Deck 1: Introduction to Managerial Accounting

Question 1

Virtually all managerial accounting practices were developed to assist managers in maximizing profits.

Answer 1

True

Question 2

A cost accountant would normally occupy a staff position within an organization.

Answer 2

True

Question 3

The managerial activity of monitoring a plan's implementation and taking corrective action as needed is referred to as decision making.

Answer 3

False

Question 4

The value chain is the set of activities required to design, develop, produce, market, and deliver products and service to customers.

Question 5

Positions that have direct responsibility for the basic objectives of an organization are referred to as line positions.

Question 6

Managerial Accounting is designed primarily for internal users.

Question 7

The process of choosing among competing alternatives is called ________________________.

Question 8

The belief that each member of a group bears no responsibility for the well-being of other members is a common principle underlying all ethical systems.

Question 9

______________________________ is the provision of accounting information for a company's internal users.

Question 10

Management accounting information is only used by manufacturing organizations.

Question 11

Financial accounting is governed by GAAP.

Question 12

The process of choosing among competing alternatives is decision making.

Question 13

The four emphasized areas of the CMA examination reflect the needs of managerial accounting and highlights that managerial accounting has more of an interdisciplinary flavor than other areas of accounting.

Question 14

Managerial accounting information is not important for not-for-profit organizations.

Question 15

Time is not a crucial element in all phases of the value chain.

Question 16

The detailed formulation of action to achieve a particular end is the management activity called_____________.

Question 17

Excellent customer service is an example of a value-added activity.

Question 18

Managerial accounting has its emphasis on the future.

Question 19

Activity-based costing is a less detailed approach to determining the cost of goods and services than traditional cost accounting.

Question 20

The purpose of the Certificate in Public Accounting is to provide minimal professional qualification for external auditors.

Question 21

_____________________________ is the continual search for ways to increase the overall efficiency and productivity of activities by reducing waste, increasing quality and managing costs.

Question 22

The________________supervises all accounting functions and reports directly to the general manager and chief operating officer (COO).

Question 23

__________________________________________ is a management philosophy in which manufacturers strive to create an environment that will enable workers to manufacture perfect (zero-defect) products.

Question 24

The managerial activity of monitoring a plan's implementation and taking corrective action as needed is referred to as ______________.

Question 25

To promote ethical behavior by managers and employees, organizations commonly establish a__________________________.

Question 26

_________ is a crucial element in all phases of the value chain.

Question 27

In June 2002, Congress passed the____________________________________ in response to financial scandals such as Enron.

Question 28

The _____________________ is the set of activities required to design, develop, produce, market and deliver products and services as well as provide support services to customers.

Question 29

________________________ involves choosing actions that are right, proper, and just.

Question 30

__________________________ organizes costs according to the value chain and collects both financial and nonfinancial information.

Question 31

Developing a company strategy for responding to anticipated new markets is an example of

A) planning.
B) controlling.
C) decision making.
D) all of these are correct.

Question 32

Positions that are supportive in nature and have only indirect responsibility for an organization's basic objectives are called ________________________.

Question 33

Only a _________________________ is permitted to serve as an external auditor.

Question 34

____________________ is primarily concerned with producing information for external users.

Question 35

The managerial accounting system produces information for __________ users.

Question 36

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.

Question 37

Managerial accounting strongly emphasizes providing information about _________________.

Question 38

A __________________________ has passed a comprehensive examination designed to ensure technical competence and has two years of experience.

Question 39

The ____________________ is responsible for the finance function.

Question 40

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

Question 41

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.

Question 42

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.

Question 43

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

Question 44

The Institute of Management Accountants (IMA) established ethical standards for accountants known as the Statement of Ethical Professional Practice. Briefly describe the four standards.

Question 45

Which of the following would normally occupy a line position?

A) staff accountant
B) accounting manager
C) vice-president of marketing
D) treasurer

Question 46

Describe the major differences between managerial accounting and financial accounting.

Question 47

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

Question 48

Total quality management emphasizes

A) zero defects.
B) continuous improvement.
C) elimination of waste.
D) all of these are correct.

Question 49

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

Question 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

Question 51

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.

Question 52

Discuss in detail the three uses of managerial accounting information.

Question 53

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

Question 54

Investigating production variances and adjusting the production process is an example of

A) planning.
B) controlling.
C) decision making.
D) all of these.

Question 55

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.

Question 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.

Question 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.

Question 58

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

Question 59

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.

Question 60

The controller of an organization participates in

A) planning.
B) controlling.
C) decision making.
D) all of these are correct

Question 61

Briefly describe activity-based costing (ABC), value chain, lean accounting and enterprise risk management (ERM).

Question 62

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?

Question 63

List the different types of certifications that can be obtained by an accountant.

Question 64

Describe the provisions of the Sarbanes-Oxley Act of 2002.