question

Evaluating operations by comparing actual results to budgeted results is a part of the controlling responsibility of management.:

answer

TRUE

question

Controlling means overseeing the company's day-to-day operations

answer

FALSE

question

The purpose of managerial accounting is to gather, summarize, and report the cost and revenue data relevant to each decision that is made

answer

TRUE

question

Budgeting is the process of evaluating the results of business operations against a plan and then making adjustments to that plan

answer

FALSE

question

Planning, directing, and controlling are a manager's three primary responsibilities

answer

TRUE

question

Managerial accounting develops reports that help internal parties effectively and efficiently run the company.:

answer

TRUE

question

Directing means setting goals and objectives for the company and determining how to achieve them

answer

FALSE

question

Budgets are the quantitative expression of management's plans

answer

TRUE

question

The SEC requires that reports generated by the managerial accounting system must be audited by an independent certified public accountant (CPA).

answer

FALSE

question

The design of a management accounting system should consider how reports affect employees' behavior

answer

TRUE

question

GAAP must be followed when preparing managerial accounting reports.:

answer

FALSE

question

Management accounting requires independent audits of the firm's books

answer

FALSE

question

The primary purpose of managerial accounting information is to help external users make investing and lending decisions

answer

FALSE

question

Internal users such as managers are the primary users of managerial accounting information.

answer

TRUE

question

The primary managerial accounting product is the company's audited financial statements

answer

FALSE

question

Managerial accounting information emphasizes relevance over reliability and objectivity

answer

TRUE

question

Managerial accounting information tends to report on segments of the business.

answer

TRUE

question

Managerial accounting reports are always prepared on a quarterly and annual

answer

FALSE

question

Managerial information is always based on historical transactions with external parties.

answer

FALSE

question

Management accountants rarely interact with employees from other business functions such as marketing and customer service.:

answer

FALSE

question

The CFO is the person responsible for the day-to-day operations of the company

answer

FALSE

question

The treasurer and the controller report directly to the CFO.:

answer

TRUE

question

The internal audit department reports directly to the audit committee, a subcommittee of the board of directors.:

answer

TRUE

question

Managerial accountants no longer perform routine mechanical accounting tasks in most companies.:

answer

TRUE

question

Managerial accountants are now considered to be similar to advisors and business analysts

answer

TRUE

question

Oral and written communications skills are considered among the most valuable skills a management accountant can possess.:

answer

TRUE

question

Technology has been a driving factor in the changing roles of management accountants

answer

TRUE

question

Management accountants spend more time planning, analyzing and interpreting accounting data and less time recording routine accounting transactions than they have in the past.

answer

TRUE

question

The only skill required of managerial accountants is that they have a solid knowledge of both financial and managerial accounting.

answer

FALSE

question

Managerial accountants only need a solid understanding of managerial accounting, and not financial accounting.

answer

FALSE

question

The IMA suggests that members discuss ethical dilemmas with the company's board of directors

answer

FALSE

question

The IMA is the professional association for managerial accountants.:

answer

TRUE

question

The IMA issues the CMA designation.:

answer

TRUE

question

Your company sends you to a conference to update your skills. It is a violation of the professional competency and integrity standards if you decide to skip the afternoon session and go sightseeing.

answer

TRUE

question

The ethical principles and standards of the IMA always give clear guidance for every ethical situation

answer

FALSE

question

The "Ethics Hotline" provides specific resolutions (answers) to IMA members who face ethical

answer

FALSE

question

Just because a behavior is legal does not always mean it is ethical

answer

TRUE

question

The IMA's overarching ethical principles include: Honesty, Fairness, Objectivity, and Responsibility.:

answer

TRUE

question

The IMA suggests that, when faced with an ethical dilemma, the first thing management accountants should do is call the IMA's ethics hotline

answer

FALSE

question

Managerial accounting is becoming less relevant as the U.S. economy shifts away from the manufacturing industry towards the service industry.:

answer

FALSE

question

The Sarbanes-Oxley Act was designed to hold corporations accountable for internal control and financial reporting functions

