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Chapter 1 - Introduction to Managerial Accounting
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 prepare external reports for investors, creditors, government agencies, and other outside users.
b.
To provide information for costing of services, products, and other objects of interest to management.
c.
To provide information for planning, controlling, evaluating and continuous improvement.
d.
To provide information for decision making.
Chapter 1 - Introduction to Managerial Accounting
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.
The decision to eliminate an unprofitable segment of an organization.
c.
The decision to outsource an organization's payroll processing.
d.
All of these are correct
40. Developing a company strategy for responding to anticipated new markets is an example of
Chapter 1 - Introduction to Managerial Accounting
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.
d.
all of these.
42. The primary objective of managerial accounting is
a.
to provide stockholders and potential investors with useful information for decision making.
b.
to provide banks and other creditors with information useful in making credit decisions.
c.
to provide management with information useful for planning and control of operations.
d.
to provide the Internal Revenue Service with information about taxable income.
43. Managerial accounting
a.
is primarily for external users.
b.
has no mandatory rules.
c.
provides information based on historical information.
d.
must adhere to GAAP.
Chapter 1 - Introduction to Managerial Accounting
44. Managerial accounting reports are prepared
a.
according to GAAP guidelines.
b.
to meet the needs of decision makers within the firm.
c.
for external users.
d.
all of these are correct
45. Financial accounting
a.
is concerned with the information about the firm as a whole.
b.
has to adhere to GAAP policies.
c.
focuses on external users.
d.
all of these are correct
Chapter 1 - Introduction to Managerial Accounting
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. Total quality management emphasizes
a.
zero defects.
Chapter 1 - Introduction to Managerial Accounting
b.
continuous improvement.
c.
elimination of waste.
d.
all of these are correct.
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.
Chapter 1 - Introduction to Managerial Accounting
49. Which of the following would normally occupy a line position?
a.
staff accountant
b.
accounting manager
c.
vice-president of marketing
d.
treasurer
50. Which of the following would normally occupy a staff position?
a.
assembly worker
b.
cost accounting manager
c.
factory manager
d.
all of these
Chapter 1 - Introduction to Managerial Accounting
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
52. The controller of an organization participates in
a.
planning.
b.
controlling.
c.
decision making.
d.
all of these are correct
Chapter 1 - Introduction to Managerial Accounting
53. The objective of profit maximization
a.
should be the only goal of an organization.
b.
is an objective of financial accounting but not managerial accounting.
c.
should be achieved through legal and ethical means.
d.
should outweigh the goal of product quality.
54. The standards of ethical conduct for managerial accountants include
a.
competence and performance.
b.
integrity and respect for others.
c.
confidentiality, confidence, integrity, and observance.
d.
competence, confidentiality, integrity, and credibility.
Chapter 1 - Introduction to Managerial Accounting
55. Which of the following areas is not emphasized on the CMA examination?
a.
external auditing and business law
b.
economics, finance, and management
c.
decision analysis and information systems
d.
financial accounting and reporting
Chapter 1 - Introduction to Managerial Accounting
56. Accountants that have a Certificate in Public Accounting (CPA):
a.
are the only accountants permitted to serve as external auditors.
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.
Chapter 1 - Introduction to Managerial Accounting
58. Describe the major differences between managerial accounting and financial accounting.
Chapter 1 - Introduction to Managerial Accounting
59. Discuss in detail the three uses of managerial accounting information.
60. The Institute of Management Accountants (IMA) established ethical standards for accountants known as the Statement
of Ethical Professional Practice. Briefly describe the four standards.
Chapter 1 - Introduction to Managerial Accounting
61. Briefly describe activity-based costing (ABC), value chain, lean accounting and enterprise risk management (ERM).
Chapter 1 - Introduction to Managerial Accounting
62. List the different types of certifications that can be obtained by an accountant.
Chapter 1 - Introduction to Managerial Accounting
63. Describe the provisions of the Sarbanes-Oxley Act of 2002.
64. You have been working as a staff accountant at Sanborn Industries for three months. Mr. Jones, the accounting
manager as well as your boss, has informed you that he has decided to change vendors for the company’s office supplies.
He notifies you that your company will now be utilizing the store owned by his best friend. Mr. Jones is hopeful that this
will bring in a significant profit for his friend’s business possibly preventing the closing of his store. You receive the first
invoice from that store and realize that the prices are nearly double the amount that the company was paying when using a
large retail chain.
What should you do about the situation?
Chapter 1 - Introduction to Managerial Accounting
