188 test bank for managerial accounting braun 3rd edition

188 Test Bank for Managerial Accounting Braun 3rd
Edition

True False Questions - Free Text Questions -

Mutiple Choice Questions - Page 1
What position is typically responsible for financial accounting,
managerial accounting, and tax reporting?
1.

A) Controller

2.

B) Treasurer

3.

C) CFO

4.

D) Audit committee

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

A) Vendors

2.

B) Managers

3.

C) Shareholders

4.

D) Customers

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

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.

What is one constraint placed on the information provided by a
managerial accounting system?
1.

A) Generally Accepted Accounting Principles (GAAP)

2.

B) SEC Regulations

3.

C) Cost - Benefit

4.

D) International Financial Reporting Standards (IFRS)

Which of the following statements is false?
1.

A) Financial accounting helps investors make decisions.

2.

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.

The focus of management accounting is on
1.

A) tax preparation.

2.

B) external reporting.

3.

C) internal reporting.

4.

D) auditing.

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

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.


What factor has changed the way that we now view managerial
accountants?
1.

A) Stricter GAAP standards

2.

B) Technology

3.

C) Stricter audit standards

4.

D) None of the above

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

How often should managerial accounting reports be prepared?
1.

A) Annually

2.

B) Quarterly

3.

C) Monthly

4.

D) As often as necessary

________ 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

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.


Which of the following statements is true?
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.

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 computer information systems

4.

D) All of the about activities require professional judgment

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 reports is most likely to be 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

________ are a company's decision makers.
1.

A) Shareholders

2.

B) Managers

3.

C) Customers

4.

D) Creditors


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

Which of the following tasks are performed by management
accountants?
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 IMA issues which of the following certifications?
1.

A) CMA

2.

B) CIA

3.

C) CFP

4.

D) CPA

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

Which of the following people is most likely to only use
financial accounting information?
1.

A) Vice president of plant operations

2.

B) Product manager

3.

C) Plant manager

4.

D) Bank loan officer


________ are owners of a company.
1.

A) Customers

2.

B) Shareholders

3.

C) Creditors

4.

D) Managers

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.

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

Oversight and strategy formulation and guidance for a large
corporation are typically provided by which of the
following positions?
1.

A) The CEO

2.

B) The company president

3.

C) The stockholders

4.

D) The Board of Directors

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


The primary goal of financial accounting is to provide
information for
1.

A) governmental regulators.

2.

B) creditors.

3.

C) potential investors.

4.

D) all of the above.

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

A) It is audited by CPAs.

2.

B) It emphasizes relevance.

3.

C) It is prepared annually and quarterly.

4.

D) It must be prepared in conformity with generally accepted accounting principles
(GAAP).

To whom would the vice-president of operations typically
directly report?
1.

A) The COO

2.

B) The Board of Directors

3.

C) The CFO

4.

D) The CEO

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.

External parties receive information about past performance
from
1.

A) planning reports.

2.

B) budget reports.

3.

C) financial accounting reports.


4.

D) managerial accounting reports.

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, production, and distribution

4.

D) Financial accounting, managerial accounting, and tax accounting

The ________ is a subgroup of the Board of Directors.
1.

A) managerial committee

2.

B) stockholders' committee

3.

C) audit committee

4.

D) financial committee

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

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 CPA firm

3.

C) The CFO and the independent CPA firm

4.

D) The treasurer and controller

137 Free Test Bank for Managerial Accounting 3rd Edition
by Braun Mutiple Choice Questions - Page 2
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

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.

The standards in the IMA Statement of Ethical Professional
Practice include
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.

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.

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

A) Credibility

2.

B) Integrity

3.

C) Competence

4.

D) Confidentiality


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

The person who is directly responsible for the company's
operations, such as research and development,
production and distribution is the
1.

A) CFO.

2.

B) Treasurer.

3.

C) CEO.

4.

D) COO.

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.

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

A) Credibility

2.

B) Competence

3.

C) Integrity

4.

