ACCY 309 Chapter 1
Value chain refers to its value to the employee.
F
Cost accounting ________. A) measures the costs of acquiring or using resources in an organization B) measures the financial and nonfinancial information that helps managers make decisions to fulfill the goals of an organization C) coordinates product design, production, and marketing decisions and evaluate a company's performance D) communicates information to investors, banks, regulators, and other outside parties
A
Financial accounting is concerned primarily with ________. A) external reporting to investors, creditors, and government authorities B) cost planning and cost controls C) product design and marketing strategies D) providing information for strategic and tactical decisions
A
Financial accounting provides a historical perspective, whereas management accounting emphasizes ________. A) the future B) past transactions C) a current perspective D) reports to shareholders
A
Management accountants serve as key business partners in the planning process because they understand the key ________ factors that create ________. A) success ... value B) accounting .... profits C) financial ... value. D) success ..... income
A
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) reports information that has occurred in the past that is verifiable and reliable D) provides information that is generally available only on a quarterly or annual basis
A
R&D, production, and customer service are business functions that are all included as part of ________. A) the value chain B) benchmarking C) customer relationship management D) the supply chain
A
Strategy is formulated ________. A) by identifying the most important customers B) by forecasting the composition of adequate fixed assets C) based on the qualified opinion of external auditors D) by eliminating sunk costs
A
Strategy specifies ________. A) how an organization matches its own capabilities with the opportunities in the marketplace B) standard procedures to ensure quality products C) incremental changes for improved performance D) the demand created for products and services
A
The primary user of management accounting information is a(n) ________. A) the controller B) a shareholder evaluating a stock investment C) bondholder D) external regulator
A
When managers determine whether it is less expensive to buy products from a vendor or make them in house they are performing ________. A) Cost-benefit analysis B) Supply-chain analysis C) Value-chain analysis D) Research and development
A
Which of the following differentiates marketing from customer service? A) Marketing is the process of promoting and selling products or services to customers or prospective customers, whereas customer service is the process of providing after-sales service to customers. B) Marketing is the process of processing orders and shipping products or services to customers, whereas customer service is the process of providing additional information to customers about the product. C) Marketing is the process of detailed planning, engineering, and testing of products and processes, whereas customer service concentrates on existing customers. D) Marketing is the process of processing orders and shipping products or services to customers, whereas customer service is concerned with choosing the right customer for the product.
A
Which of the following groups would be least likely to receive detailed management accounting reports? A) stockholders B) sales managers C) production supervisors D) distribution managers
A
Which of the following is true of planning in decision making? A) It helps an organization to select goals and strategies. B) It improves the quality of products. C) It helps in evaluating performance. D) It helps in the analysis of actual performance.
A
Which of the following statements concerning an organization's strategy is true? A) Strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives. B) Cost accountants formulate strategy in an organization since they have more inputs about costs. C) A good strategy will always overcome poor implementation. D) Businesses usually follow one of two broad strategies: offering a quality product at a high price, or offering a unique product or service priced lower than the competition.
A
Which of the following statements refers to management accounting information? A) There are no regulations governing the reports. B) The reports are generally delayed and historical. C) The audience tends to be stockholders, creditors, and tax authorities. D) It primarily measures manager's compensation on reported financial results.