answer

TRUE

question

The Sarbanes-Oxley Act has significantly impacted the responsibility for financial reporting by publicly traded corporations

answer

TRUE

question

CPA firms cannot provide consulting services for their current audit clients.:

answer

TRUE

question

Trends in the modern business environment include a shift to a service economy and the rise of the global marketplace.:

answer

TRUE

question

The concept of the lean thinking philosophy is generally credited to General Motors

answer

FALSE

question

Implementing a program to bill customers electronically, therefore saving paper, is a green initiative that would reduce not only waste, but also company costs

answer

TRUE

question

Lean production cuts the throughput time of a manufacturing concern

answer

TRUE

question

ISO 9001:2008 is a certification program for companies that adhere to an international set of quality management standards and guidelines

answer

TRUE

question

According to SOX, at least one member of the audit committee should be a financial expert

answer

TRUE

question

IFRS stands for "important financial reporting standards

answer

FALSE

question

XBRL will be required of both public and private companies.:

answer

FALSE

question

Managerial accounting has its roots in the industrial age of manufacturing.:

answer

TRUE

question

Lean thinking is both a philosophy and a business strategy of manufacturing without waste

answer

TRUE

question

The American Institute of Certified Public Accountants was the first professional membership organization in the United States to earn the ISO 9001 certification.:

answer

TRUE

question

Sustainability is generally described as the ability to meet the needs of the present without compromising the ability of future generations to meet their own needs.

answer

TRUE

question

Company initiatives to address sustainability and corporate responsibility not only "do the right thing," but also can lead to economic profits by increasing demand for the company's products and services

answer

TRUE

question

________ gathers, summarizes, and reports on the financial impact of changes to business operations

answer

managerial accounting

question

Creating budgets are part of which primary management responsibility?

answer

planning

question

Which of the following is not one of the primary responsibilities of management?

answer

Adhering to GAAP

question

Planning involves which of the following activities?

answer

Setting goals and objectives for the company

question

Which of the following is being fulfilled when management compares the budget to actual results?

answer

controlling

question

When management uses feedback to take corrective action on the budgets, which of the following management responsibilities are being fulfilled?

answer

controlling

question

When management analyzes whether to move production to another country or to keep the production located where it currently is, which of the following management responsibilities is being performed?

answer

planning

question

Which one of the following items is not one of the three primary manager responsibilities?

answer

adjusting

question

Using product cost information to determine sales prices is an example of

answer

directing and planning

question

When management reviews hourly sales reports to determine the level of staffing needed to service customers, which of management's three primary responsibilities is fulfilled?

answer

Directing and planning

question

Budgets are a way for managers to communicate their

answer

plans

question

Comparing actual results to budgets is an example of which of the following management functions?

answer

controlling

question

Overseeing the day-to-day operations of a company is an example of which of the following management functions?

answer

directing

question

Preparing budgets is an example of which of the following management functions?

answer

planning

question

Evaluating results against the plan is an example of which of the following management functions?

answer

controlling

question

What are the three primary responsibilities of managers as described in the chapter? Give an example of each type of responsibility.

answer

a. Planning: An example of planning is when the manager of a local McDonald's restaurant makes the schedule of employee work hours for the upcoming week. b. Directing: An example of directing is when the manager of the local McDonald's adjusts the menu to reflect local tastes and preferences. c. Controlling: An example of controlling is when the manager of the local McDonald's compares the actual number of hamburger patties used over the past week to the budgeted number of hamburger patties.

question

What is one constraint placed on the information provided by a managerial accounting system?

answer

Cost - Benefit

question

How often should managerial accounting reports be prepared?

answer

as often as necessary

question

Which of the following statements is true regarding managerial accounting information?

answer

It is audited by CPAs.

question

The focus of management accounting is on

answer

internal reporting.

question

Which of the following people is most likely to only use financial accounting information?

answer

Bank loan officer

question

Managerial accounting would use which of the following types of information?

answer

Forecasts of future earnings Financial information Nonfinancial information D) All of the above

question

Which of the following persons or groups would be least likely to receive detailed managerial accounting reports?

