91 test bank for managerial accounting tools for business decision making 3rd

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91 Test Bank for Managerial Accounting Tools for Business Decision Making 3rd

Edition by Weygandt

Multiple Choice Questions - Page 1

A company must inform readers of its annual report of:

1 a All changes in financial accounting policies

2 b Results of any overseas activities

3 c All changes in internal accounting information

4 b Changes to management’s bonus system

How often should management receive or prepare reports on its internal process activities?

1 a On a fixed time basis

1 a the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management.

2 b the Sarbanes-Oxley Act of 2002

3 c relevance to decisions

4 d generally accepted accounting principles

Which of the following represents two management functions?

1 a Regulating and directing

2 b Controlling and directing

3 c Controlling and auditing

4 d Auditing and planning

The organization chart of a company shows:

1 a the interrelationships of activities within a company

2 b the delegation of authority within a company

3 c the delegation of responsibility within a company

4 d all of the above

Managerial accounting information

1 a pertains to the entity as a whole and is highly aggregated

2 b must be prepared according to generally accepted accounting principles

3 c pertains to subunits of the entity and may be very detailed

4 d is prepared only once a year

Which of the following is not an internal user?

1 a Directing, manufacturing, and controlling

2 b Planning, directing, and controlling

3 c Planning, directing, and selling

4 d Planning, manufacturing and controlling

Managerial accounting is also called

1 a inside reporting

2 b cost accounting

3 c management accounting

4 d strategic management

Which of the following statements about internal reports is true?

1 a Most internal reports are summarized rather than detailed

2 b Internal reports focus on general purpose needs of users

3 c The content of internal reports extends beyond the double-entry

accounting system

4 d Internal reports are often very general

Which description identifies financial statements that are prepared for external users?

1 a Keeping track of quality improvements

2 b Showing the company’s percent of market share

3 c Showing statistics on plant safety

4 d All areas would benefit from providing internal management information

Which one of the following tasks would not be performed by a management accountant?

1 a Being concerned with the impact of cost and volume on profits

2 b Strategic cost management

3 c Assisting in budget planning

4 d Preparing reports primarily for external users

Which of the following is not part of managerial accounting?

1 a Determining whether planned goals are being met

2 b Reporting financial information to the shareholders

3 c Calculating product costs

2 b Have the Board of Directors agree to the information provided

3 c Establish clearly understood standards of performance

4 d All of the above are valid reasons

Which one of the following does the planning function involve?

1 a Analyzing financial statements

2 b Setting goals and objectives for an entity

3 c Hiring the right people for a particular job

4 d Coordinating the accounting information system

Managerial accounting information is generally prepared for

1 a is concerned with costing products

2 b is governed by generally accepted accounting principles

3 c pertains to the entity as a whole and is highly aggregated

4 d places emphasis on special-purpose information

Which term describes managerial accounting reports?

1 a GAAP reports

Which one of the following describes internal reports?

1 a They are often audited by CAs

2 b They must be prepared according to GAAP

3 c They are aggregated

4 d They are detailed

What activities and responsibilities are not associated with management’s functions?

1 a It includes performance evaluation by management

2 b It is concerned mainly with operating a manufacturing segment

3 c It is performed only by the controller of a company

4 d It includes hiring and training employees

Which of the following uses managerial accounting?

1 a Manufacturing and service entities, but not merchandising

2 b Profit-oriented businesses only

3 c Service, manufacturing, and merchandising entities

4 d Only manufacturing entities

How often should management receive or prepare reports on its external business process activities?

1 a As they correspond to external financial reporting

2 b Never more than monthly

3 c According to the company’s business cycle

4 d As often as is necessary

Which of the following reports would management find useful in decision making?

1 a Monthly reports on activities to the Board of Directors

2 b Quarterly reporting to the Toronto Stock Exchange

3 c Specific purpose statements on services delivered

4 d Audited financial information in the annual report to shareholders

Which function is achieved when a manager is determining

whether planned goals are being met?

Some companies implement systems to reduce defects in

finished products with the goal of achieving zero defects What are these systems called?

1 a Activity-based costing systems

2 b Enterprise resource planning systems

3 c Value chain systems

4 d Total quality management systems

Which statement is correct?

