Chapter 1 MC
101. The setting of objectives and the identification of methods to achieve those objectives is called a. planning. b. controlling. c. performance evaluation. d. decision making.
a
105. Accounting reports that provide feedback by comparing planned (budgeted) data with actual data are called: a. performance reports. b. favorable reports. c. auditing reports. d. improvement reports.
a
106. Setting the company's profit targets for the upcoming year is an example of the management function of a. planning. b. control. c. variance analysis. d. internal auditing.
a
107. Developing a company strategy for responding to anticipated new markets is an example of a. planning. b. control. c. performance evaluation. d. all of these.
a
117. Which of the following describes the managerial activity of comparing actual results with budgeted results? a. control b. continuous improvement c. planning d. decision making
a
122. Which of the following have been found to be TRUE? a. Firms that emphasize ethics outperform firms that don't emphasize ethics. b. Those corporations that mention ethics in their management reports have lower than average performance. c. Companies with a strong code of ethics and sense of integrity and honor will have trouble competing over the long run. d. All of these.
a
125. Extending the close of the fiscal year beyond December 31 so that some sales of next year are included in the current year would be a violation of which standard of ethical conduct for management accountants? a. competence b. confidentiality c. conformance d. all of these
a
126. When a management accountant attends training seminars on new FASB rules, which part of the IMA Code of Conduct is being observed? a. competence b. confidentiality c. integrity d. credibility
a
134. When a management accountant ignores data in favor of unsupported opinion, this action would speak most directly to which part of the IMA Code of Conduct? a. competence b. confidentiality c. independence d. credibility
a
137. Persons in the United States who provide external auditing services are designated as a. Certified Public Accountants. b. Certified Financial Accountants. c. Chartered Accountants. d. Certified Management Accountants.
a
138. An accountant certified to possess the minimal professional qualifications for an external auditor is a a. CPA b. CMA c. CIA d. all of these
a
139. Which of the following certifications require a candidate to pass a qualifying examination in Financial Planning, Performance, and Control and Financial Decision Making? a. The Certificate in Management Accounting b. The Certificate in Public Accounting c. The Certificate in Internal Auditing d. The Certificate in Financial Accounting
a
43. Which of the following is NOT a process associated with an accounting information system? a. auditing existing data b. collecting and recording data c. providing information to users d. analyzing and managing data
a
48. Cost management information systems provide information: a. for preparing the planning and controlling measures of an organization. b. to prepare statements of cash flows and balance sheets for external users. c. that can be used for regulatory measures. d. for stewardship evaluation.
a
53. Cost management is concerned with producing outputs for _____. a. internal managers b. creditors c. investors d. regulatory authorities
a
57. Which of the following activities is associated with the cost management information system? a. preparing reports for division managers b. preparing reports for the IRS c. preparing reports for the SEC d. preparing financial statements that conform to GAAP
a
59. Which of the following activities is NOT associated with the financial accounting information system? a. reporting on the cost of quality b. reporting to the SEC c. preparing reports for the IRS d. preparing a statement of cash flows
a
61. Which of the following statements is TRUE? a. The service sector comprises approximately three quarters of the United States' economy and employment. b. The service sector comprises approximately 20 percent of the United States' economy and employment. c. Traditional smokestack industries have increased in importance in recent years. d. The service sector has decreased in importance in recent years.
a
63. Factors that have led to a global market for manufacturing and service firms are a. improved transportation and communications systems. b. improved telemarketing and communications. c. improved telemarketing and transportation systems. d. None of these factors have contributed.
a
68. Software that has integrated system capability using real time data is a. enterprise resource planning software. b. on-line analytic programs. c. computer-assisted engineering software. d. none of these.
a
74. In JIT manufacturing, each operation produces a. only what is necessary for the succeeding operations. b. all that it can to offset fixed costs. c. a fixed percentage in excess of orders to ensure adequate quality stock. d. all that it can in order to build inventories.
a
82. Which of the following best describes sustainable development? a. It is defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs. b. It is defined as development that is designed to assign costs to individual products and services and other objects as specified by management. c. It is defined as development that is designed to provide accurate and timely feedback concerning the performance of managers and others relative to their planning and control of activities. d. It is defined as development that is primarily concerned with producing outputs for internal users using inputs and processes needed to satisfy management objectives.
