Management Accounting and Management Decisions

precaution Accounting, Cdn. 6e (Horngren/Sundem/Stratton/Beaulieu) Chapter 1 anxiety Accounting and attention Decisions 1) Both internal managers and impertinent parties use invoice reading. coiffe TRUE Diff 2 sign TF sc tout ensembleywag referee 16 object glass 8 2) Internal write up reports essential fol imprint world-widely accepted story principles and account for as limits at historic cost. practise ill-judged Diff 2 subject TF summon reader 16 documental 8 3) Organizations that do not make or shop tangible goods atomic number 18 called utility organizations. make TRUE Diff 1 vitrine TF rascal reviewer 7 butt 3 4) The cost-benefit balance is the particular consideration in choosing among story remainss and methods. per make up TRUE Diff 1 part TF rascal reader 2 nonsubjective 3 5) Planning refers to setting objectives, implementing envisions, and evaluating objectives. assist FALSE Diff 1 grammatical case TF paginate reviewer 3 target ara 2 6) A budget is a quantitative expression of a plan of implement. respond TRUE Diff 1 typesetters case TF scalawag reader 2 neutral 3 7) Management by riddance involves a slender analysis of all deviations from planned implementation regardless of the amount. dissolving agent FALSE Diff 1 fictional character TF page reviewer 2 bearing 3 8) gross revenue growth occurs in the mature securities industry confront of everyplacelap vitality cycle. react FALSE Diff 1 token TF rascal ref 9 neutral 4 9) absorb authority is authority exerted downward over subordinates. dish TRUE Diff 1 caseful TF foliate ref 12 intent 5 10) Line departments support or service mental faculty departments. help FALSE Diff 1 image TF scallywag Ref 12 accusatory 5 11) agree to the fiscal Executives Institute, the controllers function is to obtain some(prenominal) short-term and long-term loans. repartee FALSE Diff 1 symbol TF paginate Ref 14 12) The CMA program focuses o n focussing accounting and its share in Canadian business. Answer TRUE Diff 1 pillow slip TF rapscallion Ref 16 neutral 8 13) The factors causing changes in management accounting today include increased global competition, technological advances and increased exertion by Canadian companies. Answer FALSE Diff 1 case TF varlet Ref 16 Objective 8 14) The essence of the just-in- time philosophy is to conk waste. Answer TRUE Diff 1 flake TF page Ref 16 Objective 8 5) The community of Management Accountants of Canada (SMAC) has developed standards of honest take on for management accountants, which include standards of competence, confidentiality, integrity and objectivity. Answer TRUE Diff 1 Type TF Page Ref 20 Objective 9 16) A vista of managers selected which of the undermentioned business areas as the most common starting-point for future managers? A) Accounting. B) Finance. C) court-ordered environment of business. D) Computers in business. Answer A Diff 1 Type MC Pag e Ref 2 Objective 1 17) Management accounting refers to accounting instruction developed for A) shareholders.B) governmental authorities. C) managers within an organization. D) loan officers. Answer C Diff 1 Type MC Page Ref 16 Objective 8 18) ________ is a formal mechanism for profiting, organizing, and communicating study about an organizations activities. A) An accounting dodge B) Scorekeeping C) Management accounting D) circumspection direct Answer A Diff 1 Type MC Page Ref 3 Objective 2 19) ________ refers to accounting information developed for users within an organization. A) An accounting system B) Scorekeeping C) Management accountingD) monetary accounting Answer C Diff 1 Type MC Page Ref 3 Objective 2 20) ________ is the accumulation and classification of data. A) An accounting system B) Scorekeeping C) Management accounting D) Attention tell Answer B Diff 1 Type MC Page Ref 3 Objective 2 21) ________ means report and interpreting information that helps managers to focus on operating problems, imperfections, inefficiencies, and opportunities. A) Scorekeeping B) Attention directing C) Problem-solving D) None of the above Answer B Diff 1 Type MC Page Ref 3 Objective 2 2) ________ is the aspect of accounting that quantifies the likely final results of possible courses of action and often recommends the best course to follow. A) Scorekeeping B) Attention directing C) Problem-solving D) None of the above