69 test bank for introduction to management accounting 15th edition

69 Test Bank for Introduction to Management Accounting 15th Edition by Horngren Multiple Choice Questions-An.. internal accounting control ________ information helps managers focus on

69 Test Bank for Introduction to Management

Accounting 15th Edition

by Horngren

Multiple Choice

Questions-A(n is a review to determine whether the policies and procedures specified by top management have been

implemented

1 A management audit

2 B internal audit

3 C internal control

4 D internal accounting control

information helps managers focus on operating

problems, imperfections, inefficiencies and opportunities

1 A Scorekeeping

2 B Attention directing

3 C Problem solving

4 D Performance

What statement about management accounting is FALSE?

1 A Management accounting is the process of identifying, measuring,

accumulating, analyzing, preparing, interpreting and communicating

information

2 B Management accounting helps managers fulfill organizational objectives

3 C Management accounting is used by managerial accountants to make strategic and operational decisions

4 D Management accounting produces information for managers in an organization

Research and development is the function of a value chain that involves

1 A the detailed design and engineering of products, services or processes

2 B the generation of ideas related to new products, services or processes

3 C the generation of ideas related to new products or services

4 D the detailed design and engineering of new processes

When does a company earn the majority of revenue for a product that goes through the product life cycle?

1 A phase-out of product and introduction to market stages

2 B introduction to market and mature market stages

3 C product development and mature market stages

4 D mature market and phase-out of product stages

is the field that produces information for managers within an organization

1 A Financial accounting

2 B Management accounting

3 C Financial auditing

4 D External auditing

When comparing management accounting and financial

accounting, which of the following statements is FALSE?

1 A Management accounting has a future orientation whereas financial accounting has a past orientation

2 B Management accounting prepares detailed reports whereas financial accounting prepares summary reports

3 C Management accountants are constrained by the principles of reporting promulgated by the Institute of Management Accountants whereas financial accountants are constrained by Generally Accepted Accounting Principles

4 D Behavioral considerations are of primary importance in management accounting, but not in financial accounting

Variances

1 A are quantitative expressions of plans of action

2 B ignore areas that are problem areas

3 C are deviations from a plan

4 D ignore areas that are presumed to be running smoothly

Which of the following is NOT a government regulation that

influences accounting systems?

1 A Sarbanes-Oxley Act

2 B Foreign Corrupt Practices Act

3 C tax rules promulgated by the Internal Revenue Service

4 D International Financial Reporting Standards

Investigating the reasons for the variances on a department's performance report is an example of

1 A scorekeeping

2 B attention directing

3 C problem solving

4 D auditing

One advantage of the management-by-exception approach is that

it

1 A frees managers from needless concern over operations that adhere to plans

2 B allows managers to ignore aspects of the business outside their area of expertise

3 C allows managers to ignore day-to-day operations

4 D allows managers to ignore problem situations

Which of the following products have a product life cycle of a few months?

1 A fashion clothing

2 B automobiles

3 C airplanes

4 D refrigerators

Marketing is the function of the value chain that involves

1 A the mechanism by which a company delivers products or services to the customer

2 B the manner by which individuals or groups learn about the value and features of products or services

3 C selling activities and delivery activities

4 D selling activities and customer service

is (are the accounting system's effect on the behavior and the decisions of managers

1 A Simplicity

2 B Behavioral implications

3 C The cost-benefit balance

4 D The code of ethics

Which of the following statements is FALSE?

