ACT121-2 Introduction to Management Accounting

Decision Making

It is a function of management that involves determination of predictive information for making important business decisions.

Controlling

It is a function of management that involves evaluation of actual performance whether it conforms to the planned results.

Planning

It is a function of management that involves setting of goals and objectives of the firm, whether short-term or long-term, evaluation and choosing of best alternatives in meeting the goals.

Organizing/Directing

It is a function through which management instructs, guides, and inspires the employees by communicating with them.

Controllership

It is the practice of the established science of control which is the process by which management assures itself that the resources are procured and utilized according to plans in order to achieve the company's objectives.

Management Accounting

It is the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information that assists in fulfilling organizational objectives.

Management

It is the process of planning, organizing and controlling tasks to achieve or meet the goals of organization.

D. Staff

Management accountants generally exercise which type of authority? A. Company B. Functional C. Line D. Staff

C. focuses primarily on the needs of personnel within the organization

Managerial accounting A. focuses only on historical data. B. is governed by GAAP. C. focuses primarily on the needs of personnel within the organization. D. provides information for parties external to the organization. E. focuses on financial statements and other financial reports.

D. Managerial accounting applies to all types of firms

Managerial accounting applies to each of the following types of businesses except A. service firms. B. merchandising firms. C. manufacturing firms. D. Managerial accounting applies to all types of firms.

line authority

Managers with ______ ___________are those people in the organization who are directly responsible for achieving organizational goals.

downward

Managers with line authority exercises _________ authority or the authority to give command.

tackling activities

Organizing/Directing are also known as ______ ___________.

lateral

Persons with staff authority exercise an upward or _______ authority.

Line authority

This is represented by the standard chain of command starting with the board of directors and extending down activities of the organization that are carried out.

D. None from A and B

All of the following are treasurer's function, except? A. Short-term financing B. Insurance decisions C. Both A and B D. None from A and B

A. objectivity

A managerial accountant who communicates information objectively is exercising which of the following standards? A. objectivity B. integrity C. competence D. confidentiality

B. is supportive in nature, providing service and assistance to other parts of the organization.

A staff position A. relates directly to the carrying out of the basic objectives of the organization. B. is supportive in nature, providing service and assistance to other parts of the organization. C. is superior in authority to a line position. D. none of these

D. Credibility

Which ethical standard has been violated if an accountant fails to disclose relevant information pertaining to a financial statement? A. Competence B. Confidentiality C. Integrity D. Credibility

Treasurership

It is concerned with the acquisition, financing and management of assets of a business concern to maximize the wealth of the firm for its owners.

Decision Making

It is inherent in all management functions.

Integrity

The standard that abstains from engaging in or supporting any activity that might discredit the profession.

B. Items 1, 2, 5, 7, and 8 only

Controllership has attained special recognition in corporate management as business expands in complexity and reach, and as the controller exerts influence for management to take organization's goals. Controllership and treasurership constitute corporate finance. These are among the controller's traditional functions: 1. Tax management. 2. Financial reporting and interpretation. 3. Credit management. 4. Sourcing and investing of funds. 5. Reporting to government regulatory agencies. 6. Risk management. 7. Economic appraisal. 8. Planning for control. A. All eight items B. Items 1, 2, 5, 7, and 8 only C. Items 1, 2, 3, 4, 5, 7, and 8 only D. 2, 3, 5, and 7, and 8 only

D. deal with the economic events of an enterprise.

Financial and managerial accounting are similar in that both A. have the same primary users. B. produce general-purpose reports. C. have reports that are prepared quarterly and annually. D. deal with the economic events of an enterprise.

B. general-purpose

Financial statements for external users can be described as: A. user-specific B. general-purpose C. special-purpose D. managerial reports

B. Detailed More aggregated

How does managerial decision making compare with external performance evaluation? Managerial Decision Making External Performance Evaluation A. Detailed Detailed B. Detailed More aggregated C. More aggregated Detailed D. More aggregated More aggregated

D. as needed.

Internal reports must be communicated A. daily. B. monthly. C. annually. D. as needed.

D. Adequate training and experience in both the analytical approach and process in a particular undertaking are requisites for the CPA to be involved in a management advisory service engagement.

Which of the following statements is correct? A. A certified public accountant can readily render management advisory services to the public. B. A CPA with MBA and DBM degrees is automatically qualified to render management advisory services. C. Competence as a standard in the rendition of management advisory services by a CPA may be equated to having excellent scholarly preparation to include the usual baccalaureate degree, an MBA and other post graduate studies. D. Adequate training and experience in both the analytical approach and process in a particular undertaking are requisites for the CPA to be involved in a management advisory service engagement.

Staff authority

______ __________ belongs to those individuals or groups in an organization who provide services and advice to line mangers.