Answer C Diff 1 Type MC Page Ref 3 Objective 2 23) The codes of stick a bun in the oven for integrity include all of the following EXCEPT A) avoiding existent or apparent conflicts of touch on. B) refusing to advise or assist with the commission of fraud. C) recognizing and communicating nonrecreational limitations. D) communicating information subjectively. Answer DDiff 1 Type MC Page Ref 20 Objective 9 24) A clerk prepares a monthly report comparing the actual phone bill with the evaluate phone costs. This activity would be classified as A) problem-solving. B) scorekeeping. C) cookery. D) attention directing. Answer D Diff 1 Type MC Page Ref 3 Objective 2 25) Broad guide tonal patterns and detailed practices that in concert make up accepted accounting practice at a given time are referred to as A) GAAS. B) accounting conventions. C) GAAP. D) Revenue Canada regulations. Answer C Diff 1 Type MC Page Ref 16 Objective 8 26) Service organizationsA) sell tangible goods. B) are not wholesalers. C) are considered manufacturers. D) essential be profit-seeking. Answer B Diff 1 Type MC Page Ref 7 Objective 3 27) A characteristic of service organizations is that A) labour is intensive. B) output is easy to define. C) major inputs and outputs can be stored. D) imbed and equipment costs are high in proportion to labour costs. Answer A Diff 1 Type MC Page Ref 7 Objective 3 28) The watchword for the installation of systems in service industries and noncommercial organizations is A) maximize. B) simplicity. C) constraints. D ) complexity.Answer B Diff 1 Type MC Page Ref 7 Objective 3 29) Which of the following is a characteristic of both profit-seeking and non-profit-making service organizations? A) Labour is intensive. B) Output is usually difficult to define. C) Major inputs and outputs cannot be stored. D) All of the above are characteristics. Answer D Diff 1 Type MC Page Ref 7 Objective 3 30) Financial accounting is constrained by GAAP. Management accounting is constrained by A) GAAS. B) the cost-benefit balance. C) Revenue Canada. D) the controller. Answer B Diff 1 Type MC Page Ref 16 Objective 8 1) The primary consideration in choosing among accounting systems and methods is A) simplicity. B) behavioural issues. C) cost-benefit balance. D) computerization. Answer C Diff 1 Type MC Page Ref 3 Objective 2 32) An accounting system should provide accurate, timely budgets and performance reports in a form reusable to A) shareholders. B) bankers. C) Revenue Canada. D) managers. Answer D Diff 1 Type MC Page Ref 3 Objective 2 33) ________ is (are) a quantitative expression(s) of a plan of action. A) A budget B) Performance reports C) Variances D) Management by expulsion Answer ADiff 1 Type MC Page Ref 3 Objective 2 34) ________ provide(s) feedback by comparing results with plans and by highlighting deviations from plans. A) A budget B) Performance reports C) Variances D) Management by exception Answer B Diff 1 Type MC Page Ref 3 Objective 2 35) ________ is (are) deviations from plans. A) A budget B) Performance reports C) Variances D) Management by exception Answer C Diff 1 Type MC Page Ref 3 Objective 2 36) ________ concentrate(s) on areas that deviate from the plan and ignore(s) areas that are presumed to be running smoothly. A) A budgetB) Performance reports C) Variances D) Management by exception Answer D Diff 1 Type MC Page Ref 3 Objective 2 37) Launching a new crop communication channel is an example of A) decision making. B) planning. C) controlling. D) organization. Answ er A Diff 1 Type MC Page Ref 3 Objective 2 38) answer the following questions When is dinner? Who is cooking it? is an example of A) planning. B) controlling. C) budgeting. D) analyzing. Answer A Diff 1 Type MC Page Ref 3 Objective 2 39) Cooking dinner and tasting the food are examples of A) planning. B) controlling. C) budgeting.D) analyzing. Answer B Diff 1 Type MC Page Ref 3 Objective 2 40) Planning determines action, action generates feedback, and feedback influences A) reports. B) accounting systems. C) further planning. D) deviations. Answer C Diff 1 Type MC Page Ref 3 Objective 2 41) A quantitative expression of a plan of action is a A) variance. B) performance report. C) control. D) budget. Answer D Diff 1 Type MC Page Ref 3 Objective 2 42) Actual results are compared to budgeted amounts in a A) performance report. B) pecuniary