1 A Management accounting allows accountants to plan and control

operations

2 B Management accountants play a role in supporting all the functions of the value chain

3 C Management accounting allows an accountant to learn about

interrelationships between different functional areas

4 D Management accounting helps an accountant understand how

information can improve decisions in different functional areas

The Foreign Corrupt Practices Act requires

1 A companies to accept bribes from officials in foreign countries

2 B all publicly held companies to follow the act only if they conduct business outside the United States

3 C companies to maintain their accounting records in reasonable detail and accuracy

4 D companies to prepare a separate report on their system of internal control

During the product development stage of the product life cycle, companies typically experience

1 A revenues and no costs

2 B costs and no revenues

3 C both costs and revenues

4 D neither costs nor revenues

The function of the value chain that provides support activities to the customer is called

1 A marketing

2 B distribution

3 C customer service

4 D consumer relations

The primary users of management accounting information are

1 A bankers

2 B governmental regulatory bodies

3 C managers in organizations

4 D managerial accountants

is (are the primary consideration in choosing among accounting systems and methods

1 A Simplicity

2 B Behavioral implications

3 C The cost-benefit balance

4 D Simplicity and behavioral implications

Which stage of the product life cycle has a stable sales level?

1 A product development stage

2 B introduction to market stage

3 C mature market stage

4 D phase-out of product stage

The detailed design and engineering of products, services or processes is called the function in the value chain

1 A research and development

2 B design of products, services or processes

3 C engineering of products, services or processes

4 D production

A budget

1 A is a quantitative expression of a plan of action

2 B provides feedback by comparing actual results with planned results

3 C includes deviations from planned results

4 D ignores areas that are presumed to be running smoothly

Performance reports

1 A are quantitative expressions of plans for action

2 B provide feedback by comparing actual results with planned results

3 C ignore areas that are presumed to be running smoothly

4 D provide information to enable managers to select a value chain function

to emphasize

Distribution is the function of the value chain that involves

1 A the mechanism by which a company delivers products or services to the customer

2 B the manner by which individuals or groups learn about the value and features of products or services

3 C the support activities provided to the customer

4 D none of the above

is the field of accounting that develops information for external parties such as stockholders, suppliers, banks and

governmental regulatory bodies

1 A Auditing

2 B Internal auditing

3 C Management accounting

4 D Financial accounting

is the classification, accumulation, and reporting of data that help users understand and evaluate organizational

performance

1 A Scorekeeping

2 B Attention directing

3 C Problem solving

4 D Cost accounting

information involves routine reports that compare actual results to predicted results

1 A Budgets

2 B Attention directing

3 C Scorekeeping

4 D Problem solving

What type of information is used in making nonroutine decisions, such as the decision to replace a traditional assembly line with fully automated robots?

1 A scorekeeping information

2 B attention directing information

3 C problem solving information

4 D auditing information

Generally Accepted Accounting Principles are most closely

connected to

1 A management accounting

2 B financial accounting

3 C internal auditing

4 D management accounting

Which of the following activities would NOT be called

scorekeeping?

1 A estimating the cost of moving the corporate headquarters to another city

2 B preparing a schedule of depreciation expense for trucks for the current year

3 C preparing a schedule of sales for the current year

4 D preparing a schedule of plant assets at the end of the current year

Management-by-exception means that managers should

1 A concentrate on areas that deviate from the plan

2 B in the absence of other evidence, presume that areas that conform with plans are running smoothly

3 C A and B

4 D none of the above

The various stages through which a product passes are called the

1 A value chain

2 B product life cycle

3 C performance plan

4 D product performance plan

Which of the following items should be considered by managers when designing accounting systems?

1 A cost-benefit balances

2 B behavioral implications

3 C cost-benefit balances and behavioral implications

4 D none of the above

Problem solving information would NOT be used in this situation

1 A decision to make or buy parts for a manufactured product

2 B decision to replace equipment

3 C decision to add or drop a division

4 D evaluating the operating performance of a segment in the current year

Product life cycles

1 A do not pertain to services offered to customers

2 B are the same length for all products

3 C are not important when predicting revenues from a product

4 D must be considered to effectively plan and control production of goods or services

69 Free Test Bank for Introduction to Management Accounting 15th Edition by Horngren Multiple Choice Questions-Page 2

Which credential is associated with independent auditors?

