Test bank for cornerstones of managerial accounting 5th edition

Test Bank for Cornerstones of Managerial Accounting 5th
Edition

Management accounting information is only used by manufacturing
organizations.

1. True
2. False


The managerial activity of monitoring a plan's implementation and taking
corrective action as needed is referred to as decision making.

1. True
2. False
The process of choosing among competing alternatives is decision
making.

1. True
2. False
Managerial accounting information is not important for not-for-profit
organizations.

1. True
2. False
Managerial Accounting is designed primarily for internal users.

1. True
2. False
Managerial accounting has its emphasis on the future.

1. True
2. False


Financial accounting is governed by GAAP.

1. True
2. False
The value chain is the set of activities required to design, develop, produce,
market, and deliver products and service to customers.

1. True
2. False
Time is not a crucial element in all phases of the value chain.

1. True
2. False
Activity-based costing is a less detailed approach to determining the cost of
goods and services than traditional cost accounting.

1. True
2. False
Excellent customer service is an example of a value-added activity.

1. True
2. False


A cost accountant would normally occupy a staff position within an
organization.

1. True
2. False
Positions that have direct responsibility for the basic objectives of an
organization are referred to as line positions.

1. True
2. False
Virtually all managerial accounting practices were developed to assist
managers in maximizing profits.

1. True
2. False
The belief that each member of a group bears no responsibility for the wellbeing of other members is a common principle underlying all ethical
systems.

1. True
2. False
The four emphasized areas of the CMA examination reflect the needs of
managerial accounting and highlights that managerial accounting has more of
an interdisciplinary flavor than other areas of accounting.

1. True
2. False


The purpose of the Certificate in Public Accounting is to provide minimal
professional qualification for external auditors.

1. True

2. False
Which of the following is not an objective of managerial accounting?

1. a. To prepare external reports for investors, creditors, government agencies,
and other outside users.
2. b. To provide information for costing of services, products, and other objects
of interest to management.
3. c. To provide information for planning, controlling, evaluating and continuous
improvement.
4. d. To provide information for decision making.
Which of the following is an example of the management activity referred to
as planning?

1. a. Developing a strategy for disposing of hazardous waste.
2. b. The decision to eliminate an unprofitable segment of an organization.
3. c. The decision to outsource an organization`s payroll processing.
4. d. All of these are correct
Developing a company strategy for responding to anticipated new markets is
an example of

1. a. planning.
2. b. controlling.


3. c. decision making.
4. d. all of these are correct.
Investigating production variances and adjusting the production process is an
example of

1. a. planning.

2. b. controlling.
3. c. decision making.
4. d. all of these.
The primary objective of managerial accounting is

1. a. to provide stockholders and potential investors with useful information for
decision making.
2. b. to provide banks and other creditors with information useful in making
credit decisions.
3. c. to provide management with information useful for planning and control of
operations.
4. d. to provide the Internal Revenue Service with information about taxable
income.
Managerial accounting

1. a. is primarily for external users.
2. b. has no mandatory rules.
3. c. provides information based on historical information.
4. d. must adhere to GAAP.


Managerial accounting reports are prepared

1. a. according to GAAP guidelines.
2. b. to meet the needs of decision makers within the firm.
3. c. for external users.
4. d. all of these are correct
Financial accounting

1. a. is concerned with the information about the firm as a whole.

2. b. has to adhere to GAAP policies.
3. c. focuses on external users.
4. d. all of these are correct
Which of the following would not be an example of a value-added
activity?

1. a. timely delivery of products
2. b. offering the customer a variety of products
3. c. storage of finished products
4. d. excellent customer service
Total quality management emphasizes

1. a. zero defects.
2. b. continuous improvement.
3. c. elimination of waste.


4. d. all of these are correct.

Activity-based costing
•

a. strives to create an environment that will enable workers to manufacture zerodefect products.

•

b. is the process of choosing among competing alternatives.

•

c. was established in response to financial scandals.

•

d. encourages process-value analysis.

Which of the following would normally occupy a line position?
•

a. staff accountant

•

b. accounting manager

•

c. vice-president of marketing

•

d. treasurer

Which of the following would normally occupy a staff position?
•

a. assembly worker

•

b. cost accounting manager


•

c. factory manager

•

d. all of these

Which of the following would occupy a line position in a hospital?
•

a. manager of the cafeteria

•

b. hospital administrator

•

c. chief of surgery

•

d. none of these

The controller of an organization participates in
•

a. planning.

•

b. controlling.

•

c. decision making.

•

d. all of these are correct

The objective of profit maximization
•

a. should be the only goal of an organization.


•

b. is an objective of financial accounting but not managerial accounting.

•

c. should be achieved through legal and ethical means.

•

d. should outweigh the goal of product quality.

The standards of ethical conduct for managerial accountants include
•

a. competence and performance.

•

b. integrity and respect for others.

•

c. confidentiality, confidence, integrity, and observance.

