Test bank cost and management accounting 4e by barfield ch01

In comparing financial and management accounting, which of the following more accurately describes management accounting information?. Management and financial accounting are used for w

ACCOUNTING IN A GLOBAL BUSINESS ENVIRONMENT

MULTIPLE CHOICE

1 In comparing financial and management accounting, which of the following more

accurately describes management accounting information?

a historical, precise, useful

b required, estimated, internal

c budgeted, informative, adaptable

d comparable, verifiable, monetary

2 Management and financial accounting are used for which of the following purposes?

Management accounting Financial accounting

3 One major difference between financial and management accounting is that

a financial accounting reports are prepared primarily for users external to the

company

b management accounting is not under the jurisdiction of the Securities and

Exchange Commission

c government regulations do not apply to management accounting

d all of the above are true

1–1

4 Which of the following statements about management or financial accounting is false?

a Financial accounting must follow GAAP

b Management accounting is not subject to regulatory reporting standards

c Both management and financial accounting are subject to mandatory

recordkeeping requirements

d Management accounting should be flexible

5 Management accounting

a is more concerned with the future than is financial accounting

b is less concerned with segments of a company than is financial accounting

c is more constrained by rules and regulations than is financial accounting

d all of the above are true

7 To meet decision-making needs, the process of gathering and analyzing information

about a company and its competitive environment is known as

a business process reengineering

b process elimination

c business intelligence

d planning

8 In a global economy,

a the trade of goods and services is focused on trade between or among countries

on the same continent

b the international movement of labor is prohibited except for multilingual

persons

c the international flows of capital and information are common

d all of the above happen in a global economy

9 Which of the following U.S legislation relates to bribes being offered to foreign

officials?

a Racketeer Influenced and Corrupt Organizations Act

b Foreign Illegal Activities Act

c Foreign Corrupt Practices Act

d Federal Bribery and Corrupt Practices Act

11 Broadly speaking, cost accounting can be defined as a(n)

a external reporting system that is based on activity-based costs

b system used for providing the government and creditors with information about a

company’s internal operations

c internal reporting system that provides product costing and other information

used by managers in performing their functions

d internal reporting system needed by manufacturers to be in compliance with

Cost Accounting Standards Board pronouncements

12 Cost accounting is directed toward the needs of

13 Cost accounting standards

a are legal standards set by the Institute of Management Accountants for use in all

manufacturing and professional businesses

b are set by the Cost Accounting Standards Board and are legally binding on all

manufacturers, but not service organizations

c do not exist except for those legal pronouncements for companies bidding or

pricing cost-related contracts with the government

d are developed by the Cost Accounting Standards Board, issued by the Institute of

Management Accountants, and are legally binding on CMAs

14 Cost accounting is necessitated by

a the high degree of conversion found in certain businesses

b regulatory requirements for manufacturing companies

c management’s need to be aware of all production activities

d management’s need for information to be used for planning and controlling

16 Financial accounting

a is primarily concerned with internal reporting

b is more concerned with verifiable, historical information than is cost accounting

c focuses on the parts of the organization rather than the whole

d is specifically directed at management decision-making needs

17 Financial accounting and cost accounting are both highly concerned with

a preparing budgets

b determining product cost

c providing managers with information necessary for control purposes

d determining performance standards

c cost of goods sold valuation

d impact of economic conditions on company operations

19 Cost and management accounting

a require an entirely separate group of accounts than financial accounting uses

b focus solely on determining how much it costs to manufacture a product or

20 The Institute of Management Accountants issues

a Statements on Accounting Research for Managers

b Statements on Management Accounting

c Statements on Managerial and Cost Accounting

d Cost Accounting Standards

21 The Institute of Management Accountants’ Code of Ethics

a is a legally enforceable contract with all management accountants

b should be viewed as a goal for professional behavior

c is a legally enforceable contract with all CPAs

d provides ways to measure departures from ethical behavior

22 The organization whose primary function is to provide a means to share information

among cost and management accountants in the United States is the

a Internal Revenue Service

b American Institute of CPAs

c Institute of Management Accountants

d Institute of Certified Management Accountants

23 The ethical standards established for management accountants are in the areas of

a competence, licensing, reporting, and education

b budgeting, cost allocation, product costing, and insider trading

c competence, confidentiality, integrity, and objectivity

d disclosure, communication, decision making, and planning

24 Which of the following statements is true?

a Management accounting is a subset of cost accounting

b Cost accounting is a subset of both management and financial accounting

c Management accounting is a subset of both cost and financial accounting

d Financial accounting is a subset of cost accounting

25 Which of the following statements is false?

a A primary purpose of cost accounting is to determine valuations needed for

external financial statements

b A primary purpose of management accounting is to provide information to

managers for use in planning, controlling, and decision making

c The act of converting production inputs into finished products or services

necessitates cost accounting

d Two primary hallmarks of cost and management accounting are standardization

of procedures and use of generally accepted accounting principles

27 Strategy integrates which of the following?

Planning Controlling Decision making

28 Which of the following is/are not considered by management in determining strategies

for the organization?

29 Which of the following is not a generic mission for organizational segments?

32 Maximizing short-term earnings and cash flow, even at the expense of current market

share, is the primary concern of the

33 The organizational units that require the highest level of strategic planning are those

34 Segment mission is directly related to

a product life cycle

37 An organizational structure in which decision making is spread throughout different

levels of management is known as management

38 Core competencies are not

a internal functions crucial to the success and survival of a company

b attributes that keep a firm from competing

c different for every organization

d considered influences on corporate strategies

39 Which of the following are potential constraints on organizational strategies being

considered by management?

competencies availability capital resources

41 The norms of a company as they impact internal and external, as well as formal and

informal, transactions reflect

a strategic resource management

b the organizational value chain

45 Which of the following defines the details that are necessary to maintain and

accomplish the strategies of an organization?