statement. C) production report. D) flexible report.Answer A Diff 1 Type MC Page Ref 3 Objective 2 43) Management by exception means management con centrates on A) world-shattering activities action as planned. B) significant deviations from expected results. C) insignificant activities proceeding as planned. D) insignificant deviations from expected results. Answer B Diff 1 Type MC Page Ref 3 Objective 2 44) A synonym for deviation is A) planned. B) systematic. C) variance. D) reported. Answer C Diff 1 Type MC Page Ref 3 Objective 2 45) A significant unfavourable variance A) should be ignored because of materiality.B) could not result from perfunctory budgeting. C) is the result of proper planning. D) should be analyzed, and measures should be taken to correct the situation. Answer D Diff 1 Type MC Page Ref 3 Objective 2 46) The product development stage in a products life cycle corresponds to A) no gross sales. B) sales growth. C) enduring sales level. D) low and decreasing sales. Answer A Diff 1 Type MC Page Ref 9 Objective 4 47) The introduction to market stage in a products life cycle corresponds to A) no sales. B) sa les growth. C) stable sales level. D) low and decreasing sales. Answer BDiff 1 Type MC Page Ref 9 Objective 4 48) The mature market stage in a products life cycle corresponds to A) no sales. B) sales growth. C) stable sales level. D) low and decreasing sales. Answer C Diff 1 Type MC Page Ref 9 Objective 4 49) The phase-out-of-product stage in a products life cycle corresponds to A) no sales. B) sales growth. C) stable sales level. D) low sales to no sales. Answer D Diff 1 Type MC Page Ref 9 Objective 4 50) The various stages through which a product passes are called the A) product life cycle. B) production plan. C) market analysis. D) product initiative.Answer A Diff 1 Type MC Page Ref 9 Objective 4 51) overlap life cycles A) are the same for all products. B) must be considered to in effect plan for production. C) are computerized bicycles. D) have nothing to do with product profitability. Answer B Diff 1 Type MC Page Ref 9 Objective 4 52) agency exerted downward over subordinates is referred to as A) breeze authority. B) staff authority. C) general authority. D) specific authority. Answer A Diff 1 Type MC Page Ref 12 Objective 5 53) berth to advise but NOT command is called A) line authority. B) staff authority.C) general authority. D) specific authority. Answer B Diff 1 Type MC Page Ref 12 Objective 5 54) An example of a line department at a jewelry manufacturer is the A) accounting department. B) pay department. C) maintenance department. D) sales department. Answer D Diff 1 Type MC Page Ref 12 Objective 5 55) According to the Financial Executives Institute, one function of controllership is A) investments. B) short-term financing. C) provision of capital. D) reporting and interpreting. Answer D Diff 1 Type MC Page Ref 14 56) The draw accounting officer in an organization is oftenA) the controller. B) the treasurer. C) the CFO. D) the CEO. Answer A Diff 1 Type MC Page Ref 14 57) ________ is mainly touch with the companys financial matters. A) The con troller B) The treasurer C) The secretary D) None of the above Answer B Diff 1 Type MC Page Ref 14 58) ________ is the designation that provides the greatest orientation toward management accounting. A) CIA B) CMA C) CEO D) CGA Answer B Diff 1 Type MC Page Ref 14 59) According to the Financial Executives Institute, one function of treasurership is A) planning for control.B) protection of assets. C) investor relations. D) economic appraisal. Answer C Diff 1 Type MC Page Ref 14 Objective 6 60) lease Accountants are A) internal auditors. B) management accountants. C) extraneous auditors. D) clerical accountants. Answer C Diff 1 Type MC Page Ref 16 Objective 8 61) The largest Canadian association of maestro accountants whose major interest is management accounting is the A) Canadian Institute of Chartered Accountants. B) Certified General Accountants of Canada. C) Government Accounting Institute. D) Society of Management Accountants of Canada.Answer D Diff 1 Type MC Page Ref 16 Object ive 8 62) A philosophy to manage waste by lessen the time products extend in the production touch and eliminating the time that products spend on activities that do NOT add value is A) computer-integrated manufacturing. B) just-in-time. C) better