1 A CMA

2 B CPA

3 C CFP

4 D IMA

John is a management accountant at DAP Inc John has reason

to believe that his immediate supervisor (the controller., the chief financial officer and the company president are engaged in

accounting fraud that involves overstating assets and

understating liabilities According to the guidelines offered by the IMA, what should John do?

1 A Report the suspected wrongdoings to the local police

2 B Discuss the suspected wrongdoings with his immediate supervisor

3 C Discuss the suspected wrongdoings with the company president

4 D Report the suspected wrongdoings to the audit committee or the board

of directors

According to the IMA's Statement of Ethical Professional Practice, the standard of credibility requires

1 A mitigating actual conflicts of interest

2 B maintaining an appropriate level of professional expertise by continually developing knowledge and skills

3 C communicating information fairly and objectively

4 D performing professional duties in accordance with relevant laws,

regulations and technical standards

This is a statement from the IMA's Statement of Ethical

Professional Practice: "Each member has a responsibility to

communicate information fairly and objectively." This is an

example of the standard

1 A competence

2 B confidentiality

3 C integrity

4 D credibility

You are the management accountant in Company XYZ Your close friend, Ted, is a shareholder in Company XYZ Ted asks you for information about Company XYZ that is typically available only to executive officers in Company XYZ Sharing this

information with Ted violates the IMA's ethical standard of

1 A competence

2 B confidentiality

3 C integrity

4 D objectivity

You are a management accountant in a large company You have observed unethical behavior by your immediate supervisor In accordance with the guidelines offered by the IMA, which of the following courses of action should NOT be taken?

1 A Follow the organization's established policies on the resolution of ethical conflict

2 B Discuss the issue with your immediate supervisor

3 C Consult your own attorney

4 D Initiate a confidential discussion with an IMA Ethics Counselor

Advertising is an example of the function of the value chain

1 A distribution

2 B selling

3 C marketing

4 D promotion

Scott is a management accountant in a large company Scott observed unethical behavior by a coworker who is also a

management accountant The coworker is a relative of the

company's president and he always receives preferential

treatment Scott observed the coworker putting office supplies and small pieces of electronic equipment in his briefcase

According to the IMA, what course of action should Scott take?

1 A He should report the observation to the police The coworker is stealing from the company

2 B He should report the observation to his immediate supervisor

3 C He should report the observation to the Securities and Exchange

Commission

4 D He should do nothing

Which is NOT a service organization?

1 A Rainbow Dry Cleaners

2 B Law Firm of Cannon and Dunfy

3 C Shoreeast Real Estate Company

4 D Irwin Publishing Company

Which statement is FALSE concerning Enterprise Resource

Planning (ERP systems?

1 A Well known ERP system providers are SAP, Microsoft Dynamics and JD Edwards

2 B Accountants are involved with ERP systems

3 C ERP systems only support a few functional areas of a company

4 D ERP systems are having a major effect on accounting systems

An example of a staff department at a clothing manufacturer is the

1 A pressing department

2 B cutting department

3 C sewing department

4 D maintenance department

Accountants do NOT support the function of the value chain

1 A research and development

2 B design of products, services or processes

3 C customer service

4 D none of the above

All service organizations are similar in that

1 A there is very little labor

2 B output is difficult to measure

3 C major inputs and outputs can be stored

4 D they are capital intensive

According to the IMA's Statement of Ethical Professional Practice, the standard of credibility includes

1 A continually developing the accountant's knowledge and skills

2 B mitigating actual conflicts of interest

3 C disclosing all relevant information that could reasonably be expected to influence an intended user's understanding of the reports

4 D refrain from engaging in any conduct that would prejudice carrying out duties ethically

Here is a statement from the Statement of Ethical Professional Practice drafted by the Institute of Management Accountants:

"Each member has a responsibility to perform professional duties

in accordance with relevant laws, regulations and technical

standards." This statement comes from the standard

1 A credibility

2 B confidentiality

3 C competence

4 D professional responsibility

Which company has NOT engaged in accounting fraud in the past ten years?