D) Confidentiality

Companies listed on the New York Stock Exchange (NYSE) are
required to have an internal audit function by
1.

A) The NYSE.


2.

B) The Internal Revenue Service (IRS).

3.

C) The stockholders.

4.

D) The Board of Directors.

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

A) Credibility

2.

B) Integrity

3.

C) Competence

4.

D) Confidentiality

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

A) integrity.

2.

B) competence.

3.

C) credibility.

4.

D) objectivity.

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

A) consult an attorney.

2.

B) call the IMA "Ethics Hotline".

3.

C) follow their company's established policies for reporting unethical behavior.

4.

D) discuss the unethical situation with their immediate supervisor.

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 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.

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

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.

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

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

Communicating information fairly and objectively is an example
of which ethical standard?
1.

A) Credibility

2.

B) Integrity

3.

C) Competence

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

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 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.

According to the textbook, managerial accountants often work
on
1.

A) cross-functional teams.


2.

B) workgroups.

3.

C) audit teams.

4.

D) multi-functional teams.

The person who is directly responsible for all financial
functions is the
1.

A) Treasurer.

2.

B) CEO.

3.

C) CFO.

4.

D) COO.

To ensure a profit in the current year a company 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

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

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


A company's Board of Directors meets
1.

A) quarterly.

2.

B) periodically, as needs dictate.

3.

C) monthly.

4.

D) annually.

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

137 Free Test Bank for Managerial Accounting 3rd Edition
by Braun Mutiple Choice Questions - Page 3
IFRS stands for
1.

A) Important Foreign Registering Systems.

2.

B) International and Foreign Registering Standards.

3.

C) International and Foreign Reporting Systems.

4.

D) International Financial Reporting Standards.

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

A) Credibility

2.

B) Integrity

3.

C) Competency

4.

D) Confidentiality

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


Which of the following statements about XBRL is false?
1.

A) XBRL is only required for publicly traded companies.

2.

B) XBRL will decrease the need for manual financial information searches.

3.

C) The US is the first country to mandate use of XBRL.

4.

D) XBRL should decrease the time companies spend converting their financial
information into various government-prescribed formats.

What is a system that requires suppliers to deliver materials at
the exact time the materials are needed?
1.

A) JIT

2.

B) TQM

3.

C) ISO

4.

D) ERP

XBRL stands for
1.

A) eXtensive Business Registering Location.

2.

B) eXtractable Business Reporting Location.

3.

C) eXtensible Business Reporting Language.

4.

D) eXisting Business Responsibility Language.

The Sarbanes-Oxley Act was enacted
1.

A) to prevent accounting scandals like Enron.

2.

B) to restore trust in publicly traded companies.

3.

C) to hire better qualified managerial accountants.

4.

D) none of the above

According to SOX, a company's financial statements must be
certified by the company's
1.

A) CEO.

2.

B) CFO.

3.

C) Controller.

4.

D) CFO and CEO.


Movements toward sustainability and corporate responsibility
often
1.

A) result in increased demand for the company's product or service.

2.

B) include monetary support of local schools and charities.

3.

C) include green initiatives.

4.

D) All of the above are correct.

Companies that wish to demonstrate their commitment to
international quality standards may become certified by
what organization?
1.

A) SEC

2.

B) IFRS

3.

C) IMA

4.

D) ISO

The SEC is considering the move to adopt IFRS for which types
of companies?
1.

A) All U.S. companies

2.

B) All U.S. publicly traded companies

3.

C) All U.S. private companies

4.

D) Only foreign companies operating in the U.S.

Which type of system integrates ALL of the company's
departments, functions, and data?
1.

A) TQM System

2.

B) ERP System

3.

C) ISO System

4.

D) QuickBooks

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

In what year will XBRL be required for all publicly traded
companies?
1.

A) 2017

2.

B) 2015

3.

C) 2011

4.

D) 2010

Companies may adopt which of the following in an attempt to
increase their competitive edge?

1.

A) TQM

2.

B) Green initiatives

3.

C) Lean thinking

4.