A
________ aims to improve operations throughout the value chain and to deliver products and services that exceed customer expectations. A) Total Quality Management B) Innovation C) Customer response time D) Cost and efficiency
A
________ describes the flow of goods, services, and information from the purchase of materials to the delivery of products to consumers, regardless of whether those activities occur in the same organization or with other organizations. A) Supply chain B) Production process C) Quality control D) Customer relationship management
A
________ is the generation of, and experimentation with, ideas related to new products, services, or processes. A) Research and development B) Design of products, services, or processes C) Production D) Marketing
A
A budget ________. A) is the qualitative expression of a proposed plan of action by management B) is an aid for coordinating what needs to be done to execute a plan C) helps in identifying problems and uncertainties D) promotes production automation
B
Customer response time involves ________. A) the speed it takes a customer to respond to an advertisement and place an order B) the speed at which an organization responds to customer requests C) the speed it takes to develop a new product D) the speed it takes an organization to develop a Total Quality Management (TQM) program
B
Financial accounting ________. A) focuses on the future and includes activities such as preparing next year's operating budget B) must comply with GAAP (generally accepted accounting principles) C) is the process of measuring, analyzing, and reporting financial and nonfinancial information related to the costs of acquiring or using resources in an organization D) is prepared for the use of department heads and other employees
B
In designing strategy, a company must match its opportunities in the marketplace with ________. A) environmental friendly goals B) its resources and capabilities C) branding opportunities D) the requirements of credit rating agencies
B
Managers use management accounting information to ________. A) help external users such as investors, banks, regulators, and suppliers B) communicate, develop, and implement strategies C) communicate a firm's financial position to investors, banks, regulators, and other outside parties D) ensure that financial statements are consistent with the SEC rules
B
Processing orders and shipping products or providing services to customers is known as ________. A) after-sales services B) distribution C) marketing D) supply chain
B
Rules for measurement and reporting for management accounting ________. A) state that information must only be useful to management. B) do not need to follow GAAP but must meet the cost-benefit test. C) must follow GAAP. D) must follow GAAP, IRS rules or government standards.
B
The ________ function supports the six functions of value-chain analysis. A) controlling B) administration C) planning D) direction
B
Which of the following deals with management accounting? A) identifying the costs of acquiring the resources of the company B) developing budgets C) preparing the income statement D) preparing the statement of cash flows
B
Which of the following is an area that customers want to see improved levels of performance? A) higher sales margin B) quality of the product C) lower marginal costs D) profit margins
B
Which of the following is an example of an intrinsic reward? A) bonuses paid to employees B) recognition of job well done C) promotions based on performance D) salaries paid to employees
B
Which of the following statements about customer value is true? A) Customer value is shown in a corporation's balance sheet. B) Creating value for customers is an important part of planning and implementing strategy. C) Customer value is the only focus that helps managers to formulate strategies. D) Customer value is lost with increase in costs of the product.
B
________ is a strategy that integrates people and technology in all business functions to enhance relationships with customers, partners, and distributors. A) Supply-chain analysis B) Customer relationship management C) Value-chain analysis D) Continuous quality improvement
B
________ is an after-sale support provided to customers. A) Distribution B) Customer service C) Production D) Marketing
B
________ is the detailed planning and engineering and testing of products, services, or processes. A) Plan of implementation B) Design C) Production D) Research and development
B
6) Financial accounting provides the primary source of information for ________. A) decision making in the assembly and finishing department B) improving distribution and customer service C) preparing the income statement for shareholders and other external parties D) planning next year's plans and specifically; the operating budget
C
A budget serves as much as a control tool as a planning tool because ________. A) it aids in the coordination and communication among various business functions B) it helps to evaluate customer needs and feedback C) it is a benchmark against which actual performance can be compared D) it helps to make predictions about the future
C
A data warehouse or infobarn ________. A) is reserved for exclusive use by the CFO B) is primarily used for financial reporting purposes C) stores information used by different managers for multiple purposes D) gathers only nonfinancial information
C
A report showing the actual financial results for a period compared to the budgeted financial results for that same period would most likely be called a ________. A) strategic plan B) management forecast C) performance report D) revised plan
C
Customer relationship management initiatives use technology to coordinate all ________. A) advertising and marketing techniques to attract customers B) research activities C) customer-facing activities D) quality control management activities
C
New-product development time is the time taken to ________. A) test the prototype and start the large scale production of a product B) design and develop the prototype product C) create new products and bring them to market D) improvise existing products and re-launch them to market
C
Place the five steps in the decision-making process in the correct order: A = Obtain information B = Make decisions by choosing among alternatives C = Identify the problem and uncertainties D = Implement the decision, evaluate performance, and learn E = Make predictions about the future A) C D B E A B) E D A B C C) C A E B D D) A E B D C
C
Place the four business functions in the order they appear along the value chain: Customer service Design Marketing Production A) Customer Service, Design, Production, Marketing B) Customer Service, Marketing, Production, Design C) Design, Production, Marketing, Customer Service D) Design, Customer Service, Production, Marketing
C
Production is the ________. A) generation of, and experimentation with, ideas related to new products, services, or processes B) processing orders and shipping products or services to customers C) acquisition, coordination, and assembly of resources to produce a product or deliver a service D) detailed planning and engineering of products, services, or processes
C
Sustainability is a strategy to achieve long term ________. A) cost reductions and efficiency objectives. B) financial and quality goals. C) financial, social, and environmental goals. D) innovation and technology goals.