a
83. Which of the following statements is NOT true about world-class firms? a. World-class firms are firms that are poor in customer support. b. World-class firms know their market and their products. c. World-class firms strive continually to improve product design, manufacture, and delivery. d. World-class firms can compete with the best of the best in a global environment.
a
85. A critical measure of efficiency is a. the cost of activity. b. a T-test. c. customer satisfaction. d. employee job satisfaction.
a
86. Today's cost managers must assemble cost information and determine how to value things. Which methods would NOT be critical to achieving this? a. foreign currency translation b. costing and quality analysis c. differentiating between value-added and non-value-added activities d. measuring productivity
a
94. Which of the following would be considered a line function? a. production b. maintenance c. public relations d. administrative services
a
95. Which of the following job positions is a staff position? a. controller b. production vice president c. production supervisor d. assembly foreman
a
102. Analyzing cost overruns to determine their cause is an example of a. planning. b. control. c. decision making. d. both a and c.
b
103. Monitoring the number of defects produced is an example of the management function of a. planning. b. control. c. decision making. d. both a and c.
b
109. Investigating production variances and adjusting the production process is an example of a. planning. b. control. c. internal auditing. d. both a and c.
b
111. Evaluating the performance of a segment of the company is an example of a. planning. b. control. c. internal auditing. d. both a and c.
b
113. The manager has to decide what tasks are needed and how they should be accomplished. This statement describes a. the organization chart. b. planning. c. organizing. d. none of these.
b
114. The monitoring of a plan's implementation is called a. planning. b. controlling. c. decision making. d. budgeting.
b
115. Inspecting units produced to determine if they meet specifications is an example of a. planning. b. control. c. decision making. d. both a and c.
b
119. In a company, engineers have redesigned production processes lowering production costs, shortening production cycle time, reducing waste and improving quality. Which type of managerial activity applies to this situation? a. controlling b. continuous improvement c. planning d. decision making
b
128. The acceptance of a savings bond from a supplier would be a violation of which standard of ethical conduct for management accountants? a. confidentiality b. integrity c. reliability d. none of these
b
135. Disclosing company information (when not legally obligated to do so) would be a violation of which part of the IMA Code of Conduct? a. competence b. confidentiality c. independence d. credibility
b
140. The certification sponsored by the Institute of Management Accountants that emphasizes economics, finance, management, financial accounting and reporting, management reporting, and decision analysis is the a. CPA b. CMA c. CIA d. all of these
b
44. The _____ information system is concerned with producing outputs for external users. a. forensic accounting b. financial accounting c. operational accounting d. lean accounting
b
51. The cost management information system is concerned with a. reporting financial information according to GAAP. b. providing cost information that is used in planning, control, and decision-making. c. reporting to external users. d. providing financial information to investors.
b
54. The type of management which broadens the focus of accounting because it is concerned with factors that drive costs, such as cycle time and process productivity is called:. a. Cost accounting b. Cost management c. Financial management d. Financial accounting
b
56. Which of the following costing activities is associated with the financial accounting system? a. determining the cost of a department b. determining the cost of goods sold for financial statements c. preparing budgets d. determining the cost of a customer
b
58. Which of the following information systems provides information that helps managers engage in a program of continuous improvement of all aspects of their businesses? a. The financial accounting information system b. The operational control information system c. The cost management information system d. The value chain information system
b
65. The _____ system is an integrated system capable of providing access to real-time data from the various functional areas of a company. a. financial management information b. enterprise resource planning c. lean accounting management d. operational control information
b
67. Which of the following is NOT an advance in information technology that affects firms? a. computer integrated applications b. GAAP reporting c. emergence of electronic commerce d. availability of tools such as OLAP and DSS
b
70. The increased importance of costing activities in the value chain and determining the cost of different suppliers and customers has led to the emergence of a. OLAP. b. EDI and supply chain management. c. CAM. d. theory of constraints.
b
72. Manufacturing environment automation is associated with increases in a. inventory. b. productive capacity. c. processing time. d. none of these.
b
75. JIT is a critical part of a more comprehensive approach referred to as: a. supply chain management b. lean manufacturing c. just-in-time manufacturing d. computer-integrated manufacturing
b
87. Staff positions are positions that are: a. directly involved in both financial and nonfinancial measures of efficiency of an organization. b. supportive in nature and have only indirect responsibility for an organization's basic objectives. c. supportive in nature and indirectly assess the overall cost impact of product designs over a product's life cycle. d. directly responsible for carrying out the basic objectives of an organization.
