164 test bank for cornerstones of cost management 2nd edition

164 Test Bank for Cornerstones Of Cost Management
2nd Edition
True False Questions - Free Text Questions - Multiple Choice
Questions
The examination for obtaining the Certificate in Management
Accounting consists of two parts: (1) Financial Planning,
Performance and Control, and (2) Financial Decision
Making.
1.

True

2.

False

Evaluating the performance of a segment of the company is an
example of planning.
1.

True

2.

False

JIT is a critical part of a more comprehensive approach referred
to as Lean Manufacturing.
1.

True

2.

False

The process of choosing among competing alternatives is
called decision making.
1.

True

2.

False

The role of cost and management accountants is one of support
and teamwork and assistance of those who are
responsible for achieving a company’s basic objectives.
1.

True

2.

False

Employee and customer loyalty are NOT a result of strong
codes of ethics.
1.

True


2.

False

The service sector of the U. S. economy has decreased in
importance as traditional industries have declined in
importance.
1.

True

2.

False

Changes in the way business is conducted worldwide have
broadened the focus of cost management accounting
systems.
1.

True

2.

False

Enterprise resource planning (ERP) software has the objective

of providing an integrated system capability and is able to
run all the operations of a company.
1.

True

2.

False

Firms subject to the Sarbanes-Oxley Act of 2002 do not have to
disclose whether they have a code of ethics for senior
financial officers, nor why.
1.

True

2.

False

The Certificate of Public Accounting does not include the right
to serve as external auditors.
1.

True

2.

False

An accounting information system collects, records,
summarizes, analyzes, and manages data to transform
inputs into information that is provided to users.
1.

True

2.

False


One of the major advances in information technology that
affects firms is the emergence of electroniccommerce.
1.

True

2.

False

The focus of Lean Manufacturing is to eliminate waste, which is
anything that does not add value to the end user
(customer).
1.

True

2.

False

The two major subsystems of the accounting information
system are the financial accounting information system
and the cost management accounting information
system.
1.

True

2.

False

Divulging company information when not legally obligated to do
so violates the confidentiality part of the IMA Code of
Conduct.
1.

True

2.

False

Three of the major certifications available to management
accountants are Certificates in Management Accounting,
Public Accounting, and Internal Auditing.

1.

True

2.

False

The Certified Internal Auditor must pass a comprehensive
examination designed to ensure technical competence
and have two years’ work experience.
1.

True

2.

False


The three broad objectives of financial accounting information
systems are to provide information forcosting out
services and products, planning and control, and decision
making.
1.

True

2.

False

For each certification, all an applicant has to do is meet specific
educational and experience requirements.
1.

True

2.

False

The Controller of a company supervises all the accounting
departments and is often viewed as a member of the top
management team.
1.

True

2.

False

Preparing reports for division managers is an activity
associated with the cost management information
system.
1.

True

2.

False

The Treasurer of a company is responsible for all taxation
activities, including dealing with the IRS.
1.

True

2.

False

Positions that have direct responsibility for basic objectives are
referred to as staff positions, and those indirectly
responsible are called line positions.
1.

True

2.

False


Business ethics is learning what is right or wrong in the work
environment and choosing what is right.
1.

True

2.

False

The cost management information system has two major
subsystems: the cost accounting information system and
the operational control information system.
1.

True

2.

False

The cost management information system is primarily
concerned with producing outputs for external users.
1.

True

2.

False

In just-in-time (JIT) manufacturing, each operation produces
only what is necessary for the succeeding operations.
1.

True

2.

False

In resolving an ethical conflict, it would be appropriate to take
the matter to the press where there’s no legal
requirement.
1.

True

2.

False

The Institute of Management accountants has established
ethical standards for management accountants.
1.

True

2.

False


Mutiple Choice Questions- Page 1

In an accounting information system, the inputs are usually
1.

financial statements.

2.

analyzing data.

3.

performance reports.

4.

economic events.

In JIT manufacturing, each operation produces
1.

only what is necessary for the succeeding operations.

2.

all that it can to offset fixed costs.

3.

a fixed percentage in excess of orders to ensure adequate quality stock.

4.

all that it can in order to build inventories.

Continuous improvement is
1.

critical in a dynamic environment.