C
The approaches and activities of managers in short-run and long-run planning and control decisions that increase value for customers and lower costs of products and services are known as ________. A) value chain management B) enterprise resource planning C) cost management D) customer value management
C
Which of the following is an example of an extrinsic reward? A) receiving a high rating on customer service B) appreciation mail from a customer C) promotions based on performance D) verbal appreciation from CEO
C
Which of the following is not a concern for management accountants in formulating a strategy? A) identifying the most important warehouse location for the distribution of goods B) substituting products that exist in the marketplace C) strategizing compliance with GAAP (Generally Accepted Accounting Principles) D) maintaining adequate fixed assets available to implement the strategy
C
Which of the following is true of cost accounting? A) It is a subset of management accounting and therefore its information is used only to meet the needs of managers. B) It is used only by manufacturers. C) It is part of both management and financial accounting systems. D) The distinction between management accounting and cost accounting is clear-cut.
C
Which of the following is true of financial accounting information? A) It is prepared based on cost-benefit analysis. B) It is primarily used by managers to make internal business decisions. C) It focuses on the past-oriented financial performance of a company. D) It only measures the cash transactions of a company.
C
Which of the following would most likely be the user of financial accounting information? A) factory shift supervisor B) distribution manager C) current shareholder D) department manager
C
Management accounting information typically includes ________. A) tabulated results of customer satisfaction surveys B) the cost of producing a product C) the percentage of units produced that are defective D) All of these answers are correct.
D
That part of the value chain that includes ordering and shipping the product to retail outlets is ________. A) Customer service B) Production C) Marketing D) Distribution
D
The value chain is the sequence of business functions in which ________. A) value is deducted from the products or services of an organization B) producing and delivering the product or service is of prime importance C) products and services are evaluated with respect to their value to the supply chain D) usefulness is added to the products or services of an organization
D
Which of the following differentiates cost accounting and financial accounting? A) The primary users of cost accounting are the investors, whereas the primary users of financial accounting are the managers. B) Cost accounting deals with product design, production, and marketing strategies, whereas financial accounting deals mainly with pricing of the products. C) Cost accounting measures only the financial information related to the costs of acquiring fixed assets in an organization, whereas financial accounting measures financial and nonfinancial information of a company's business transactions. D) Cost accounting measures information related to the costs of acquiring or using resources in an organization, whereas financial accounting measures a financial position of a company to investors, banks, and external parties.
D
Which of the following is true of management accounting information? A) It focuses on documenting past business actions of a firm. B) It is prepared based on SEC rules and FASB accounting principles. C) It is prepared for shareholders. D) It helps with the coordination of elements of the value chain.
D
Which of the following statements about a company's supply chain is true? A) A company's supply chain is always internal to a firm. B) A company's supply chain is always external to a firm. C) A company's supply chain is the same thing as a company's value chain. D) Management accountants provide information to enhance a company's supply chain.
