ACC Chapter 18 ( 55- 84) – Flashcards

55. Managerial accounting information: A. Is used mainly by external users. B. Involves gathering information about costs for planning and control decisions. C. Is generally the only accounting information available to managers. D. Can be used for control purposes but not for planning purposes. E. Has little to do with controlling costs.

56. Managerial accounting is different from financial accounting in that A. Managerial accounting is more focused on the organization as a whole and financial accounting is more focused on subdivisions of the organization. B. Managerial accounting never includes nonmonetary information. C. Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions. D. Managerial accounting is used extensively by investors, whereas financial accounting is used only by creditors. E. Managerial accounting is mainly used to set stock prices

57. Flexibility of practice when applied to managerial accounting means that A. The information must be presented in electronic format so that it is easily changed. B. Managers must be willing to accept the information as the accountants present it to them, rather than in the format they ask for. C. The managerial accountants need to be on call twenty-four hours a day. D. The design of a company's managerial accounting system largely depends on the nature of the business and the arrangement of the internal operations of the company. E. Managers must be flexible with information provided in varying forms and using inconsistent measures.

58. Which of the following items represents a difference between financial and managerial accounting? A. Users of the information. B. Flexibility of practices. C. Timeliness and time dimension of the information reported. D. Nature of the information. E. All of these.

59. Which of the following items are management concepts that were created to improve companies' performances? A. Just-in-time manufacturing. B. Customer orientation. C. Total quality management. D. Continuous improvement. E. All of these.

60. The Malcolm Baldridge Award was established by A. The United Nations. B. The U.S. Chamber of Commerce. C. The Malcolm Baldridge Foundation. D. The U.S. Congress. E. The SEC.

61. Continuous improvement: A. Is a measure of profits. B. Is a measure of costs. C. Rejects the notion of "good enough." D. Is not applicable to most businesses. E. Is possible only in service businesses.

62. An attitude of constantly seeking ways to improve company operations, including customer service, product quality, product features, the production process, and employee interactions, is called: A. Continuous improvement. B. Customer orientation. C. Just-in-time. D. Theory of constraints. E. Total quality measurement.

63. A management concept that encourages all managers and employees to be in tune with the wants and needs of customers, and which leads to flexible product designs and production processes, is called: A. Continuous improvement. B. Customer orientation. C. Just-in-time. D. Theory of constraints. E. Total quality management.

64. An approach to managing inventories and production operations such that units of materials and products are obtained and provided only as they are needed is called: A. Continuous improvement. B. Customer orientation. C. Just-in-time manufacturing. D. Theory of constraints. E. Total quality management.

65. A management concept that applies quality improvement to all aspects of business activities is called: A. Continuous operations. B. Customer orientation. C. Just-in-time. D. Theory of constraints. E. Total quality management.

66. The model whose goal is to eliminate waste while satisfying the customer and providing a positive return to the company is: A. Total quality management. B. Managerial accounting. C. Customer orientation. D. Continuous improvement. E. Lean business model.

67. Benny, an employee of Parrott Company, used company assets for his own personal gain. This is an example of A. embezzlement B. fraud C. internal control D. ethics E. employment perks

68. An employee is dissatisfied with the resolution of an ethical conflict at his place of employment. According to the Institute of Management Accountants, the employee's next step should be to A. contact the IMA B. contact the next level of management who is not involved in the ethical conflict C. make the president of the company aware of the ethical conflict D. report the incident to the State Board of Accountancy E. resign from the company

69. A direct cost is a cost that is: A. Identifiable as controllable. B. Variable with respect to the volume of activity. C. Fixed with respect to the volume of activity. D. Traceable to a cost object. E. Sunk with respect to a cost object.

70. An opportunity cost is: A. An uncontrollable cost. B. A cost of potential benefit lost. C. A change in the cost of a component. D. A direct cost. E. A sunk cost.

71. Classifying costs by behavior involves: A. Identifying fixed cost and variable cost. B. Identifying cost of goods sold and operating costs. C. Identifying all costs. D. Identifying costs in a physical manner. E. Identifying both quantitative and qualitative cost factors.

72. Costs classified by controllability are useful for: A. The balance sheet. B. The income statement. C. Management reports. D. Evaluation reports. E. Both C and D.

73. A mixed cost: A. Requires the future outlay of cash and is relevant for future decision making. B. Does not change with changes in the volume of activity within the relevant range. C. Is directly traceable to a cost object. D. Contains a combination of fixed costs and variable costs. E. Has already been incurred and cannot be avoided so it is irrelevant for decision making.

74. A fixed cost: A. Requires the future outlay of cash and is relevant for future decision making. B. Does not change with changes in the volume of activity within the relevant range. C. Is directly traceable to a cost object. D. Changes with changes in the volume of activity within the relevant range. E. Has already been incurred and cannot be avoided so it is irrelevant for decision making.

75. Last year, Smith Company sold 10,000 units of its only product. If sales increase by 15% in the current year, how will unit variable cost and unit fixed cost be affected? Unit variable cost....................Unit fixed cost A) Remains constant..............remains constant B) Increases................................Decreases C) Decreases.............................Remains constant D) Remains constant...............Decreases E) Remains constant................Increases A. Choice A B. Choice B C. Choice C D. Choice D E. Choice E

76. A primary difference between variable costs and fixed costs is: A. Variable costs per unit change in varying increments while fixed costs per unit change in equal increments over the relevant range of activity. B. Variable costs per unit fluctuate and fixed costs per unit remain constant over the relevant range of activity. C. Variable costs per unit are fixed and fixed costs per unit are variable over the relevant range of activity. D. Variable costs per unit change in equal increments while total fixed costs change in proportion to the level of activity over the company's relevant range. E. Total variable costs are fixed and fixed costs per unit never change over the relevant range of activity.

77. Period costs for a manufacturing company would flow directly to: A. The current income statement. B. Factory overhead. C. The current balance sheet. D. Job cost sheet. E. The current manufacturing statement.

78. For product costs associated with a particular product to be expensed on the income statement: A. The product must be transferred to Finished Goods Inventory. B. The product must still be in Goods In Process Inventory. C. The product must be sold. D. The product may be in any of the manufacturer's inventory accounts. E. The company must expect to sell the product during the next twelve months.

79. Costs that are first assigned to inventory are called: A. Period costs. B. Product costs. C. General costs. D. Administrative costs. E. Fixed costs.

80. Costs that flow directly to the current income statement are called: A. Period costs. B. Product costs. C. General costs. D. Balance sheet costs. E. Capitalized costs.

81. Product costs: A. Are expenditures necessary and integral to finished products. B. Are expenditures identified more with a time period rather than with finished products. C. Include selling and administrative expenses. D. Are costs that vary with the volume of activity. E. Are costs that do not vary with the volume of activity.

82. Products that have been completed and are ready to be sold by the manufacturer are called: A. Finished goods inventory. B. Goods in process inventory. C. Raw materials inventory. D. Cost of goods sold. E. Factory supplies.

83. Goods a company acquires to use in making products are called: A. Cost of goods sold. B. Raw materials inventory. C. Finished goods inventory. D. Goods in process inventory. E. Conversion costs.

84. Products that are in the process of being manufactured but are not yet complete are called: A. Raw materials inventory. B. Conversion costs. C. Cost of goods sold. D. Goods in process inventory. E. Finished goods inventory.