2.

important to finding and maintaining a competitive advantage.

3.

an effort to find ways to increase overall efficiency, improve quality, and reduce costs.

4.

all of these.

Developing a company strategy for responding to anticipated
new markets is an example of
1.

planning.

2.

control.

3.

performance evaluation.

4.

all of these.

Disclosing company information (when not legally obligated to
do so) would be a violation of which part of the IMA Code
of Conduct?
1.

competence

2.

confidentiality

3.

independence

4.

credibility


Monitoring the number of defects produced is an example of the

management function of
1.

planning.

2.

control.

3.

decision making.

4.

both a and c.

Analyzing cost overruns to determine their cause is an example
of
1.

planning.

2.

control.

3.

decision making.

4.

both a and c.

All of the following would be considered staff functions EXCEPT
the
1.

vice president of finance.

2.

vice president of corporate planning.

3.

vice president of marketing.

4.

vice president of research and development.

Evaluating the performance of a segment of the company is an
example of
1.

planning.

2.

control.

3.

internal auditing.

4.

both a and c.

Altering dates of shipping documents of next January's sales to
record them as sales in the current year would be a
violation of which standard of ethical conduct for
management accountants?
1.

competence

2.

integrity


3.

credibility

4.

all of these

A critical measure of efficiency is
1.

the cost of activity.

2.

a T-test.

3.

customer satisfaction.

4.

employee job satisfaction.

Accounting activities within an organization are usually under
the overall supervision of the
1.

Certified Public Accountant.

2.

controller.

3.

Chartered Accountant.

4.

treasurer.

Extending the close of the fiscal year beyond December 31 so
that some sales of next year are included in the current
year would be a violation of which standard of ethical
conduct for management accountants?
1.

competence

2.

confidentiality

3.

conformance

4.

all of these

In a company, engineers have redesigned production processes
lowering production costs, shortening production cycle
time, reducing waste and improving quality. Which type of

managerial activity applies to this situation?
1.

controlling

2.

continuous improvement

3.

planning

4.

decision making


Currently, the activity found LEAST often within the controller's
department is
1.

updating the general ledger.

2.

budget preparation.

3.

maintaining accounts receivable records.

4.

establishing and maintaining a market for the organization's debt and equity securities.

Improvement in time performance is most likely NOT enhanced
by
1.

redesign of products.

2.

adding processes in production.

3.

eliminating waste.

4.

eliminating non-value-added activities.

Cost management is the branch of accounting concerned with
reporting to
1.

internal managers.

2.

stockholders.

3.

the government.

4.

bankers.

Investigating production variances and adjusting the
production process is an example of
1.

planning.

2.

control.

3.

internal auditing.

4.

both a and c.

Inspecting units produced to determine if they meet
specifications is an example of
1.

planning.

2.

control.

3.

decision making.


4.

both a and c.

Principles of personal ethical behavior include
1.

integrity.

2.

respect for others.

3.

fairness.

4.

all of these.

In an accounting information system, which of the following is
NOT a transformational process?
1.

collecting data

2.

analyzing data

3.

performance reporting

4.

summarizing data

Competitive advantage is established by providing
1.

more customer products than competitors.

2.

better quality than competitors.

3.

greater customer value for less cost than competitors.

4.

greater efficiencies than competitors.

Financial accounting information is used for
1.

investment decisions.

2.

regulatory measures.

3.

stewardship evaluation.

4.

all of the above.

In a performance report, the
1.

differences between actual costs and allowed costs are always undesirable.

2.

expenditures of less than allowed amounts are undesirable.

3.

expenditures of more than allowed amounts are not permitted to occur.

4.

expenditures of less than allowed amounts are desirable.


Comparing actual quality costs with planned quality costs is an
example of
1.

planning.

2.

controlling.

3.

performance evaluation.

4.

both b and c.

A computerized information system that strives to input data
once and make it available to people across the company
for different purposes is called a(n):
1.

cost management information system

2.

enterprise resource planning system

3.

internal accounting system

4.

financial accounting system

In resolving an ethical conflict, it is inappropriate to discuss the
problem with the immediate supervisor because of a
violation of which standard of ethical conduct for
management accountants?
1.

competence

2.

confidentiality

3.

credibility

4.