new-fashioned than never. D) added value tax. Answer B Diff 1 Type MC Page Ref 16 Objective 8 63) Systems that use computer-aided design and computer-aided manufacturing, together with robots and computer-controlled machines are called A) just-in-time systems. B) robotic-computer systems.C) computer-integrated manufacturing systems. D) manufacturing-robotic systems. Answer C Diff 1 Type MC Page Ref 16 Objective 8 64) Which of the following factors is causing changes in management accounting today? A) Shift from a manufacturing-based to a service-based economy. B) increase global competition. C) Advances in technology. D) All of the above are factors. Answer D Diff 1 Type MC Page Ref 16 Objective 8 65) Systems that use CAD and CAM toget her with robots and computer-controlled machines are called A) JIT. B) CMA. C) CIM. D) none of the above.Answer C Diff 1 Type MC Page Ref 16 Objective 8 66) Below is a statement from the Code of Professional morality for the Society of Management Accountants. Maintain at all times license of thought and action. It is an example of A) competence. B) confidentiality. C) integrity. D) objectivity. Answer D Diff 1 Type MC Page Ref 20 Objective 9 67) Management accountants are similar to CAs and CGAs in that they A) give opinions on financial statements. B) are clear by the Canadian Institute of public accountancy. C) stick to to codes of conduct.D) are commutative of the company they work for. Answer C Diff 1 Type MC Page Ref 16 Objective 8 68) The Society of Management Accountants has adopted a set of standards of professional ethics which includes codes of conduct regarding all of the following EXCEPT A) competence. B) independence. C) integrity. D) confidentiality. Answer B Dif f 1 Type MC Page Ref 20 Objective 9 69) Which of the following individuals would likely NOT be users of management accounting reports? A) company presidents B) university deans C) bankers D) chief physicians Answer CDiff 2 Type MC Page Ref 16 Objective 8 70) Which of the following statements about management accounting is FALSE? A) It is concerned with how measurements and reports will influence managers daily behaviour. B) It is less sharply defined than financial accounting. C) Its primary users are organizational managers at various levels. D) It is constrained by generally accepted accounting principles. Answer D Diff 2 Type MC Page Ref 16 Objective 8 71) Which of the following statements about ethical dilemmas faced by management accountants is FALSE? respectable dilemmas A) are clear-cut. B) involve conflict between two or more than ethical standard. C) require individual integrity and judgment. D) require the application of ethical standards. Answer A Diff 2 Type MC Page Re f 20 Objective 9 72) Which of the following statements about line authority is TRUE? Line authority A) is similar to staff authority. B) is indirectly connect to the staple activities of an organization. C) is exerted upwardly from subordinates. D) includes the authority to command action. Answer D Diff 1 Type MC Page Ref 12 Objective 5 3) Broad concepts or guidelines and detailed practices, including all conventions, rules, and procedures that together make up accepted accounting practice at a given time. Answer Generally accepted accounting principles Diff 1 Type SA Page Ref 16 Objective 8 74) The person from whom the controller derives authority to set accounting procedures. Answer The company president Diff 1 Type SA Page Ref 12 75) Weighing known costs against probable benefits, the primary consideration in choosing among accounting systems and methods. Answer Cost-benefit balance Diff 1 Type SA Page Ref 11Objective 7 76) A quantitative expression of a plan of action, and an a id to coordinating and implementing the plan. Answer Budget Diff 1 Type SA Page Ref 2 Objective 2 77) Deviations from plans. Answer Variances Diff 1 Type SA Page Ref 2 Objective 2 78) Concentrating on areas that deserve attention and ignoring areas that are presumed to be running smoothly. Answer Management by exception Diff 1 Type SA Page Ref 2 Objective 2 79) Authority exerted downward over subordinates. Answer Line authority Diff 1 Type SA Page Ref 12Objective 5 80) Authority to advise but not to command. It whitethorn be exerted downward, laterally, or upward. Answer Staff authority Diff 1 Type SA Page Ref 12 Objective 5 81) The