answer

Current shareholders

question

________ is designed to meet the needs of internal decision makers.

answer

Managerial accounting

question

The primary goal of managerial accounting is to provide information to

answer

internal decision-makers.

question

The primary goal of financial accounting is to provide information for

answer

governmental regulators. creditors. potential investors. D) all of the above.

question

Which of following statements is true?

answer

Management accounting focuses on relevant data.

question

Which statement is true?

answer

Management uses financial information to analyze costs. Management uses financial information to plan internal operations. Management uses reports created for internal parties. D) All of the above are true.

question

Which of the following statements is false?

answer

Financial accounting provides sufficient information for managers to effectively plan and control operations.

question

Which of the following statements is true?

answer

Managerial accounting reports provide detailed internal information.

question

Which of the following are the internal decision-makers of a company?

answer

Managers

question

Which one of the following reports is most likely to be required to be audited by an outside entity?

answer

Annual financial statements

question

Which of the following groups are external users of financial information?

answer

Customers of the company Potential investors of the company Vendors of the company D) All of the above

question

A company's budget information is most likely to be used by which of the following groups?

answer

managers

question

________ are a company's decision makers.

answer

managers

question

________ are owners of a company.

answer

shareholders

question

External parties receive information about past performance from

answer

financial accounting reports

question

Internal parties receive information about past performance from

answer

managerial accounting reports

question

What position is typically responsible for financial accounting, managerial accounting, and tax reporting?

answer

controller

question

Despite the proliferation of technology, managerial accountants are still needed to provide professional judgment in which of the following areas?

answer

Recording non-routine transactions Adjusting the financial records Designing computer information systems D) All of the about activities require professional judgment

question

The IMA issues which of the following certifications?

answer

CMA

question

A CFO would have all of the following responsibilities except

answer

investing in new production equipment.

question

Which of the following positions typically manages the daily operations of a company?

answer

the CEO

question

Oversight and strategy formulation and guidance for a large corporation are typically provided by which of the following positions?

answer

The Board of Directors

question

To whom would the vice-president of operations typically directly report?

answer

the COO

question

The COO is responsible for managing which of the following aspect(s) of the company?

answer

Research and development, production, and distribution

question

Which of the following positions report to the audit committee of the Board of Directors?

answer

The internal audit department and the independent CPA firm

question

Which of the following positions is primarily responsible for raising capital and investing funds?

answer

the treasurer

question

What factor has changed the way that we now view managerial accountants?

answer

technology

question

Which of the following tasks are performed by management accountants?

answer

Help design information systems Provide decision support Ensure financial records are correct D) All of the above

question

Managerial accountants may be responsible for

answer

providing decision support. communicating results. analyzing data. D) all of the above.

question

Managerial accountants are required to possess which of the following skills?

answer

Analytical skills Oral and written communication skills The ability to work on a team D) All of the above

question

The ________ is a subgroup of the Board of Directors.

answer

audit committee

question

Which person or group is not an employee of the corporation?

answer

A member of the audit committee

question

Which person is hired directly by the board of directors to manage the daily operations of the company?

answer

The CEO

question

According to the textbook, managerial accountants often work on

answer

cross-functional teams.

question

A company's Board of Directors meets

answer

periodically, as needs dictate.

question

Companies listed on the New York Stock Exchange (NYSE) are required to have an internal audit function by

answer

The NYSE.

question

The person who is directly responsible for all financial functions is the

answer

CFO

question

The person who is directly responsible for the company's operations, such as research and development, production and distribution is the

answer

COO

question

To resolve ethical dilemmas, the IMA suggests that management accountants should first

answer

follow their company's established policies for reporting unethical behavior.

question

Which of the following is not one of the IMA's overarching ethical principles?

answer

creativity

question

The standards in the IMA Statement of Ethical Professional Practice include

answer

Competence, Confidentiality, Integrity, and Credibility

question

All of the following are overarching principles in the IMA Statement of Ethical Professional Practice except

answer

integrity

question

The standards of the IMA Statement of Ethical Professional Practice include which of the following?