b
88. The internal auditor performs a a. line function. b. staff function. c. production function. d. marketing function.
b
89. Which of the following is an example of a staff position in an organization? a. Plant manager b. Accountant c. Marketing manager d. Sales officer
b
90. Which of the following positions would most likely be a line manager? a. personnel department manager b. production supervisor c. treasurer d. purchasing department manager
b
96. Accounting activities within an organization are usually under the overall supervision of the a. Certified Public Accountant. b. controller. c. Chartered Accountant. d. treasurer.
b
120. Determining the bid your company should submit on a construction contract is an example of a. planning. b. control. c. decision making. d. none of the above
c
121. Setting the selling price of a company's product is an example of a. planning. b. control. c. decision making. d. all of these.
c
130. In resolving an ethical conflict, which of the following would NEVER be appropriate? a. discussing the matter with the chief executive officer b. discussing the matter with an external member of the board of directors c. taking the matter to the press where there is no legal requirement d. resigning from the position because of a conflict
c
133. Engaging in or supporting an activity that would discredit the profession would relate to which part of the IMA Code of Conduct? a. competence b. independence c. integrity d. credibility
c
136. The Standards of Ethical Professional Practice of the Institute of Management Accountants addresses all of the following EXCEPT a. competence b. confidentiality c. strategic cost management d. integrity
c
42. In an accounting information system, which of the following is NOT a transformational process? a. collecting data b. analyzing data c. performance reporting d. summarizing data
c
46. Which of the following does NOT describe cost management system? a. evaluation of segments or products within the firm b. emphasis on the future c. externally focused d. focus on effective use of resources
c
47. Which of the following is NOT part of the financial accounting information system? a. filing reports with the SEC b. reporting a large contingent liability to current and potential shareholders c. determining the future cash flows of a proposed flexible manufacturing system d. preparing GAAP financial statements
c
49. Which of the following is NOT provided by cost accountants? a. cost information in accordance with GAAP b. cost information about processes and activities c. financial information for external users d. cost information about products, customers, and services
c
50. The primary objective of the cost management information system is to provide a. stockholders and potential investors with useful information for decision making. b. banks and other creditors with information useful in making credit decisions. c. management with information useful for planning and control of operations. d. the Internal Revenue Service with information about taxable income.
c
60. Which of the following is a cost management subsystem designed to assign costs to individual products and services and other objects, as specified by management a. financial accounting information system b. operational control system c. cost accounting information system d. all of the above
c
62. Any form of commerce that is executed using information and communications technology is called: a. ERP b. OLAP c. electronic commerce d. DSS
c
66. Which of the following advances in information technology includes external data sets and, at the same time, integrates the analysis with an organization's internal databases? a. Decision-support systems b. Integrated cost management c. Business analytics d. Online inventory system
c
69. Which of the following is an advantage of analyzing big data sets using business analytics? a. An increased current ratio b. A reduced arbitrage fund c. An improved quality d. A decreased basis risk
c
71. Which of the following activities is NOT significant to the advancement of information technology? a. enterprise resource planning software b. emergence of electronic commerce c. theory of constraints d. decision support systems
c
78. Competitive advantage is established by providing a. more customer products than competitors. b. better quality than competitors. c. greater customer value for less cost than competitors. d. greater efficiencies than competitors.
c
81. Cost management information systems further competitive advantage by supporting three fundamental organizational goals. Which of the following is NOT one of these fundamental organizational goals that further competitive advantage? a. improved time-based performance b. improved quality of products and services c. maximizing shareholder value d. improved efficiency
c
84. Which of the following decreases the non-value added time of producing a product and in turn increases the quality of the product? a. Increasing movements of subassemblies b. Adding processes in production c. Redesigning products d. Increasing time spent on delivery of products
c
91. Which of the following job positions is a line function? a. financial vice president b. controller c. production supervisor d. treasurer
c
92. All of the following would be considered staff functions EXCEPT the a. vice president of finance. b. vice president of corporate planning. c. vice president of marketing. d. vice president of research and development.
c
100. Currently, the activity found LEAST often within the controller's department is a. updating the general ledger. b. budget preparation. c. maintaining accounts receivable records. d. establishing and maintaining a market for the organization's debt and equity securities.
d
104. Comparing actual quality costs with planned quality costs is an example of a. planning. b. controlling. c. performance evaluation. d. both b and c.
d
108. The planning process includes a. setting objectives. b. identifying means of achieving the objectives. c. making decisions. d. all of these.
