Ch. 1 The Accountant's Role in the Organization

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

The process of preparing a budget: A) forces coordination and communication across business functions B) increases accounting efficiencies C) reduces overcapacity D) promotes production automation

A

The scenario that resources should be spent if the expected benefits to the company exceed the expected costs describes: A) cost-benefit approach B) behavioral and technical considerations C) balanced scorecard D) different costs for different purposes

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 the cost-benefit approach is true? A) Resources should be spent if they are expected to better attain company goals in relation to the expected costs of these resources. B) In a cost-benefit analysis, both costs and benefits are easy to obtain. C) Resources should be spent if the costs of a decision outweigh the benefits of the decision. D) A cost-benefit approach would not be appropriate for a decision to install a budget system or not.

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

________ 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

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

Which of the following people is LEAST likely to use management accounting information? A) the controller B) a shareholder evaluating a stock investment C) the treasurer D) an assembly department supervisor

B

________ describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same organization or in other organizations. A) The value chain B) The supply chain C) Product differentiation D) Distribution

B

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 year's operating budget

C

Management accounting is considered most likely to be successful when it: A) helps creditors evaluate the company's performance B) helps investors improve their decisions C) is timely D) is relevant and reported annually

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

Planning consists of all of these areas EXCEPT: A) selecting organizational goals B) deciding how to attain the desired goals C) evaluating performance D) predicting results under various alternatives

C

Planning includes all of the following EXCEPT A) identifying the problem and uncertainties. B) obtaining information. C) providing feedback to help with future decision making. D) making predictions about the future.

C

Responsibilities of a CFO include all of the following EXCEPT: A) providing financial reports to shareholders B) managing short-term and long-term financing C) investing in new equipment D) preparing federal, state, and international tax returns

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

A budget can serve as: A) a planning tool B) a control tool C) a basis for preparing financial statements D) a planning and control tool

D

A budget: A) is a quantitative expression of a proposed management plan B) helps translate strategy into actions C) aids in the coordination and communication among various business functions D) All of these answers are correct.

D

All of the following report to the CFO EXCEPT the: A) controller B) tax department manager C) production manager D) treasurer

D

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 all of the following EXCEPT A) implementing strategies B) developing budgets C) preparing special studies and forecasts D) preparing the statement of cash flows

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

Managers use management accounting information to ________ strategy. A) choose B) communicate C) implement 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 ________ is primarily responsible for management accounting and financial accounting. A) COO (Chief Operating Officer) B) CIO (Chief Information Officer) C) treasurer D) controller

D

The most important planning tool is a ________. A) performance evaluation report B) balanced scorecard C) goal D) budget

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 item is NOT a guideline used by management accountants to assist in strategic and operational decision making? A) cost-benefit approach B) behavioral and technical considerations C) different costs for different purposes D) balanced scorecard

D

Which item is NOT an area that customers want to see improved levels of performance in? A) innovation B) quality C) cost and efficiency D) profit

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

________ 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