D) All of the above

ISO 9001:2008 is a(n)
1.

A) effective exchange of information between vendors and customers.

2.

B) system where production occurs only when needed.

3.

C) software system which integrates all departments.

4.

D) certification that a company complies with international quality standards.

A requirement of SOX is that publicly traded companies must
have which of the following assessed annually?
1.

A) Financial reporting system

2.

B) Internal control system

3.

C) Internal control system and financial reporting system

4.

D) There is no annual assessment required under SOX.

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

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

Which of the following is a software system that integrates all of
a company's departments?

1.

A) ERP

2.

B) Total Integrated Software

3.

C) JIT

4.

D) TQM

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

Which of the following was not a result of the Sarbanes-Oxley
Act?
1.

A) The COO assumes financial statement responsibility.

2.

B) There are new requirements for CPA firms.

3.

C) There are stiffer consequences for white-collar crimes.

4.

D) Audit committees must be independent.


The "triple bottom line" focuses on these 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

________ is the business philosophy and a strategy of
manufacturing without waste.
1.

A) ISO 9001

2.

B) Lean thinking

3.

C) TQM

4.

D) Thin manufacturing

The Sarbanes-Oxley Act requires companies to have their
internal audit procedures assessed at least
1.

A) monthly.

2.

B) quarterly.

3.

C) annually.

4.

D) at any time they choose.

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

Increased competition with foreign companies and the rise of
the global marketplace is mainly due to which of the
following?
1.

A) Globalization


2.

B) The Sarbanes-Oxley Act of 2002

3.

C) Decreased barriers to international trade

4.

D) International financial reporting standards

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

XBRL can best be described as a
1.

A) new set of auditing standards.

2.

B) new set of accounting standards.

3.

C) new set of ethical standards.

4.

D) a tagging system for financial statement data.

The ability to meet the needs of the present without
compromising the needs of the future is often referred to
as
1.

A) the bottom line.

2.

B) total quality management.

3.

C) sustainability.

4.

D) just-in-time.

The Sarbanes-Oxley Act allows for a maximum of ________
years of imprisonment for knowingly destroying or
creating documents to obstruct any federal investigation.
1.

A) 20

2.

B) 15

3.

C) 10

4.

D) 5

137 Free Test Bank for Managerial Accounting 3rd Edition
by Braun Mutiple Choice Questions - Page 4


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

Which of the following is not used in a cost-benefit analysis?
1.

A) Future benefits to be received from project

2.

B) Amounts for future costs of project

3.

C) Book value of past investment in equipment

4.

D) Amount needed to invest in project initially

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.

What is the business philosophy of providing superior goods
and services?
1.

A) TQM

2.

B) Supply-chain management

3.

C) ERP

4.

D) JIT

To ensure a profit in the current year a company 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

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

A) Credibility

2.

B) Integrity

3.

C) Competency

4.

D) Confidentiality

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

A) Credibility

2.

B) Competence

3.

C) Integrity

4.

D) Confidentiality

Communicating information fairly and objectively is an example
of which ethical standard?
1.

A) Credibility

2.

B) Integrity

3.

C) Competence

4.

D) Confidentiality

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.

Torque Engine Company is considering opening a plant in
China. It will cost $3,500,000 to set up the plant and
$750,000 to train employees. An additional $100,000 will
be spent to build relationships with the local suppliers.
The company anticipates gross profit of $4,400,000 from
this new plant. Do the benefits outweigh the costs or do
the costs outweigh the benefits, and by how much?
1.

A) Costs outweigh benefits by $150,000.

2.

B) Benefits outweigh costs by $150,000.

3.

C) Costs outweigh benefits by $50,000.

4.

D) Benefits outweigh costs by $50,000.

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

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

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.


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

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

Which of the following would have the least effect on a costbenefit analysis?
1.

A) Steadily rising prices

2.

B) Rapidly declining prices

3.

C) Constant prices

4.

D) None of the above

Inflating your expenses for a company-sponsored conference 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 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.