largest Canadian professional organization of accountants whose major interest is management accounting. Answer Society of Management Accountants Diff 1 Type SA Page Ref 16 Objective 8 82) A philosophy to eliminate waste, by reducing the time products spend in the production process and eliminating the time that products spend on activities that do not a dd value. Answer Just-in-time philosophyDiff 1 Type SA Page Ref 16 Objective 8 83) Describe the major users of accounting information. Answer In general, users of accounting information fall into three categories (1) Internal managers who use the information for short-term planning and controlling routine operations. (2) Internal managers who use the information for making nonroutine decisions and formulating boilers suit policies and long-range plans. (3) External parties, such as investors and government authorities, who use the information for making decisions about the company. Diff 1 Type ES Page Ref 2 Objective 1 4) Explain the cost-benefit and behavioral issues involved in designing an accounting system. Answer The cost-benefit balance, weighing known costs against probable benefits, is the primary consideration in choosing among accounting systems. The systems value must clear its cost. In addition, the systems effects on the behaviour of managers should also be considere d. The system must provide accurate, timely budgets and performance reports in a form useful to managers. Diff 1 Type ES Page Ref 14 Objective 7 85) Distinguish between line and staff roles in an organization, and give an example of each.Answer Line authority is authority exerted downward over subordinates. Staff authority is authority to advise but not to command. It may be exerted downward, laterally, or upward. Line departments are directly responsible for conducting the basic mission of the organization, that is, producing and selling a product or service. Staff departments are indirectly related to these basic activities through servicing and supporting the line departments. An example of a line role would be the sales executives, whereas a staff role would include the top accounting executive.Diff 1 Type ES Page Ref 12 Objective 5 86) credit line the functions of controllers and treasurers. Answer The treasurer is concerned mainly with the companys financial matters such as i nvestor relations, provision of capital, short-term financing, credits and collections, and banking. The controller is concerned with operating matters such as reporting and interpreting, evaluating and consulting, tax administration, government reporting, and protection of assets. Diff 1 Type ES Page Ref 1 87) Explain a management accountants ethical responsibilities.Answer A certified management accountant must adhere to a code of conduct regarding competence, confidentiality, integrity, and objectivity developed by the Society of Management Accountants. An unethical act is one that violates the ethical standards of the profession. Management accountants have an obligation to the organizations they serve, their profession, the public, and themselves to maintain the highest standards of ethical conduct. Diff 1 Type ES Page Ref 20 Objective 9 88) Explain the role of budgets and performance reports in planning and control.Answer Budgets and performance reports are essential tools for planning and control. Budgets result from the planning process. Managers use them to translate the organizations goals into action. A performance report compares actual results to the budget. Managers use these reports to monitor, evaluate, and reward performance and, thus, exercise control. Diff 3 Type ES Page Ref 3 Objective 2 89) Discuss the role that management accountants play in the companys value-chain functions. Answer Management accountants play a key role in planning and control.Throughout the companys value chain, management accountants gather and report cost and revenue information for decision makers. Diff 2 Type ES Page Ref 9 Objective 4 90) learn current trends in management accounting. Answer Many factors have caused changes in accounting systems in recent years. Most significant are globalization, technology, and a shift from a manufacturing-based to a service-based economy. Without continuous adaptation and improvement, accounting systems would be obsolete. Diff 2 Type ES Page Ref 16 Objective 8