Chap 1 and 2

Financial accounting is concerned PRIMARILY with: a. external reporting to investors, creditors, and government authorities b. cost planning and cost controls c. profitability analysis 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 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. marketing d. the supply chain

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

Which of the following groups would be LEAST likely to receive detailed management accounting reports? a. stockholders b. sales representatives c. production supervisors d. managers

A

Which of the following statements about customer value is NOT true? a. Customer value is shown in a corporations balance sheet. b. Creating value for customers is an important part of planning and implementing strategy. c. How our product delivers customer value should be determined as part of a companys strategy formulation. d. It is possible to simultaneously lower cost and increase customer value.

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 and records business transactions

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

An Enterprise Resource Planning System can best be described as: a. a collection of programs that use a variety of unconnected databases b. a single database that collects data and feeds it into applications that support each of the companys business activities, such as purchases, production, distribution, and sales c. a database that is primarily used by a purchasing department to determine the correct amount of a particular supply item to purchase d. a sophisticated means of linking two or more companies to facilitate their planning processes

B

Cost accounting provides all of the following EXCEPT: a. information for management accounting and financial accounting b. pricing information from marketing studies c. financial information regarding the cost of acquiring resources d. nonfinancial information regarding the cost of operational efficiencies

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. reports include detailed information on the various operating segments of the business such as product lines or departments d. is prepared for the use of department heads and other employees

B

In designing strategy, a company must match the opportunities and threats in the marketplace with: a. those of the CFO (Chief Financial Officer) b. its resources and capabilities c. branding opportunities d. capabilities of current suppliers

B

__________ is the detailed planning and engineering of products, services, or processes. a. Distribution b. Design of products, services, or processes c. Production d. Marketing

B

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

Financial accounting provides the PRIMARY source of information for: a. decision making in the finishing department b. improving customer service c. preparing the income statement for shareholders d. planning next years operating budget

C

Place the four business functions in the order they appear along the value chain: A = Customer service B = Design C = Distribution D = Production a. A B D C b. A C D B c. B D C A d. B A D C

C

Strategy is formulated by answering all of the following EXCEPT: a. Who are our most important customers? b. Is industry demand growing or shrinking? c. Will our external auditors certify our strategy? d. How sensitive are purchasers to price, quality, and service?

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

The person MOST likely to use ONLY financial accounting information is a: a. factory shift supervisor b. vice president of operations c. current shareholder d. department manager

C

Which of the following is NOT one of the questions management accountants might attempt to help answer in the formulation of strategy? a. Who are our most important customers? b. What substitute products exist in the marketplace? c. Does the strategy comply with GAAP (Generally Accepted Accounting Principles)? d. Will adequate cash be available to implement the strategy?

C

Which of the following statements concerning an organizations strategy is NOT true? a. Strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives. b. Management accountants provide input to help managers formulate strategy. c. A good strategy will always overcome poor implementation. d. Businesses usually follow one of two broad strategies: offering a quality product at a low price, or offering a unique product or service priced higher than the competition.

C

__________ is the acquisition, coordination, and assembly of resources to produce a product or deliver a service. a. Research and development b. Customer service c. Production d. Marketing

C

Cost accounting: a. provides information on the efficiency of factory labor b. provides information on the cost of servicing commercial customers c. provides information on the performance of an operating division d. All of these answers are correct

D

Management accounting includes: a. implementing strategies b. developing budgets c. preparing special studies and forecasts d. All of these answers are correct.

D

Management accounting information 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

Modern cost accounting plays a role in: a. planning new products b. evaluating operational processes c. controlling costs d. All of these answers are correct.

D

The person MOST likely to use management accounting information is a(n): a. banker evaluating a credit application b. shareholder evaluating a stock investment c. governmental taxing authority d. assembly department supervisor

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. value is proportionately added to the products or services of an organization 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 descriptors refers to management accounting information? a. It is verifiable and reliable. b. It is driven by rules. c. It is prepared for shareholders. d. It provides reasonable and timely estimates.

D

Which of the following types of information are used in management accounting? a. financial information b. nonfinancial information c. information focused on the long term d. All of these answers are correct.

D

A good cost accounting system is narrowly focused on a continuous reduction of costs.

F

An ideal database should consist of data that could be used for a single purpose only.

F

Cost accounting provides information only for management accounting purposes

F

Financial accounting is broader in scope than management accounting.

F

Management accounting information focuses on external reporting.

F

The balance sheet, income statement, and statement of cash flows are used for financial accounting, but not for management accounting.

F

An Enterprise Resource Planning (ERP) System is a single database that collects data and feeds into applications that support each of the companys business activities, such as purchases, production, distribution, and sales.

T

Cost accounting measures and reports short-term, long-term, financial, and nonfinancial information

T

Cost management provides information that helps increase value for customers

T

Modern cost accounting plays a significant role in management decision making.

T