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MA Chapter 1 Which of the following statements is true? a. Management accounting information focuses on external reporting. b. The statement of financial position, income statement and statement of cash flows are used for financial accounting but not for management accounting. c. Financial accountin...

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MA Chapter 1 1. Which of the following statements is true? a. Management accounting information focuses on external reporting. b. The statement of financial position, income statement and statement of cash flows are used for financial accounting but not for management accounting. c. Financial accounting is broader in scope than management accounting. d. Modern cost accounting plays a significant role in management decision making. 2. Which of the following statements is false? a. Cost accounting measures and reports short-term, long-term financial, and nonfinancial information. b. Cost management provides information that helps increase value for customers. c. All strategies should be evaluated regarding the resources and capabilities of the company. d. A good cost accounting system is narrowly focused on continuous reduction of costs. 3. Which of the following statements is correct? a. The best-designed strategies are valuable whether or not they are effectively implemented. b. To take advantage of changing market opportunities, the annual budget should be strictly enforced. c. Linking rewards to performance is a major deterrent to good management performance. d. An important strategic decision is making the correct investments in productive assets. 4. All of the following statements are true except a. A budget is a tool used to plan and express strategy.

c. A budget may be used as a planning tool, but not as a control tool. d. Management accountants often are simultaneously doing problem-solving, scorekeeping, and attentiondirecting activities. 6. Management accounting a. focuses on estimating future revenues, costs, and other measures to forecast activities and their results. b. provides information about the company as a whole. c. provides information that has occurred in the past and that is verifiable and reliable. d. provides information that is generally available only on a quarterly or annual basis. 7. Financial accounting a. focuses on the future and includes activities such as preparing next year’s operating budget. b. must comply with PFRS ( Philippine Financial Reporting Standards). c. reports include detailed information on the various operating segments of the business such as product lines or departments. d. is prepared for the use of department heads and other employees. 8. The person MOST likely to use management accounting information is a(n) a. banker evaluating a credit application. b. shareholder evaluating a stock investment. c. governmental taxing authority. d. assembly department supervisor. 9. Which of the following descriptions refers to management accounting information?

b. Financial accounting reports financial and nonfinancial information that helps managers implement company strategies.

a. It is verifiable and reliable.

c. Feedback links planning and control.

c. It is prepared for shareholders.

d. Control includes deciding what feedback to provide that will help with future decision making.

d. It provides reasonable and timely estimates.

5. All of the following statements are false except

10. Which of the following groups would be LEAST likely to receive detailed management accounting reports?

a. Attention-directing activities should focus on costreduction opportunities, and not on value-adding opportunities.

b. It is driven by rules.

a. Stockholders b. Sales representatives

b. For strategic decisions, scorekeeping is the most prominent role played by management accounting.

c. Production supervisors

16. Strategy specifies

d. Managers

a. how an organization matches its own capabilities with the opportunities in the marketplace

11. Management accounting information includes b. standard procedures to ensure quality products a. tabulated results of customer satisfaction surveys c. incremental changes for improved performance b.the cost of producing a product d. the demand created for products and services c. the percentage of units produced that are defective

17. Control includes

d. all of the above

a. implementing planning decisions

12. Which of the following types of information are used in management accounting?

b. evaluating performance

a. Financial information

c. providing feedback to help with future decision making d. all of the above

b. Nonfinancial information

18. Linking rewards to performance

c. Information focused on long term

a. helps to motivate managers

d. All of the above

b. allows companies to charge premium prices

13. Management accounting includes

c. should only be based on financial information d. does all of the above

a. implementing strategies

19. Control measures should

b. developing budgets

a. be set and not changed until the nest budget cycle.

c. preparing special studies and forecasts

b. be flexible to allow for employees who are slackers.

d. all of the above 14. Financial accounting is concerned PRIMARILY with

c. be kept confidential from employees so that competitors do have an opportunity to gain a competitive advantage d. be linked by feedback to planning

a. external reporting to investors, creditors, and government authorities

20. For control decisions, emphasis is placed on the _________ role(s) of management accounting.

b. cost planning and cost controls

a. problem-solving

c. profitability and analysis

b. score-keeping

d. providing information for strategic and tactical decisions

c. attention-directing d. both (b) and (c)

15. Financial accounting provides a historical perspective, whereas management accouting emphasizes

21. ________ means reporting and interpreting information that helps managers to focus on operating problems, imperfections, inefficiencies, and opportunities.

a. the future

a. Scorekeeping

b. past transactions

b. Attention directing

c. a current perspective

c. Problem solving d. None of the above.

d. reports to shareholders

22. Management accounting is considered successful when it a. helps creditors evaluate the company’s performance. b. helps managers improve their decisions c. is accurate d. is relevant and reported annually. 23. The Institute of Management Accountants (IMA) a. is a professional organization of management accountants

b. Whether to report unfavorable department information that may result in unfavorable consequences for a friend. c. Whether to file a tax return this year. d. Both (a) and (b). 29. If a financial manager/management accountant has a problem in identifying unethical behavior or resolving an ethical concept, the first action (s)he should normally take is to a. Consult the board of directors.

b. is a professional organization of financial accountants

b. Discuss the problem with his/her immediate superior.

c. issues standards for management accounting

c. Notify the appropriate law enforcement.

d. issues standards financial accounting

d. Resign from the company.

24. Line management includes

30. Katrina is a financial manager who has discovered that her company is violating environmental regulations. If her immediate superior is involved, her appropriate action is to

a. manufacturing managers b. human-resource managers c. information-technology managers d. management-accounting managers 25. Staff management includes a. Manufacturing managers. b. Human-resource managers. c. Purchasing managers. d. Distribution managers. 26. Responsibility of a CFO include all EXCEPT a. Providing financial reports to shareholders. b. Managing short-term and long-term financing. c. Investing in new equipment.

a. Do nothing since she has a duty of loyalty to the organization. b. Consult the audit committee. c. Present the matter to the next higher managerial level. d. Confront her immediate superior. 31. If financial manager/management accountant discovers unethical conduct in his/her organization and fails to act, (s)he will be in violation of which ethical standard(s)? a. “Actively or passively subvert the attainment of the organization’s legitimate and ethical objectives.” b. “Communicate unfavorable as well as favorable information.”

d. Preparing tax returns. 27. The Standards of Ethical Conduct for management accountants include concepts related to a. Competence, performance, integrity, and reporting. b. Competence, confidentiality, integrity, and objectivity. c. Experience, integrity, reporting, and objectivity.

c. “Condone the commission of such acts by others within their organizations.” d. All of the answers are correct. 32. Corporate social responsibility is a. Effectively enforced through the controls envisioned by classical economics. b. The obligation to shareholders to earn a profit.

d. None of the above as ethical issues do not affect management accountants.

c. The duty to embrace service to the public interest.

28. Ethical challenges for management accountants include

d. The obligation to serve long-term, organizational interests.

a. Whether to accept gifts from suppliers, knowing it is an effort to indirectly influence decisions.

33. A common argument against corporate involvement in socially responsible behavior is that...