answer

integrity

question

Preparing financial statements in accordance with GAAP is an example of

answer

competence

question

Communicating information fairly and objectively is an example of which ethical standard?

answer

credibility

question

Performing duties in accordance with relevant laws, regulations, and technical standards comprise the IMA professional ethics standard of

answer

competence

question

Inflating your expenses for a company-sponsored conference is a violation of what ethical standard?

answer

integrity

question

To ensure a profit in the current year a company ships out pre-ordered merchandise the last week of December, instead of in mid-January as the customer instructed. This early shipment could be a violation of which ethical standard?

answer

integrity

question

What ethical standard is being violated when you tell a friend that the company you work for is going to report lower than expected earnings next week?

answer

confidentiality

question

An accountant who does not understand "accrual accounting" fails which ethical standard?

answer

competence

question

What ethical standard would you violate if you take pens home from work for personal use?

answer

integrity

question

What is the name of the professional association for managerial accountants?

answer

Institute of Management Accountants

question

Which of the following certifications is issued by the IMA?

answer

CMA

question

Which of the following is an example of the IMA's competence standard?

answer

Provide decision support that is accurate, clear, concise and timely.

question

Which of the following is an example of the IMA's credibility standard?

answer

Communicate information fairly and objectively.

question

Which of the following is an example of the IMA's integrity standard?

answer

Abstain from engaging in or supporting any activity that might discredit the profession.

question

Which of the following is an example of the IMA's confidentiality standard?

answer

Keep information confidential, except when disclosure is legally required.

question

Which of the following is not one of the IMA's credibility standards?

answer

To disclose all relevant information To disclose deficiencies in internal control To communicate information fairly and objectively D) All of the above are part of IMA's credibility standard.

question

Which ethical standard is demonstrated when you attend a class to maintain your professional knowledge?

answer

competence

question

Not disclosing sensitive information is an example of which ethical standard?

answer

Confidentiality

question

Refusing gifts or favors that could be perceived to influence your actions is an example of which ethical standard?

answer

Refusing gifts or favors that could be perceived to influence your actions is an example of which ethical standard?

question

Accepting a job that you know can be better performed by someone else with the required skills would violate the ethical conduct standard of

answer

competency

question

It would be a violation of which ethical standard to withhold relevant information?

answer

Credibility

question

Failure to mitigate a conflict of interest would violate which ethical standard of conduct?

answer

integrity

question

A wave of accounting scandals around the turn of the 21st century prompted which of the following?

answer

SOX

question

Increased competition with foreign companies and the rise of the global marketplace is mainly due to which of the following?

answer

Decreased barriers to international trade

question

Which type of system integrates ALL of the company's departments, functions, and data?

answer

ERP System

question

According to the Sarbanes-Oxley Act, who is responsible for establishing and maintaining internal controls over financial reporting?

answer

The CEO and CFO

question

The Sarbanes-Oxley Act requires the CPA firm to rotate the audit partner off of the audit engagement every ________ year(s).

answer

five

question

Which of the following is not an advantage of an ERP system?

answer

Lower initial cost than traditional systems

question

The ability to meet the needs of the present without compromising the needs of the future is often referred to as

answer

sustainability

question

The "triple bottom line" focuses on these three factors that influence a firm's ability to survive and thrive in the long run:

answer

profit, people, planet

question

Under SOX, a CPA firm is permitted to perform which of the following services for an audit client with pre-approval from the client's audit committee?

answer

tax

question

According to SOX, a company's financial statements must be certified by the company's

answer

CFO and CEO

question

A requirement of SOX is that publicly traded companies must have which of the following assessed annually?

answer

Internal control system and financial reporting system

question

The SEC is considering the move to adopt IFRS for which types of companies?

answer

All U.S. publicly traded companies

question

IFRS stands for

answer

International Financial Reporting Standards.

question

XBRL stands for

answer

eXtensible Business Reporting Language.

question

In what year will XBRL be required for all publicly traded companies?

answer

2011

question

XBRL can best be described as a

answer

a tagging system for financial statement data.

question

Which of the following statements about XBRL is false?

answer

The US is the first country to mandate use of XBRL.