This action is not in violation of the code of conduct.

Multiple Choice: In resolving an ethical conflict, whi... Question
In resolving an ethical conflict, which of the following
would NEVER be appropriate?
1.

discussing the matter with the chief executive officer

2.

discussing the matter with an external member of the board of directors

3.

taking the matter to the press where there is no legal requirement

4.

resigning from the position because of a conflict


Disclosing all information, unfavorable as well as favorable, that
could influence an intended user’s understanding of
reports, would relate to what section of the IMA Code of
Conduct?
1.

competence

2.

independence

3.

integrity

4.

credibility

Manufacturing environment automation is associated with
increases in
1.

inventory.

2.

productive capacity.

3.

processing time.

4.

none of these.

Engaging in or supporting an activity that would discredit the
profession would relate to which part of the IMA Code of
Conduct?
1.

competence

2.

independence

3.

integrity

4.

credibility

Cost management information systems further competitive
advantage by supporting three fundamentalorganizational
goals. Which of the following is NOT one of these
fundamental organizational goals that further competitive
advantage?
1.

improved time-based performance

2.

improved quality of products and services

3.

maximizing shareholder value

4.

improved efficiency


Cost accounting
1.

is concerned with assigning costs to various cost objects.

2.

attempts to satisfy the costing objectives of both financial accounting and management

accounting.

3.

provides cost information that supports planning, controlling, and decision making.

4.

all of these.

Persons in the United States who provide external auditing
services are designated as
1.

Certified Public Accountants.

2.

Certified Financial Accountants.

3.

Chartered Accountants.

4.

Certified Management Accountants.

JIT is a critical part of a more comprehensive approach referred
to as:

1.

supply chain management

2.

lean manufacturing

3.

just-in-time manufacturing

4.

computer-integrated manufacturing

Managers are considering outsourcing sub-components of
production. Data is collected about the costs of making
the sub-component. Different bids are sought about the
purchase of the sub-components. Which managerial
activity is applicable in this situation?
1.

control

2.

continuous improvement

3.

planning

4.

decision making

An accountant certified to possess the minimal professional
qualifications for an external auditor is a
1.

CPA


2.

CMA

3.

CIA

4.

all of these.

A person in a staff position
1.

is directly involved in production.

2.

provides support for the line function.

3.

is not actually an employee of the company.

4.

all of these.

Any form of commerce that is executed using information and
communications technology is called:
1.

ERP

2.

OLAP

3.

electronic commerce

4.

DSS

Performance reports are accounting reports that compare
1.

planned data with actual data.

2.

audited data with actual data.

3.

managers' bonuses with performance ratings by supervisors.

4.

planned data with industry standards.

Cost management reports are prepared
1.

to meet the needs of decision makers within the firm.

2.

whenever stockholders request them.

3.

according to guidelines prepared by the Securities and Exchange Commission.

4.

according to financial accounting standards.

Factors that have led to a global market for manufacturing and
service firms are
1.

improved transportation and communications systems.

2.

improved telemarketing and communications.

3.

improved telemarketing and transportation systems.


4.

None of these factors have contributed.

95 Free Test Bank for Cornerstones of Cost Management
2nd Edition by Hansen Mutiple Choice QuestionsPage 2
The planning process includes
1.

setting objectives.

2.

identifying means of achieving the objectives.

3.

making decisions.

4.

all of these.

Which of the following cost management tools supports the
firm's concentration on the delivery of value to the
customer?
1.

service industry growth

2.

global competition

3.

preparing an earnings report for the SEC

4.

value-chain analysis

Today's cost managers must assemble cost information and
determine how to value things. Which methods would
NOT be critical to achieving this?
1.

foreign currency translation

2.

costing and quality analysis

3.

differentiating between value-added and non-value-added activities

4.

measuring productivity

Which of the following approaches have led to advancements in
the manufacturing environment?
1.

theory of constraints

2.

computer-integrated manufacturing

3.

JIT manufacturing

4.

all of these


The Standards of Ethical Professional Practice of the Institute of
Management Accountants addresses all of the following
EXCEPT
1.

competence

2.

confidentiality

3.

strategic cost management

4.

integrity

The chief accounting officer of an organization is the

1.

vice president of finance.

