192 test bank for managerial accounting 4th edition by braun

192 Test Bank for Managerial Accounting 4th Edition by
Braun
True - False Questions
The Sarbanes-Oxley Act has significantly impacted the responsibility for
financial reporting by publicly traded corporations.
1.

True

2.

False

Lean production cuts the throughput time of a manufacturing concern.
1.

True

2.

False

Just because a behavior is legal does not always mean that the behavior is
ethical.
1.

True

2.

False

The primary purpose of managerial accounting information is to help external
users make investing and lending decisions.
1.

True

2.

False

The CFO is the person responsible for the day-to-day operations of the
company.
1.

True


2.

False

The management philosophy of lean production is used by many U.S.
companies to cut costs, improve quality, and speed production.
1.

True

2.

False

The IMA suggests that, when faced with an ethical dilemma, the first thing
management accountants should do is call the IMA's ethics hotline to report
the unethical behavior.
1.

True

2.

False

A company sends an employee to a conference to update the employee's jobrelated skills. It is a violation of the IMA's Statement of Ethical Professional
Practice standards if the employee decides to skip the afternoon session and
decides to go sightseeing.
1.

True

2.

False

Oral and written communications skills are considered among the skills that
are critical to management accountants.
1.

True

2.

False


Evaluating operations by comparing actual results to budgeted results is a part
of the controlling responsibility of management.
1.

True

2.

False

SOX do not allow CPA firms to provide certain non-audit services to companies
during the same period of time in which they are providing the services.
1.

True

2.

False

The purpose of managerial accounting is to gather, summarize, and report the
cost and revenue data relevant to each decision that is made.
1.

True

2.

False

The IMA's confidential "Ethics Hotline" provides specific resolutions (answers)
to IMA members who face ethical dilemmas.
1.

True

2.

False

Management accountants spend more time planning, analyzing and
interpreting accounting data and less time recording routine mechanical work.
1.

True

2.

False


The Sarbanes-Oxley Act of 2002 (SOX) was designed to hold corporations
accountable for internal control and financial reporting requirements.
1.

True

2.

False

Budgeting is the process of evaluating the results of business operations
against a plan and then making adjustments to that plan.
1.

True

2.

False

Budgets are the quantitative expression of management's plans.
1.

True

2.

False

The IMA issues the CMA designation.
1.

True

2.

False

Technology has been a driving factor in the changing roles of management
accountants.
1.

True

2.

False

The only skill required of managerial accountants is that they have a solid
knowledge of both financial and managerial accounting.
1.

True


2.

False

Managerial accounting information emphasizes relevance over reliability and
objectivity.
1.

True

2.

False

Extensive Business Reporting Language (XBRL) will be required of both public
and private companies.
1.

True

2.

False

The IMA's overarching ethical principles include: Honesty, Fairness,
Objectivity, and Responsibility.
1.

True

2.

False

Managerial accountants are now considered to be similar to internal
consultants and business advisors.
1.

True

2.

False

The IMA is the professional association for management accountants.
1.

True

2.

False


According to SOX, at least one member of the audit committee should be a
financial expert.
1.

True

2.

False

Directing means setting goals and objectives for the company and determining
how to achieve them.
1.

True

2.

False

ISO 9001:2008 is a certification program for companies that adhere to an
international set of quality management standards and guidelines.
1.

True

2.

False

The treasurer and the controller report directly to the CFO.
1.

True

2.

False

The American Institute of Certified Public Accountants was the first
professional membership organization in the United States to earn the ISO 9001
certification.
1.

True

2.

False


The IMA suggests that members discuss ethical dilemmas with the company's
board of directors.
1.

True

2.

False

The primary managerial accounting product is the company's audited financial
statements.
1.

True

2.

False

The internal audit department reports directly to the audit committee, a
subcommittee of the board of directors.
1.

True

2.

False

Company initiatives to address sustainability and corporate responsibility not
only "do the right thing," but also can lead to economic profits by increasing
demand for the company's products and services.
1.

True

2.

False

Managerial accountants no longer perform routine mechanical accounting
tasks in most companies.
1.

True

2.

False


Planning, directing, and controlling are a manager's three primary
responsibilities.

1.

True

2.

False

The ethical principles and standards of the IMA's Statement of Professional
Practice always provide clear guidance for every unethical situation.
1.

True

2.

False

Managerial accounting develops reports that help internal parties effectively
and efficiently run the company.
1.

True

2.

False

IFRS stands for "Important Financial Reporting Standards."
1.

True

2.

False

Managerial accounting reports are always prepared on a quarterly and annual
basis.
1.

True

2.

False

Management accounting requires an independent audit of the firm's books.
1.

True


2.

False

Lean thinking is both a philosophy and a business strategy of manufacturing
without waste.
1.

True

2.

False

Managerial accounting information is always based on historical transactions
with external parties.
1.

True

2.

False

Implementing a program to bill customers electronically, therefore saving
paper, is a green initiative that reduces not only waste, but it also reduces
company costs.
1.

True

2.

False

Management accountants rarely interact with employees from other business
functions such as marketing and customer service.

1.

True

2.

False

Businesses are now viewing sustainability and social responsibility as
opportunities for innovation and business development.
1.

True


2.

False

Managerial accountants must comply with Generally Accepted Accounting
Principles (GAAP) standards when they prepare managerial accounting
reports.
1.

True

2.

False

Managerial accountants only need a solid understanding of managerial
accounting, and not financial accounting.
1.

True

2.

False

Controlling means overseeing the company's day-to-day operations.
1.

True

2.

False

Managers and other internal users are the primary users of managerial
accounting information.
1.

True

2.

False

The design of a management accounting system should consider how reports

affect employees' behavior.
1.

True

2.

False


The SEC requires an independent certified public accountant (CPA) to audit
reports generated by managerial accounting systems.
1.

True

2.

False

Managerial accounting information tends to report on segments of the
business.
1.

True

2.

False

Multiple Choice Questions - Page 1
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

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.

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)

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

A) Directing

2.

B) Planning

3.

C) Adjusting

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

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 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 are the internal decision makers of a company?
1.

A) Vendors

2.

B) Managers

3.

C) Shareholders


4.

D) Customers

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

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.

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 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

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

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

________ 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 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).

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

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

A) Planning

2.

B) Directing

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

Creating budgets are part of which primary management responsibility?

1.

A) Controlling

2.

B) Planning

3.

C) Managerial accounting

4.

D) Directing

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.

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

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

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


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 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 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.

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

Budgets are a way for managers to communicate their
1.

A) control.

2.

B) decision-making.

3.

C) hiring practices.

4.

D) plans.

________ 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 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


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.

129 Free Test Bank for Managerial Accounting 4th Edition
by Braun Multiple Choice Questions - Page 2
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

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


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

________ are owners of a company.
1.

A) Customers

2.

B) Shareholders

3.

C) Creditors

4.

D) Managers

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

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

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 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 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.


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

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.

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

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

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.

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