D
Which of the tools shown below would be the most effective planning tool? A) performance evaluation report B) fishbone diagram C) control chart D) budget
D
________ is a philosophy in which management improves operations throughout the value chain to deliver products and services that exceed customer expectations. A) Cost-benefit approach B) Customer focus C) Customer relationship management D) Total quality management
D
Companies can decide on an appropriate strategy based strictly on internally available information.
F
Distribution refers to promoting and selling products or services to customers or prospective customers.
F
Financial accounting information focuses on internal reporting.
F
Financial accounting is broader in scope than management accounting in that financial accounting can include external reporting and reporting that helps managers plan and control operations.
F
For optimal planning success it is best if each business function within the value chain is performed one at a time in sequence.
F
Management accountants should have little or no role in deciding on a company's strategy.
F
Management accounting ensures communication of an organization's financial position to investors, banks, and regulators.
F
Management accounting has to strictly follow the rules of generally accepted accounting principles for the purposes of measurement and reporting.
F
Management accounting information helps managers calculate a target cost for a product by subtracting from the target price the net income per unit of product that the company wants to earn.
F
Strategic cost management describes cost management that specifically focuses on strategic issues.
F
The balance sheet and income statement are primarily management accounting reports.
F
The best-designed strategies are valuable, whether or not they are effectively implemented.
F
The increasing pace of technological information has resulted in longer product life cycles.
F
The key to a company's success is always to be the low cost producer in a particular industry.
F
The supply chain always occurs within a single organization.
F
The supply chain refers to the sequence of business functions in which customer usefulness is added to products or services.
F
A company's strategy specifies how an organization matches its capabilities with the opportunities in the marketplace.
T
An effective way to cut costs is to eliminate activities that do NOT improve the product attributes that customers value.
T
Competitive information serves as a benchmark that managers use to continuously improve their operations.
T
Cost accounting is the process of measuring, analyzing, and reporting financial and nonfinancial Information related to the costs of acquiring or using resources in an organization.
T
Cost accounting measures and reports short-term, long-term, financial, and non financial information.
T
Cost accounting provides information for both management accounting and financial accounting professionals.
T
Cost management not only helps reduce costs but also improve customer satisfaction and the quality of a firm's products.
T
Customer relationship management initiatives use technology to coordinate all customer-facing activities (such as marketing, sales calls, distribution, and after-sales support) and the design and production activities necessary to get products to customers.
T
Financial accounting provides an organization's past-oriented information such as the previous years' financial statements.
T
For best results, cost management emphasizes independently coordinating supply chain activities within your company and with other companies that act as suppliers and customers.
T
For management accounting, internal measurement and reporting are based on cost-benefit analysis.
T
Identifying a company's most important customers helps to formulate a strategy.
T
Increased global competition is placing pressure on companies to reduce costs.
T
Management accountants might provide information on decisions on whether to buy a product from outside or manufacture it in-house.
T
Management accountants work closely with managers in various departments to formulate strategies by providing information about the sources of competitive advantage.
T
Management accounting information and reports do not have to follow set principles or rules such as GAAP but should be useful to its audience and meet the cost/benefit test.
T
Management accounting report time spans can vary from one hour to many years, while financial accounting report time periods usually span a quarter or a year.
T
Managers rely on management accounting information to evaluate alternative investment and R&D decisions.
T
Managers track the costs incurred in each value-chain category is to reduce costs and to improve efficiency.
T
Technological innovation has led to shorter product-life cycles and increased the need to bring new products to market more rapidly.
T
The best-designed strategies and the best-developed capabilities are useless unless they are effectively executed.
T
The design of products, services, and processes component of the supply chain refers to the detailed planning, engineering, and testing of products and processes.
T
The key to a company's success is creating value for customers while differentiating itself from its competitors.
T
The parts of the value chain associated with producing and delivering a product or service-production and distribution - are referred to as the supply chain.
T
The supply chain describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers.
T
The two broad strategies that companies follow are cost leadership strategy and product differentiation strategy.
T