2.

internal auditor.

3.

treasurer.

4.

controller.

Which of the following activities is NOT associated with the cost
management information system?
1.

preparing a cost of quality report

2.

preparing a performance report that compares actual costs to budgeted costs

3.

determining the cost of a customer

4.

using future expected earnings to estimate the price of a share of common stock

Setting the selling price of a company's product is an example
of
1.

planning.

2.

control.

3.

decision making.

4.

all of these.

The primary objective of the cost management information
system is to provide
1.

stockholders and potential investors with useful information for decision making.

2.

banks and other creditors with information useful in making credit decisions.

3.

management with information useful for planning and control of operations.


4.

the Internal Revenue Service with information about taxable income.

Total quality management emphasizes
1.

zero defects.

2.

continual improvement.

3.

elimination of waste.

4.

all of these.

The certification sponsored by the Institute of Management
Accountants that emphasizes economics,finance,

management, financial accounting and reporting,
management reporting, and decision analysis is the
1.

CPA

2.

CMA

3.

CIA

4.

all of these.

Which of the following activities is NOT significant to the
advancement of information technology?
1.

enterprise resource planning software

2.

emergence of electronic commerce

3.

theory of constraints

4.

decision support systems

The internal auditor performs a
1.

line function.

2.

staff function.

3.

production function.

4.

marketing function.

Software that has integrated system capability using real time
data is
1.

enterprise resource planning software.

2.

on-line analytic programs.


3.

computer-assisted engineering software.

4.

none of these.

The operational control system is concerned with
1.

investment decisions.

2.

what activities should be performed and assessing how well they are performed.

3.

consumption of productive resources by individual products.

4.

none of these.

The setting of objectives and the identification of methods to

achieve those objectives is called
1.

planning.

2.

controlling.

3.

performance evaluation.

4.

decision making.

Setting the company's profit targets for the upcoming year is an
example of the management function of
1.

planning.

2.

control.

3.

variance analysis.

4.

internal auditing.

The cost management information system is concerned with
1.

reporting financial information according to GAAP.

2.

providing cost information that is used in planning, control, and decision-making.

3.

reporting to external users.

4.

providing financial information to investors.

The manager has to decide what tasks are needed and how they
should be accomplished. This statement describes
1.

the organization chart.

2.

planning.

3.

organizing.


4.

none of these.

Which of the following activities is NOT associated with new
product development?
1.

life-cycle costing

2.

target costing

3.

activity-based management

4.

performance reports

When a management accountant attends training seminars on

new FASB rules, which part of the IMA Code of Conduct is
being observed?
1.

competence

2.

confidentiality

3.

integrity

4.

credibility

The formulation of a program for the accomplishment of a
specific purpose is referred to as
1.

controlling.

2.

motivating.

3.

organizing.

4.

planning.

Which of the following activities is NOT associated with the
financial accounting information system?
1.

reporting on the cost of quality

2.

reporting to the SEC

3.

preparing reports for the IRS

4.

preparing a statement of cash flows

When a management accountant ignores data in favor of
unsupported opinion, this action would speak most
directly to which part of the IMA Code of Conduct?
1.

competence

2.

confidentiality

3.

independence

4.

credibility

Which of the following are results of Lean Manufacturing?
1.

elimination of waste

2.

decreased lead time

3.

costs decrease

4.

all of the above

Which of the following activities is associated with the cost
management information system?
1.

preparing reports for division managers

2.

preparing reports for the IRS

3.

preparing reports for the SEC

4.

preparing financial statements that conform to GAAP

The monitoring of a plan's implementation is called
1.

planning.

2.

controlling.

3.

decision making.

4.

budgeting.

The standards of ethical conduct for management accountants
include
1.

competence and performance.

2.

integrity and respect for others.

3.

confidentiality, confidence, integrity, and observance.

4.

competence, confidentiality, integrity, and credibility.

The IMA has a program to recognize professional competence
and educational attainment in the field of management
accounting. The program leads to designation as a
1.

Certified Management Accountant.

2.

controller.

3.

Chartered Accountant.

4.

treasurer.

The increased importance of costing activities in the value
chain and determining the cost of different suppliers and
customers has led to the emergence of
1.

OLAP.

2.

EDI and supply chain management.