Responsibility accounting Operational plans Value chain

47 Strategic resource management does not concerns itself with

a the deployment of resources to support strategies

b how resources are to be deployed and redeployed over time

c how resources are used or recovered from changing processes

d how resource disposition will decrease customer and shareholder value

c the value chain

d the product life cycle

49 The world has essentially become smaller because of

a improved technology

b trade agreements

c better communications systems

d all of the above

50 Which of the following was the earliest event of importance to the beginning of

e-commerce?

a Introduction of the Internet

b Introduction of the first consumer charge card

c Introduction of wireless money transfers

d Deregulation of the communications industry

51 Which of the following would most commonly reflect the highest e-commerce cost to a

large, global business?

a Web site development

b Internal network shutdowns from e-mail complaints

c Losses from sales of pirated goods

d Development of appropriate passwords for users

c Legal issues of redress

d Site “friendliness” issues

53 At the start of Web site development, a U.S company would probably be least

concerned with which of the following?

54 NAFTA refers to which of the following?

a North American Foreign Trade Agreement

b New Age Free Trade Amendment

c North American Free Trade Agreement

d North Atlantic Federated Trade Agreement

55 Which of the following statements is true?

a Prior to economic integration, consumer choices were often made on the basis of

production location

b The General Agreement on Tariffs and Trade was established to reduce tariffs

among businesses in Europe and North America

c The majority of trade agreements currently in place emphasize the need for

consumers to purchase quality goods

d International trade agreements, while increasing availability of goods to

consumers, have decreased the need for international laws governing transactions

56 A U.S manufacturer of which of the following goods would be likely to face the most

cultural risks in operating globally?

57 A U.S manufacturer of which of the following goods would be likely to face the fewest

cultural risks in operating globally?

59 Most American laws are

a ethical foundations for living

b codified societal rules that have changed over time

c concerned with regulating public service companies

d designed to restrict foreign business competition

60 The Foreign Corrupt Practices Act is directed at

a U.S businesses operating overseas

b foreign businesses operating in the U.S

c all businesses dealing with U.S consumers

d U.S businesses operating in developed nations

61 The behavioral norms in a company’s code of ethics should

a be specific to the countries in which the company operates

b vary depending on an employee’s job level and global location

c engender consistent actions in all geographical segments

d require employees to act in accordance with local customs and traditions when

in non-domestic situations

62 Texas Instruments has adopted a three-level approach to ethical integrity on a global

level Which of the following is not part of that approach?

a Determination of whether there are local business practices that will impact

interactions with other parts of the world

b Determination of whether some business practices need to be adapted to fit local

laws in a specific locale

c Determination of whether there is compliance with all legal requirements on a

local level

d Determination of whether the “tone at the top” is appropriate in all

organizational segments

63 A company may choose to avoid competition by selecting

strategy intelligence analysis leadership

64 A company establishing a position of cost leadership would

a emphasize the value of its product’s distinguishing features

b stress the cost efficiencies in its production processes

c match all competitors’ price changes

d all of the above are possible tactics

65 A company engaging in a confrontation strategy recognizes that

a such a strategy is less profitable than attempting to avoid competition

b its products and services will always be priced higher than those of its

competitors

c competitors will be exploiting temporary opportunities for advantage and, thus,

the company must retain the advantage of low price

d the need for competitor analysis is much greater than the need for business

intelligence

66 In gathering information about the environment in which the organization operates,

which level of intelligence is most likely to provide an early warning of opportunities and threats?

67 The business intelligence system should provide management with

a organizational strengths and weaknesses

b external markets, technologies, and competitors

c future trends and an environmental scan

d all of the above

68 A business intelligence system provides information for management to use in

Decision-making Strategic planning Tactical planning

69 The first step in the planning process is for managers to analyze the threats and

opportunities of the customers, competition, and environment in relationship to the entity’s

c wealth maximization strategies

d organizational cash flows

c ability to rapidly develop new products

d business intelligence system

72 Which of the following statements is true?

a All segments of an organization will have the same mission

b An organization’s products will not affect the determination of segment mission

c Product life cycle is affected by segment mission

d Segment mission is affected by product life cycle

73 Which of the following types of performance measurements are most appropriate for

each of the following segment misssions?

74 Which of the following is generally viewed as improving organizational cost data?

a strategic resource management

b value chain analysis

76 Strategic resource management issues

a are primarily measurable by financial accounting data

b have few costs and benefits can that be ascertained

c often relate to nonmonetary benefits

d create current monetary costs and nonmonetary benefits

77 The value chain

a reflects the production of goods within an organizational context

b is concerned with upstream suppliers, but not downstream customers

c results when all non-value-added activities are eliminated from a production

1 What four areas are covered by the Standards of Ethical Conduct for Certified

Management Accountants? How are these areas defined?

ANSWER: The four areas covered by the Standards of Ethical Conduct for Certified Management Accountants are: competence, confidentiality, integrity, and objectivity Competence means having the capacity to function in a particular manner

Confidentiality means having the ability to maintain or keep information undisclosed Integrity is defined as adherence to a code of moral values Objectivity is defined as expressing or using facts without distortion by personal feelings or prejudices

MEDIUM

2 On what needs do (1) management accounting and (2) financial accounting focus?

ANSWER: Management accounting focuses on the needs of users inside an

organization Managers need information related to planning, controlling, decision making, and performance evaluation Their needs are satisfied through the providing of information designed for their particular uses Financial accounting focuses on the needs of users outside the organization, such as stockholders, creditors, and regulatory agencies These users require information that is in conformity with generally accepted accounting principles and, thus, is standardized in the form of general purpose financial statements

MEDIUM