Free test bank for managerial accounting 3rd edition by braun

Free Test Bank for Managerial Accounting 3rd Edition
by Braun

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

1.

True

2.

False


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

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

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 - Given

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

1.

True - Given

2.

False

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

1.

True

2.

False


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

1.

True

2.

False

Budgets are the quantitative expression of management's plans.

1.

True

2.

False - Given

________ 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

Creating budgets are part of which primary management responsibility?

1.

A) Controlling

2.

B) Planning

3.

C) Managerial accounting

4.

D) Directing


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

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 - Given

4.

D) None of the above

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

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

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

1.

A) Controlling

2.

B) Planning

3.

C) Feedback

4.

D) Adjusting

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

1.

A) directing and planning.

2.

B) directing and controlling.

3.

C) controlling, directing, and planning.

4.

D) controlling and planning.


When management reviews hourly sales reports to determine the level of staffing
needed to service customers, 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

Budgets are a way for managers to communicate their

1.

A) control.

2.

B) decision-making.

3.

C) hiring practices.

4.

D) plans.

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


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

1. A) Planning
2. B) Directing
3. C) Analyzing
4. D) Controlling
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
The SEC requires that reports generated by the managerial accounting
system must be audited by an independent certified public accountant
(CPA).

1. True
2. False


The design of a management accounting system should consider how reports
affect employees' behavior.

1. True
2. False
GAAP must be followed when preparing managerial accounting reports.

1. True
2. False
Management accounting requires independent audits of the firm's books.

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
Internal users such as managers are the primary users of managerial
accounting information.

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

1. True
2. False


Managerial accounting information emphasizes relevance over reliability and
objectivity.

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

1. True
2. False
Managerial accounting reports are always prepared on a quarterly and annual

basis.

1. True
2. False
Managerial information is always based on historical transactions with
external parties.

1. True
2. False
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)


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 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).
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 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


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
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
________ 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
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.


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 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 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 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.
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.
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 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
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
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
________ are a company's decision makers.

1. A) Shareholders
2. B) Managers
3. C) Customers
4. D) Creditors
________ are owners of a company.

1. A) Customers
2. B) Shareholders
3. C) Creditors
4. D) Managers
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.
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.


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

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

1. True
2. False
The treasurer and the controller report directly to the CFO.

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

1. True
2. False
Managerial accountants are now considered to be similar to advisors and
business analysts.

1. True


2. False
Oral and written communications skills are considered among the most
valuable skills a management accountant can possess.

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

1. True
2. False
Management accountants spend more time planning, analyzing and
interpreting accounting data and less time recording routine accounting
transactions than they have in the past.

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

1. True
2. False


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
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 IMA issues which of the following certifications?

1. A) CMA
2. B) CIA
3. C) CFP

4. D) CPA
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 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
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
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
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


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
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
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 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


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.

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
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
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


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
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.
A company's Board of Directors meets

1. A) quarterly.
2. B) periodically, as needs dictate.
3. C) monthly.
4. D) annually.
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.


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

1. A) Treasurer.
2. B) CEO.
3. C) CFO.
4. D) COO.
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.
The IMA suggests that members discuss ethical dilemmas with the company's
board of directors.

1. True
2. False
The IMA is the professional association for managerial accountants.

1. True
2. False
The IMA issues the CMA designation.

1. True
2. False

Your company sends you to a conference to update your skills. It is a violation
of the professional competency and integrity standards if you decide to skip
the afternoon session and go sightseeing.

1. True
2. False
The ethical principles and standards of the IMA always give clear guidance for
every ethical situation.

1. True
2. False
The "Ethics Hotline" provides specific resolutions (answers) to IMA members
who face ethical dilemmas.

1. True
2. False
Just because a behavior is legal does not always mean it is ethical.

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

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.

1. True
2. False
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.
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
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.


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

1. A) integrity.
2. B) competence.
3. C) credibility.
4. D) objectivity.
Communicating information fairly and objectively is an example of which
ethical standard?

1. A) Credibility
2. B) Integrity
3. C) Competence
4. D) Confidentiality