.

B) Competency

3.

C) Integrity

4.

D) Credibility

What is the name of the professional association for managerial
accountants?
1.

A) Institute of Professional Accountants

2.

B) Professional Accountants Association

3.

C) Association of Management Accountants

4.

D) Institute of Management Accountants

Which of the following is not an advantage of an ERP system?
1.

A) Streamlining operations

2.

B) Allowing faster response to changes

3.

C) Eliminating separate software systems across the company

4.

D) Lower initial cost than traditional systems


An accountant who does not understand "accrual accounting"
fails which ethical standard?
1.

A) Credibility

2.

B) Competence

3.

C) Integrity

4.

D) Confidentiality

Which of the following certifications is issued by the IMA?
1.

A) CISA

2.

B) CFP

3.

C) CMA

4.

D) CPA

Under SOX, a CPA firm is permitted to perform which of the
following services for an audit client with pre-approval from the
client's audit committee?
1.

A) Tax

2.

B) Financial information design

3.

C) Bookkeeping

4.

D) Consulting

Karlene is the new managerial accountant at the Bay Beach
House Restaurant. Karlene complies with principles and
standards that help accountants deal with ethical challenges that
she can encounter in the workplace. The principles and standards
ensure that management accountants exhibit the highest level of
ethical behavior. The four ethical standards include competence,
confidentiality, integrity, and credibility. Which of the following
requires management accountants comply with the four ethical
standards?
1.

A) IMA's Statement on Ethical Professional Practice


2.

B) Certified Management Accountant (CMA)

3.

C) Sarbanes-Oxley Act of 2002

4.

D) Certified Public Accountant (CPA)

5.

E) The Federal Reserve Board

What ethical standard would you violate if you take pens home
from work for personal use?
1.

A) Integrity

2.

B) Competence

3.

C) Confidentiality

4.

D) Credibility

What ethical standard is being violated when you tell a friend that
the company you work for is going to report lower than expected
earnings next week?
1.

A) Credibility

2.

B) Integrity

3.

C) Confidentiality

4.

D) Competence

Performing duties in accordance with relevant laws, regulations,
and technical standards comprise the IMA professional ethics
standard of
1.

A) credibility.

2.

B) competence.

3.

C) integrity.

4.

D) confidentiality.

Which of the following is an example of the IMA's credibility
standard?

1.

A) Provide decision support that is accurate, clear, concise and timely.

2.

B) Keep information confidential, except when disclosure is legally required.

3.

C) Communicate information fairly and objectively.

4.

D) Abstain from engaging in or supporting any activity that might discredit
the profession.

The Sarbanes-Oxley Act requires the CPA firm to rotate the audit
partner off of the audit engagement every ________ year(s).
1.

A) three

2.

B) four

3.

C) five

4.

D) one

According to the Sarbanes-Oxley Act, who is responsible for
establishing and maintaining internal controls over financial
reporting?
1.

A) The CEO and CFO

2.

B) The internal auditors

3.

C) The external auditors

4.

D) The SEC

Preparing financial statements in accordance with GAAP is an
example of
1.

A) integrity.

2.

B) competence.

3.

C) credibility.

4.

D) objectivity.

All of the following are overarching principles in the IMA
Statement of Ethical Professional Practice except


1.

A) responsibility.

2.

B) objectivity.

3.

C) integrity.

4.

D) fairness.

Which of the following is responsible for the ability of foreign
companies to compete with domestic companies in the global
marketplace?
1.

A) Globalization

2.

B) The Sarbanes-Oxley Act of 2002

3.

C) Decreased barriers to international trade

4.

D) International financial reporting standards

Failure to mitigate an actual conflict of interest would violate
which ethical standard of conduct?
1.

A) Credibility

2.

B) Integrity

3.

C) Competency

4.

D) Confidentiality

129 Free Test Bank for Managerial Accounting 4th
Edition by Braun Multiple Choice Questions - Page 4
What is a business philosophy that focuses on providing
customers with superior products and services?
1.

A) IFRS

2.

B) TQM

3.

C) ERP

4.

D) XBRL