d
110. In a performance report, the a. differences between actual costs and allowed costs are always undesirable. b. expenditures of less than allowed amounts are undesirable. c. expenditures of more than allowed amounts are not permitted to occur. d. expenditures of less than allowed amounts are desirable.
d
112. The formulation of a program for the accomplishment of a specific purpose is referred to as a. controlling. b. motivating. c. organizing. d. planning.
d
116. Continuous improvement is a. critical in a dynamic environment. b. important to finding and maintaining a competitive advantage. c. an effort to find ways to increase overall efficiency, improve quality, and reduce costs. d. all of these.
d
118. Managers are considering outsourcing sub-components of production. Data is collected about the costs of making the sub-component. Different bids are sought about the purchase of the sub-components. Which managerial activity is applicable in this situation? a. control b. continuous improvement c. planning d. decision making
d
123. Principles of personal ethical behavior include a. integrity. b. respect for others. c. fairness. d. all of these.
d
124. Which of the following are standards of ethical conduct for management accountants? a. Perseverance and creativity b. Determination and respect for others c. Discipline, confidence, competitive, and observance d. Competence, confidentiality, integrity, and resolution and credibility
d
127. Altering dates of shipping documents of next January's sales to record them as sales in the current year would be a violation of which standard of ethical conduct for management accountants? a. competence b. integrity c. credibility d. all of these
d
129. In resolving an ethical conflict, it is inappropriate to discuss the problem with the immediate supervisor because of a violation of which standard of ethical conduct for management accountants? a. competence b. confidentiality c. credibility d. This action is not in violation of the code of conduct.
d
131. Which of the following relates to the credibility section of the IMA Code of Conduct? a. Prepare clear and complete reports. b. Communicate professional limitations. c. Avoid actual or apparent conflicts of interest. d. Communicate information fairly and objectively.
d
132. Disclosing all information, unfavorable as well as favorable, that could influence an intended user's understanding of reports, would relate to what section of the IMA Code of Conduct? a. competence b. independence c. integrity d. credibility
d
41. In an accounting information system, the inputs are usually a. financial statements. b. analyzing data. c. performance reports. d. economic events.
d
45. Financial accounting information is used for a. investment decisions. b. regulatory measures. c. stewardship evaluation. d. all of the above.
d
52. Cost accounting a. is concerned with assigning costs to various cost objects. b. attempts to satisfy the costing objectives of both financial accounting and management accounting. c. provides cost information that supports planning, controlling, and decision making. d. all of these.
d
55. Which of the following activities is NOT associated with the cost management information system? a. preparing a cost of quality report b. preparing a performance report that compares actual costs to budgeted costs c. determining the cost of a customer d. using future expected earnings to estimate the price of a share of common stock
d
64. Which of the following cost management tools supports the firm's concentration on the delivery of value to the customer? a. service industry growth b. global competition c. preparing an earnings report for the SEC d. value-chain analysis
d
73. Which of the following manufacturing management approaches has allowed firms to increase quality, reduce inventories, eliminate waste, and reduce costs? a. The operational manufacturing system b. Online analytic programs c. The decision-support system d. Lean manufacturing
d
76. A demand-pull system that strives to produce a product only when it is needed and only in the quantities demanded by customers is referred to as: a. supply chain management. b. theory of constraints. c. lean manufacturing. d. just-in-time manufacturing.
d
77. Which of the following emerging trends in cost accounting deals with managers striving to create an environment that will enable workers to manufacture perfect (zero-defect) products? a. advances in information technology b. time as a competitive element c. global competition d. total quality management
d
79. Which of the following activities is NOT associated with new product development? a. life-cycle costing b. target costing c. activity-based management d. performance reports
d
80. Total quality management emphasizes a. zero defects. b. continual improvement. c. elimination of waste. d. all of these.
d
93. Which of the following positions would most likely be a staff manager? a. manager of a Sears store b. president c. manager of a clothing division d. controller
d
97. The chief accounting officer of an organization is the a. vice president of finance. b. internal auditor. c. treasurer. d. controller.
d
98. Which of the following is the officer responsible for money management and serves chiefly as the custodian of the organization's funds? a. Certified Public Accountant b. controller c. Chartered Accountant d. treasurer
d
99. Which of the following duties is usually assigned to the controller? a. receiving, maintaining custody of, and disbursing monies and securities b. directing the granting of credit to clients c. investing the organization's funds d. tax planning
d