1 a All three of Canada’s professional accounting designations require completion of a university degree in accounting

2 b All three of Canada’s professional accounting designations require completion of some post-secondary education

3 c The educational requirements of the three professional accounting designations focus on broadly-based accounting and financial management concepts

4 d Each of the three professional accounting bodies publishes its own magazine to promote the interests of its membership

Which of the following is true?

1 a Dissatisfied employees cite a decline in ethical behaviour is a result of a change in corporate culture

2 b Unethical corporate behaviour occurs only in the United States because

of its capitalistic environment

3 c Unethical behaviour rarely causes a decline in investor confidence

4 d Unethical actions are reasonable in an environment wherein

unreasonable budgets and targets have been set

Which of the following statements is true?

1 a In recent decades, the Canadian economy in general has shifted towards

an emphasis on providing services rather than goods This trend has

reduced the importance of managerial accounting

2 b In recent decades, the Canadian economy in general has shifted towards

an emphasis on providing goods rather than services This trend has

reduced the importance of managerial accounting

3 c In recent decades, the Canadian economy in general has shifted towards

an emphasis on providing services rather than goods This trend has NOT reduced the importance of managerial accounting

4 d In recent decades, the Canadian economy in general has shifted towards

an emphasis on providing goods rather than services This trend has NOT reduced the importance of managerial accounting

In Canada, which of the following professional accounting

organizations play an important role in promoting high standards

of ethics in the accounting profession?

1 a The Society of Management Accountants of Canada

2 b The Canadian Institute of Chartered Accountants

3 c The Certified General Accountants Association of Canada

4 d All of the above

For what purpose is the theory of constraints used?

1 a To reduce product defects

2 b To balance performance measurement

3 c To identify and manage constraints that bottle-neck operations

4 d To reduce inventory levels

A company acting ethically must adapt its internal reports to any changes required:

1 a Instantly

2 b As it is appropriate for its business cycle

3 c As stipulated by the CICA

4 d If they are considered pertinent to its business activities

What term describes all activities associated with providing a product or service?

1 a The manufacturing chain

2 b The product chain

3 c The supply chain

4 d The value chain

What is “balanced” in the balanced scorecard approach?

1 a The number of products produced

2 b The emphasis on financial and non-financial performance measurements

3 c The amount of costs allocated to products

4 d The number of defects found on each product

Which is the best definition of fraud?

1 a Unknowingly misrepresenting the facts

2 b Using business supplies for personal use

3 c The intentional misstatement of facts

4 d Misappropriating funds for personal financial gain

In Canada the three different professional accounting

designations are

1 a CPA, CA, CMA

2 b CMA, CGA, CPA

3 c CA, CMA, CGA

4 d MA, CPA, CA

Choose the incorrect answer

1 a While generally not encouraged, lapses in ethical behaviour are

irrelevant to a company’s operating income

2 b Proper incentives need to be implemented to foster an ethical business environment

3 c Manufacturing companies need to establish effective and realistic

production goals for their processes

4 d As a result of the Sarbanes-Oxley Act, companies now pay more

attention to the composition of the board of directors

A company acting ethically must adapt its external reports to any changes required:

1 a Instantly

2 b As it is appropriate for its business cycle

3 c As stipulated by the CICA

4 d If they are considered pertinent to its business activities

How do most companies manage their value chain?

1 a By using activity-based costing

2 b By creating enterprise resource planning systems

3 c Using an action plan

4 d Using total quality management systems

How have many companies significantly lowered inventory levels and costs?

1 a They use activity-based costing

2 b They utilize an enterprise resource planning system.

3 c They have a just-in-time method

4 d They focus on a total quality management system

Which of the following is true?

1 a Managerial accountants are the employees who are principally

responsible for ethical behaviour

2 b Investment losses have been precipitated by lax ethical standards

3 c Corporate fraud was found to have decreased between the years 1998 and 2003

4 d Expense account abuse has been cited as one of the rarest forms of unethical employee behaviour

Many companies now manufacture products that are untouched

by human hands What do they use to achieve this?

1 a Activity-based costing

2 b Computer-integrated manufacturing

3 c Enterprise resource planning systems

4 d Total quality management systems

Which one of the following managerial accounting approaches attempts to allocate manufacturing overhead in a more

4 d developing a performance ranking system to give certain high performersgood raises.