3.

CAM.

4.

theory of constraints.

The acceptance of a savings bond from a supplier would be a
violation of which standard of ethical conduct for
management accountants?
1.

confidentiality

2.

integrity

3.

reliability

4.

none of these

95 Free Test Bank for Cornerstones of Cost Management
2nd Edition by Hansen Mutiple Choice QuestionsPage 3
Which of the following job positions is a staff position?
1.

controller

2.

production vice president

3.

production supervisor

4.

assembly foreman

_______________ is devoted to providing information for
external users.
1.

Management accounting

2.

Financial accounting

3.

Internal accounting


4.

Cost accounting.

Which of the following is a staff position?
1.

vice president of production

2.

vice president of finance

3.

vice president of marketing

4.

plant foreman

Which of the following statements is TRUE?
1.

The service sector comprises approximately three quarters of the United States'
economy and employment.

2.

The service sector comprises approximately 20 percent of the United States' economy
and employment.

3.

Traditional smokestack industries have increased in importance in recent years.

4.

The service sector has decreased in importance in recent years.

Which of the following is NOT an advance in information
technology that affects firms?
1.

computer integrated applications

2.

GAAP reporting

3.

emergence of electronic commerce

4.

availability of tools such as OLAP and DSS

Which of the following is NOT a process associated with an
accounting information system?
1.

auditing existing data

2.

collecting and recording data

3.

providing information to users

4.

analyzing and managing data

Which of the following duties is usually assigned to the
controller?
1.

receiving, maintaining custody of, and disbursing monies and securities

2.

directing the granting of credit to clients


3.

investing the organization's funds

4.

tax planning

Which of the following would be considered a line function?
1.

production

2.

maintenance

3.

public relations

4.

administrative services.

Which of the following job positions is a line function?
1.

financial vice president

2.

controller

3.

production supervisor

4.

treasurer

Which of the following is NOT part of the financial accounting
information system?
1.

filing reports with the SEC

2.

reporting a large contingent liability to current and potential shareholders

3.

determining the future cash flows of a proposed flexible manufacturing system

4.

preparing GAAP financial statements

Which of the following is NOT provided by cost accountants?
1.

cost information in accordance with GAAP

2.

cost information about processes and activities

3.

financial information for external users

4.

cost information about products, customers, and services

Which of the following relates to the credibility section of the
IMA Code of Conduct?
1.

Prepare clear and complete reports.

2.

Communicate professional limitations.

3.

Avoid actual or apparent conflicts of interest.

4.

Communicate information fairly and objectively.


Which of the following statements is NOT true about worldclass firms?

1.

World-class firms are firms that are poor in customer support.

2.

World-class firms know their market and their products.

3.

World-class firms strive continually to improve product design, manufacture, and
delivery.

4.

World-class firms can compete with the best of the best in a global environment.

Which of the following emerging trends in cost accounting
deals with managers striving to create an environment
that will enable workers to manufacture perfect (zerodefect) products?
1.

advances in information technology

2.

time as a competitive element

3.

global competition

4.

total quality management

Which of the following describes the managerial activity of
comparing actual results with budgeted results?
1.

control

2.

continuous improvement

3.

planning

4.

decision making

Which of the following does NOT describe cost management
system?
1.

evaluation of segments or products within the firm

2.

emphasis on the future

3.

externally focused

4.

focus on effective use of resources

Which of the following positions would most likely be a staff
manager?
1.

manager of a Sears store


2.

president

3.

manager of a clothing division

4.

controller

Which of the following costing activities is associated with the
financial accounting system?
1.

determining the cost of a department

2.

determining the cost of goods sold for financial statements

3.

preparing budgets

4.

determining the cost of a customer

Which of the following is a cost management subsystem
designed to assign costs to individual products and
services and other objects, as specified by management
1.

financial accounting information system

2.

operational control system

3.

cost accounting information system

4.

all of the above

Which of the following positions would most likely be a line
manager?
1.

personnel department manager

2.

production supervisor

3.

treasurer

4.

purchasing department manager

Which of the following is the officer responsible for money
management and serves chiefly as the custodian of the
organization's funds?
1.

Certified Public Accountant

2.

controller

3.

Chartered Accountant

4.

treasurer