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37. A __________________________ has passed a comprehensive examination designed to ensure technical competence
and has two years of experience.
38. Which of the following is not an objective of managerial accounting?
a. To produce information for external users, including investors, creditors, customers, suppliers, and government
agencies
b. To provide information for planning an organization’s action
c. To provide information for evaluating and continuously improving an organization’s actions
d. To provide information for effective decision making by the management of a company
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39. Which of the following is an example of the management activity referred to as planning?
a. Developing a strategy for disposing of hazardous waste
b. Tracking the cost of employee absence
c. Ensuring that the most competent candidates are recruited by a company
d. All of these are correct.
40. The detailed formulation of action to achieve a particular end is the management activity called:
a. planning.
b. controlling.
c. decision making.
d. all of these are correct.
41. Investigating production variances and adjusting the production process is an example of
a. planning.
b. controlling.
c. decision making.
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d. all of these.
42. The primary objective of managerial accounting is:
a. to produce information for external users, including investors, creditors, customers, suppliers, and government
agencies.
b. to produce financial information that must comply with various accounting standards.
c. to provide management with financial and nonfinancial information useful in planning, controlling, and decision
making.
d. to provide the Internal Revenue Service with financial and nonfinancial information about the taxable income of
an organization.
43. Which of the following is true of managerial accounting?
a. Managerial accounting is the provision of accounting information for a company’s external users.
b. Managerial accounting aims at providing information for controlling the organization’s actions.
c. Managerial accounting provides historical information.
d. Managerial accounting is subject to rules for external financial reporting.
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44. Managerial accounting reports are prepared:
a. to provide creditors with information useful in making credit decisions.
b. to meet the needs of decision makers within the firm.
c. to present historical information.
d. all of these are correct.
45. Which of the following statements is true of financial accounting?
a. Financial accounting is directed toward external users.
b. Financial accounting is subject to externally imposed rules.
c. Financial accounting is able to provide audited, objective financial information.
d. All of these are correct.
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46. Which of the following would not be an example of a value-added activity?
a. timely delivery of products
b. offering the customer a variety of products
c. storage of finished products
d. excellent customer service
47. Which of the following is true of total quality management?
a. It is a management philosophy in which manufacturers strive to create an environment that will enable workers to
manufacture zero-defect products.
b. It has replaced the acceptable quality attitudes of the past.
c. It emphasizes the elimination of waste.
d. All of these are correct.
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48. Activity-based costing
a. strives to create an environment that will enable workers to manufacture zero-defect products.
b. is the process of choosing among competing alternatives.
c. was established in response to financial scandals.
d. encourages process-value analysis.
49. Which of the following members of an organization would normally hold a line position?
a. A staff accountant
b. A purchasing manager
c. A general manager
d. A cost accountant
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50. Which of the following members of an organization would normally hold a staff position?
a. An assembly worker
b. An accounting manager
c. A customer service executive
d. All of these
51. Which of the following would occupy a line position in a hospital?
a. manager of the cafeteria
b. hospital administrator
c. chief of surgery
d. none of these
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52. The controller of an organization participates in
a. planning.
b. controlling.
c. decision making.
d. all of these are correct
53. Which of the following is true of profit maximization?
a. Profit maximization is achieved by considering the financial measures focused on only efficiency.
b. Profit maximization is an objective of financial accounting but not managerial accounting.
c. Profit maximization should be achieved through legal and ethical means.
d. Profit maximization results in maximum cost to and maximum production by a company.
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54. The standards of ethical conduct for managerial accountants include:
a. caring for others, intuition, and respect for others.
b. pursuit of excellence, credibility, and immediacy.
c. confidentiality, confidence, integrity, and observance.
d. competence, confidentiality, integrity, and credibility.
55. Which of the following areas is not emphasized by the Certified Management Accountant (CMA) examination?
a. External auditing and business law
b. Management reporting, analysis, and behavioral issues
c. Decision analysis and information systems
d. Economics, finance, and management
56. Accountants that have a Certificate in Public Accounting (CPA):
a. are the only accountants permitted to serve as external auditors.
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b. must pass a national examination and be licensed by the state in which they practice.
c. may be held responsible to provide assurance concerning the reliability of a firm’s financial statements.
d. all of these statements are true.
57. Persons in the United States who provide assurance service are designated as
a. Certified Public Accountants.
b. Certified Financial Accountants.
c. Chartered Accountants.
d. Certified Management Accountants.
58. Discuss in detail the three uses of managerial accounting information.
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59. Describe the major differences between managerial accounting and financial accounting.
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60. Briefly describe activity-based costing (ABC), value chain, lean accounting and enterprise risk management (ERM).
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61. The Institute of Management Accountants (IMA) established ethical standards for accountants known as the Statement
of Ethical Professional Practice. Briefly describe the four standards.
4. Credibility—communicate information fairly and objectively; disclose all relevant information that could reasonably be
expected to influence an intended user’s understanding of the reports, analyses or recommendations; disclose delays or
deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or
applicable law.
62. Describe the provisions of the Sarbanes-Oxley Act of 2002.
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63. List the different types of certifications that can be obtained by an accountant.