•

d. competence, confidentiality, integrity, and credibility.

Which of the following areas is not emphasized on the CMA examination?
•

a. external auditing and business law

•

b. economics, finance, and management

•

c. decision analysis and information systems

•

d. financial accounting and reporting

Accountants that have a Certificate in Public Accounting (CPA):


•

a. are the only accountants permitted to serve as external auditors.

•

b. must pass a national examination and be licensed by the state in which they
practice.

•

c. may be held responsible to provide assurance concerning the reliability of a firm`s
financial statements.

•

d. all of these statements are true.

Persons in the United States who provide assurance service are designated as
•

a. Certified Public Accountants.

•

b. Certified Financial Accountants.

•

c. Chartered Accountants.

•

d. Certified Management Accountants.

The detailed formulation of action to achieve a particular end is the management activity
called_____________.

______________________________ is the provision of accounting information for a company’s
internal users.


The process of choosing among competing alternatives is called ________________________.

The managerial activity of monitoring a plan’s implementation and taking corrective action as
needed is referred to as ______________.

The managerial accounting system produces information for __________ users.

____________________ is primarily concerned with producing information for external users.

Managerial accounting strongly emphasizes providing information about _________________.


The _____________________ is the set of activities required to design, develop, produce,
market and deliver products and services as well as provide support services to customers.

__________________________ organizes costs according to the value chain and collects both
financial and nonfinancial information.

__________________________________________ is a management philosophy in which
manufacturers strive to create an environment that will enable workers to manufacture perfect
(zero-defect) products.

_____________________________ is the continual search for ways to increase the overall
efficiency and productivity of activities by reducing waste, increasing quality and managing
costs.


_________ is a crucial element in all phases of the value chain.

The________________supervises all accounting functions and reports directly to the general
manager and chief operating officer (COO).

Positions that are supportive in nature and have only indirect responsibility for an organization’s
basic objectives are called ________________________.

The ____________________ is responsible for the finance function.

In June 2002, Congress passed the____________________________________ in response to
financial scandals such as Enron.

________________________ involves choosing actions that are right, proper, and just.

To promote ethical behavior by managers and employees, organizations commonly establish
a__________________________.

Only a _________________________ is permitted to serve as an external auditor.

A __________________________ has passed a comprehensive examination
designed to ensure technical competence and has two years of experience.


Activity-based costing

1. a. strives to create an environment that will enable workers to manufacture
zero-defect products.
2. b. is the process of choosing among competing alternatives.
3. c. was established in response to financial scandals.
4. d. encourages process-value analysis.
Which of the following would normally occupy a line position?

1. a. staff accountant
2. b. accounting manager
3. c. vice-president of marketing
4. d. treasurer
Which of the following would normally occupy a staff position?

1. a. assembly worker

2. b. cost accounting manager
3. c. factory manager
4. d. all of these
Which of the following would occupy a line position in a hospital?

1. a. manager of the cafeteria
2. b. hospital administrator
3. c. chief of surgery


4. d. none of these
The controller of an organization participates in

1. a. planning.
2. b. controlling.
3. c. decision making.
4. d. all of these are correct
The objective of profit maximization

1. a. should be the only goal of an organization.
2. b. is an objective of financial accounting but not managerial accounting.
3. c. should be achieved through legal and ethical means.
4. d. should outweigh the goal of product quality.
The standards of ethical conduct for managerial accountants include

1. a. competence and performance.
2. b. integrity and respect for others.
3. c. confidentiality, confidence, integrity, and observance.
4. d. competence, confidentiality, integrity, and credibility.
Which of the following areas is not emphasized on the CMA examination?

1. a. external auditing and business law
2. b. economics, finance, and management


3. c. decision analysis and information systems
4. d. financial accounting and reporting
Accountants that have a Certificate in Public Accounting (CPA):

1. a. are the only accountants permitted to serve as external auditors.
2. b. must pass a national examination and be licensed by the state in which
they practice.
3. c. may be held responsible to provide assurance concerning the reliability of a
firm`s financial statements.
4. d. all of these statements are true.
Persons in the United States who provide assurance service are designated
as

1. a. Certified Public Accountants.
2. b. Certified Financial Accountants.
3. c. Chartered Accountants.
4. d. Certified Management Accountants.
Answer Given

planning.
Answer Given

Managerial accounting
Answer Given

decision making
Answer Given

controlling


Answer Given

internal
Answer Given

Financial accounting
Answer Given

future events
Answer Given

value chain
Answer Given

Lean accounting
Answer Given

Total quality management
Answer Given

Continuous improvement
Answer Given

Time

Answer Given

controller
Answer Given

staff positions
Answer Given

treasurer
Answer Given


Sarbanes-Oxley Act (SOX) SOX
Answer Given

Ethical behavior
Answer Given

code of conduct
Answer Given

Certified Public Accountant (CPA) CPA
Answer Given

Certified Internal Auditor (CIA) CIA