question

________ is the business philosophy and a strategy of manufacturing without waste.

answer

Lean thinking

question

Companies may adopt which of the following in an attempt to increase their competitive edge?

answer

TQM Green initiatives Lean thinking D) All of the above

question

Movements toward sustainability and corporate responsibility often

answer

result in increased demand for the company's product or service. include monetary support of local schools and charities. include green initiatives. D) All of the above are correct.

question

The Sarbanes-Oxley Act was enacted

answer

to prevent accounting scandals like Enron.

question

Which of the following was not a result of the Sarbanes-Oxley Act?

answer

The COO assumes financial statement responsibility.

question

The Sarbanes-Oxley Act requires companies to have their internal audit procedures assessed at least

answer

annually

question

The Sarbanes-Oxley Act allows for a maximum of ________ years of imprisonment for knowingly destroying or creating documents to obstruct any federal investigation.

answer

20

question

What is a business philosophy that focuses on providing customers with superior products and services?

answer

TQM

question

What is a system that requires suppliers to deliver materials at the exact time the materials are needed?

answer

JIT

question

ISO 9001:2008 is a(n)

answer

certification that a company complies with international quality standards.

question

Which of the following is a software system that integrates all of a company's departments?

answer

ERP

question

Companies that wish to demonstrate their commitment to international quality standards may become certified by what organization?

answer

ISO

question

Which of the following methods cuts throughput time?

answer

JIT

question

Which type of company utilizes managerial accounting?

answer

Service Manufacturers Retailers D) All of the above

question

CPA firms are permitted to provide which of the following services to audit clients?

answer

Tax preparation

question

The philosophy that centers on production as needed is known as

answer

JIT

question

What is the business philosophy of providing superior goods and services?

answer

TQM

question

What would a company need to conduct when considering whether to install an ERP system or not?

answer

cost-benefit analysis

question

Which of the following would have the least effect on a cost-benefit analysis?

answer

Constant prices

question

Which of the following is not used in a cost-benefit analysis?

answer

Book value of past investment in equipment

question

Torque Engine Company is considering opening a plant in China. It will cost $3,500,000 to set up the plant and $750,000 to train employees. An additional $100,000 will be spent to build relationships with the local suppliers. The company anticipates gross profit of $4,400,000 from this new plant. Do the benefits outweigh the costs or do the costs outweigh the benefits, and by how much?

answer

Benefits outweigh costs by $50,000.

question

Country Western Clothing Outfitters is considering investing in an inventory tracking system. It will have $10,000 in software costs and $8,000 in employee training costs. Computer hardware also needs to be upgraded for the system; the hardware upgrades are expected to be $12,000. The expected benefits from the inventory tracking system should be $28,000. Do the benefits outweigh the costs or do the costs outweigh the benefits, and by how much?

answer

Costs outweigh benefits by $2,000.

question

Pete's Cola Company is investigating the possibility of adopting a lean thinking philosophy throughout their organization. Estimated costs to set up the computer system are $1,650,000; training employees in lean operations is estimated to cost $175,000; and the general expenses of establishing the program are estimated at $315,000. The estimated value of the potential savings is $1,975,000. Do the benefits outweigh the costs or do the costs outweigh the benefits, and by how much?

answer

Costs outweigh benefits by $165,000.

question

Gilmore Corporation is investigating the possibility of adopting a lean thinking philosophy in its manufacturing facilities. The plant manager has done a cost-benefit analysis and has found that the costs of the lean production program exceed the benefits by $115,000. You analyze the situation and make some adjustments to the cost estimates. After doing your analysis, you find that costs still outweigh benefits by less than 5%. Which might be a sound course of action?

answer

Consider dropping the plan. Look for ways to lessen costs. Re-evaluate the value of benefits. D) All of the above should be considered.