Advisory staffs

________ ______ have been used by decision makers from emperors and kings to dictators and parliaments over the course of recorded history.

C. Store manager for Best Buy

___________________________ is an example of a line position. A. Controller for a merchandising company B. Chief financial officer of a merchandising company C. Store manager for Best Buy D. Human resources manager for a community college

B. II only

I. Line managers are directly responsible for achieving organizational goals. II. Line personnel give assistance to staff employees. Which of the above statement is incorrect? A. I only B. II only C. Both I and II D. Neither I nor II

A. Set goals, set objectives, develop plans, implement plans, evaluate performance

In the planning and control process, what is the proper sequence of events? A. Set goals, set objectives, develop plans, implement plans, evaluate performance B. Establish a master budget, set standard costs, develop variance analysis C. Develop engineered costs, develop pricing targets, calculate contribution margins D. Identify variable costs, identify fixed costs, project the sales mix, determine breakeven

C. Management Accounting

That kind of accounting concerned with providing information to management in making decisions about the operations of the business. A. Responsibility accounting B. Cost accounting C. Management accounting D. Correct answer no given

A. a staff manager.

The controller of a company or other organization is A. a staff manager. B. an operating manager. C. an accountant, not a manager. D. a natural manager.

C. Has no externally imposed standards.

The following characteristics refer to Financial Accounting except A. Provides information to external users. B. Emphasizes on objective data. C. Has no externally imposed standards. D. Generates general purpose financial statements.

Credibility

The standard that communicates information fairly and objectively.

Credibility

The standard that communicates professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity.

Integrity

The standard that contributes to a positive ethical culture and place integrity of the profession above personal interests.

Confidentiality

The standard that informs all relevant parties regarding appropriate use of confidential information. Monitor to ensure compliance.

Confidentiality

The standard that keeps information confidential except when disclosure is authorized or legally required.

Competence

The standard that maintains an appropriate level of professional leadership and expertise by enhancing knowledge and skills.

Integrity

The standard that mitigates actual conflicts of interest. Regularly communicate with business associates to avoid apparent conflicts of interest. Advise all parties of any potential conflicts of interest.

Competence

The standard that performs professional duties in accordance with relevant laws, regulations, and technical standards.

Credibility

The standard that provides all relevant information that could reasonably be expected to influence an intended user's understanding of the reports, analyses, or recommendations.

Competence

The standard that provides decision support information and recommendations that are accurate, clear, concise, and timely. Recognize and help manage risk.

Integrity

The standard that refrains from engaging in any conduct that would prejudice carrying out duties ethically.

Confidentiality

The standard that refrains from using confidential information for unethical or illegal advantage.

Credibility

The standard that reports any delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law.

B. financial reports.

The treasurer function is usually not concerned with A. investor relations. B. financial reports. C. short-term financing. D. credit extension and collection of bad debts.

A. Management accounting, in view of its various integrated recipients should have a separate data recording and retrieval system from financial accounting.

To distinguish between management accounting and financial accounting, the following statements are correct, except A. Management accounting, in view of its various integrated recipients should have a separate data recording and retrieval system from financial accounting. B. Financial accounting is bound by GAAP, and management accounting need not be in conformity with GAAP. C. Financial accounting can be regarded as the process while management accounting can be regarded as the product of the process. D. Management accounting output must be released on time so as not to erode its usefulness; Financial accounting output can still be useful even when delayed.

C. integrity

Under which ethical standard of conduct does the managerial accountant have the responsibility to refuse any gift, favor, or hospitality that would influence or appear to influence his or her decision? A. competence B. confidentiality C. integrity D. objectivity

C. I and IV only

Which of the following information below is related primarily to Management Accounting as compared to Financial Accounting? I. Internal users of information II. Monetary Information III. Focus of information is business as a whole IV. Emphasizes relevance rather than precision A. I only B. II and III only C. I and IV only D. IV only E. I, II and IV only

B. May rely on estimates and forecasts.

Which of the following is most associated with managerial accounting? A. Must follow generally accepted accounting principles B. May rely on estimates and forecasts C. Is prepared for users outside the organization D. Always reports on the entire entity

D. Credit and collection

Which of the following is not usually a controller's function? A. Planning for control B. Protection of assets C. Tax administration D. Credit and collection

C. Controlling

Which of the following management function is related in performance evaluation? A. Planning B. Organizing C. Controlling D. All of the above

D. Only II

Which of the following statements is (are) true regarding financial and managerial accounting? I. Both are mandatory. II. Both rely on the same underlying financial data. III. Both emphasize the segments of an organization, rather than just looking at the organization as a whole. IV. Both are geared to the future, rather than to the past. A. I, II, III, and IV B. Only II, III and IV C. Only II and III D. Only II