117 test bank for introduction to management accounting 15th edition

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117 Test Bank for Introduction to Management

Specialization by individuals in organizations is being replaced

by decision-making by cross-functional teams

Generally Accepted Accounting Principles play an important role in management accounting

Financial accounting reports are usually prepared for a period

of one year or less

In the IMA's Statement of Ethical Professional Practice, integrity

is one of the standards explained

1 True

2 False

XBRL is an integrated information system that supports all

functional areas of a business

According to the Financial Executive, an emphasis on long-term results by top executives in a company creates pressures for unethical behavior

1 True

2 False

Additional costly information should be acquired when the

expected benefit of an improved decision exceeds the cost of the information

The same information may serve the attention-directing

function and the problem-solving function

1 True

2 False

Most scorecard and attention-directing information is produced

on a nonroutine basis

1 True

2 False

The cost-benefit balance is the primary consideration in

choosing among accounting systems and methods

Variances are deviations from planned results

1 True

2 False

Companies that have a fully installed computer-integrated

manufacturing system are usually labor intensive

The maintenance department provides line support to the

welding department in a factory

Staff managers give advice to line managers and have authority over line managers.

1 True

2 False

In English-speaking countries outside the United States,

management accountants are called chartered accountants

True False Questions Free Text Questions

-Multiple Choice Questions-Page 1

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

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

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

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.

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

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

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

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

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

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

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

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

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

The various stages through which a product passes are called the

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

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

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.

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

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

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

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

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

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.

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

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

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

Generally Accepted Accounting Principles are most closely connected to

3 C The cost-benefit balance

4 D Simplicity and behavioral implications

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

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

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

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

69 Free Test Bank for Introduction to Management

Accounting 15th Edition by Horngren Multiple Choice Questions-Page 2

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

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.

A telephone hotline is established for customers to call with questions about a new electronic device This is an example of the function in the

1 A marketing; value chain

2 B distribution; value chain

3 C customer service; value chain

4 D marketing; product life cycle

According to the Financial Executives Institute, a function of the treasurer is

1 A reporting and interpreting

2 B short-term financing

3 C protection of assets

4 D government reporting

You are the management accountant in Company ZZ A supplier

to Company ZZ offers to let stay rent-free at the supplier's

condominium in Florida for your upcoming vacation Accepting the supplier's offer violates the IMA's ethical standard of

1 A American Institute of Certified Public Accountants

2 B American Institute of Certified Management Accountants

3 C Institute of Management Accountants

4 D American Institute of Management Accountants

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, integrity, confidentiality and objectivity

2 B competence, confidentiality, credibility and objectivity

3 C competence, confidentiality, credibility and integrity

4 D competence, integrity, morality and confidentiality

According to the Financial Executive, which of the following situations create pressures for unethical behavior?

1 A emphasis on long-term results

2 B upward trends in the economy

3 C ignoring small lapses in ethical behavior

4 D rising stock prices

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

According to the Financial Executives Institute, a function of the controller is

1 A investments

2 B short-term financing

3 C provision of capital

4 D reporting and interpreting

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.

According to the Statement of Ethical Professional Practice drafted by the IMA, the standard of integrity states that each member has a responsibility to

1 A communicate information fairly and objectively

2 B mitigate actual conflicts of interest

3 C recognize and communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity

4 D disclose delays or deficiencies in information

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

The IMA's ethical standard of confidentiality does NOT require each member to

1 A keep information confidential except when disclosure is authorized or legally

required

2 B inform all relevant parties regarding appropriate use of confidential information

3 C refrain from using confidential information for unethical or illegal advantage

4 D provide confidential decision support information and recommendations that are accurate, clear, concise and timely

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

Dell Inc buys electronic components for laptop computers from Intel using the Internet This is an example of a(n

3 C shift to manufacturing-based economy

4 D expansion of the value chain