question

Johnson Scooter Company is considering whether or not to expand into a new area of the US. They produce high-performance gas scooters with moderate gas mileage, but have developed a new battery technology that combines a small amount of electrical energy with the existing gas power. This new technology will significantly increase the fuel economy of their bikes. They will need to spend $5,075,000 to retrofit a building to incorporate the new fuel-saving technology. New worker training will cost $1,984,000. Other expenses involved in getting the new plant up and running amount to $332,000. The CEO anticipates that, with gas price increases, the profit potential of this expansion is $7,588,000. Do the benefits outweigh the costs or do the costs outweigh the benefits, and by how much?

answer

Sales from expansion $ 7,588,000 Less costs: Cost to retrofit a building $ (5,075,000) New worker training $ (1,984,000) Other plant expenses $ (332,000) Benefits outweigh costs by $ 197,000

question

what are the three responsibilities of managers

answer

planning, directing, controlling

question

identifying possible courses of action and choosing among them

answer

decision making

question

setting goals and objectives for the company and determining how to achieve them

answer

planning

question

the quantitative expression of a plan

answer

budgets

question

overseeing the company's day to day operations

answer

directing

question

evaluating the results of business operations against the plan and making adjustments to keep the company pressing toward its goals

answer

controlling

question

managerial accounting is designed for _______ management. it is confidential information that is generally not shared with the public. there are no GAAP standards or audits required for managerial accounting.

answer

internal

question

managerial accounting focuses on the ____ rather than the past

answer

future

question

this states that management accountants have a responsibility to to provide decision support information that is accurate, clear, concise, and timely

answer

competence standard

question

this states that management accountants must abstain from activity that might discredit the profession

answer

integrity standard

question

the worlds largest association representing the accounting profession; together with the chartered institute of management accountants (CIMA) offers the chartered global management accountant (CGMA) designation

answer

American Institute of Certified Public Accountants (AICPA)

question

a subcommittee of the board of directors that is responsible for overseeing both the internal audit function and the annual financial statement audit by independent CPAs

answer

Audit Committee

question

the body elected by shareholders to oversee the company

answer

Board of directors

question

quantitative expression of a plan that helps managers coordinate and implement the plan

answer

budget

question

a professional certification issued by the IMA to designate expertise in the areas of managerial accounting, economics, and business finance

answer

certified management accountant (CMA)

question

a designation available to qualifying american institute of certified public

answer

chartered global management accounted (CGMA)

question

the position hired by the board of directors to oversee the company on a daily basis

answer

Chief executive officer (CEO)

question

the position responsible for all of the company's financial concerns

answer

chief financial officer (CFO)

question

the position responsible for overseeing the company's operations

answer

chief operating officer (COO)

question

what are the ethical principles that man accts. should obey

answer

honesty, objectivity, fairness, responsibility

question

what are the ethical standards that man accts. should obey

answer

competence, integrity, confidentiality, credibility

question

large companies use ____ systems that an integrate all of a company's worldwide functions, departments, and data.

answer

ERP (enterprise resource planning

question

the position responsible for general financial accounting, managerial accounting and tax reporting

answer

controller

question

one of management's primary responsibilities; evaluating the results of business operations against the plan and making adjustments to keep the company pressing toward its goal

answer

controlling

question

corporate teams whose members represent various functions of the organization such as R&D, design, production, marketing, distribution and customer service

answer

cross-functional teams

question

weighing costs against benefits to help make decisions

answer

cost-benefit analysis

question

identifying possible courses of action and choosing among them

answer

decision making

question

one of management's primary responsibilities; running the company on a day-to-day basis

answer

directing

question

a philosophy and business strategy of operating without waste

answer

Lean thinking

question

a process resulting in a report that describes how a company is creating value over time using financial, manufactured, intellectual, human, social and natural capital

answer

integrated reporting

question

three pillars of sustainability

answer

social (people), environmental (planet) and economic (profits)

question

the ability to meet the needs of the present without compromising the ability of future generations to meet their own needs

answer

sustainability

question

a congressional act that enhances internal control and financial reporting requirements and establishes new regulatory requirements for publicly traded companies and their independent auditors. CEO and CFO assume responsibility for the company's financial statements, internal l control system, and procedures for financial reporting

answer

sarbanes-oxely act (SOX)

question

which companies ned to comply with SOX

answer

publicly traded companies

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