In order to obtain more accurate product costs, how do many companies allocate overhead?

1 a They use activity-based costing

2 b They use enterprise resource planning systems

3 c They use just-in-time methods

4 d They use total quality management systems

Which of the following is not required to become a CMA?

1 a Completion of a university degree

2 b Candidates must pass an entrance exam into the CMA program

3 c Completion of a two-year strategic leadership program concurrently with gaining industry experience

4 d Completion of a national exit exam

Which one of the following is not a main component of the value chain sequence?

1 a It reduces inventory levels

2 b It permits companies to be more streamlined in production

3 c It replaces research and development in a company

4 d It requires an increased emphasis on product quality

Choose the correct statement

1 a CGA stands for Certified Generic Accountant

2 b CMA stands for Certified Managing Accountant

3 c CA stands for Chartered Accountant

4 d CPA stands for Certified Professional Accountant.

Though their areas of specialization overlap, which of the three bodies of professionally designated accountants would be best to engage for implementation of an activity-based costing inventory system?

1 a Chartered Accountant

2 b Certified General Accountant

3 c Certified Public Accountant

4 d Certified Management Accountant

The production manager at ABC Inc is responsible for

formulating the budget for his department He will be evaluated on his ability to control costs After considerable thought, he arrives

at his best estimate of costs, and then adds a further 10% to the projections Chances are he has inflated the cost projections because

1 a that is the way it has always been done

2 b conservative accounting practise requires that he not under report

expenses

3 c by overestimating expenses, it will make it easier for him to come in under budget and receive a favourable evaluation

4 d none of the above

One of the advantages of a just in time inventory system is that it reduces inventory quantities Why is this considered to be a

benefit?

1 a Carrying inventory incurs storage costs, hence reducing inventory

quantities reduces costs

2 b Carrying large inventory raises the risk that customers will want an item that you do not have

3 c Carrying large inventory reduces the risk that customers will want an itemthat you do not have

4 d None of the above

The Ontario Securities Commission introduced regulations

governing the composition and duties of audit committees, as well

as their members’ behaviour The new rules:

1 a are as robust as parallel rules required by the U.S Sarbanes-Oxley Act

2 b were adopted by all provincial and territorial securities regulators, except for British Columbia’s

3 c were introduced in conjunction with the Canadian Securities

Administrators

4 d all of the above

91 Free Test Bank for Managerial Accounting Tools for Business Decision Making 3rd Canadian Edition by Weygandt Multiple Choice Questions - Page 3

Budgetary slack refers to?

1 a) Non motivated employees

2 b) Revising a business plan

3 c) Implementing an attainable budget

4 d) Underestimating a divisions performance

Which of the following methods do companies use to influence employees to achieve organizational goals?

1 a) Incentive schemes and performance measurement

2 b) Policies and Procedures

3 c) Controlling

4 d) All of the above

Which component of a company’s value chain would benefit most from internal management information?

1 a Complaints from its customers over services offered

2 b Bonuses paid to managers of the company

3 c The company’s efforts to develop new services

4 d All such components would benefit from internal management

information

The Institute of Management Accountants (IMA) Code of Ethics includes standards covering

1 a) competence, confidentiality, integrity and credibility

2 b) confidentiality and integrity

3 c) independence, confidentiality, integrity and credibility

4 d) competence

A bank uses financial accounting data to determine

1 a) whether to buy or sell shares of company stock

2 b) whether to lend money to a firm and at what terms

3 c) what dividends to pay out

4 d) the amount of taxes due

What is value chain management best defined as?

1 a A large chain that keeps the machines from falling on the production floor

2 b Management decisions that affect how quickly the production run occurs

3 c The incremental value of costs associated with hiring a new production floor leader

4 d All activities associated with providing a product or service

Which of the following is a characteristic of financial accounting?

1 a) Periodicity of reporting is often generated on an as-needed basis

2 b) Focus is on estimates on future performance

3 c) Reports are general purpose and intended for external users

4 d) Information relevance is valued most

Managerial accounting has become more important in service industries due to:

1 a The decline of the manufacturing sector has freed up many accountants

2 b Service delivery is extremely complex and requires proper monitoring

3 c The economy has become more service-oriented recently

4 d The increase in complexity in computer systems requires accounting specialists

Step two in the lean thinking model: