Deck 1: Introduction to Cost Accounting

Question 1

Line managers are directly responsible for achieving organizational goals.

Answer 1

True

Question 2

The learning and growth perspective of the balanced scorecard focuses on using an organization's intellectual capital to adapt to or influence customer needs and expectations.

Answer 2

True

Question 3

Managerial accounting is most concerned with addressing the needs of the firm as a whole.

Answer 3

False

Question 4

Mission statements typically remain unchanged throughout the life of an organization.

Question 5

An organization's strategy is the guiding force for its mission.

Question 6

Financial accounting is most concerned with meeting the needs of internal users.

Question 7

Financial accounting is most concerned with addressing the needs of the firm as a whole.

Question 8

Managerial accounting is most concerned with addressing the needs of individual departments of the firm.

Question 9

Managerial accounting is highly regulated by rules and regulations.

Question 10

The Sarbanes-Oxley Act of 2002 provides legal protection for individuals who report illegal organizational activities to appropriate persons or agencies.

Question 11

Line personnel give assistance to staff employees.

Question 12

Financial accounting is most concerned with addressing the needs of individual departments of the firm.

Question 13

Managerial accounting is most concerned with meeting the needs of internal users.

Question 14

Financial accounting is highly regulated by rules and regulations.

Question 15

Financial accounting is most concerned with meeting the needs of external users.

Question 16

The Foreign Corrupt Practices Act of 1977 provides legal protection for individuals who report illegal organizational activities to appropriate persons or agencies.

Question 17

Cost accounting serves as a bridge between financial and managerial accounting.

Question 18

Return on investment was used in the 1900's to evaluate business operations.

Question 19

Financial accounting is most concerned with meeting the needs of external users.

Question 20

An organization's strategy should reflect the organization's core competencies.

Question 21

The financial perspective of the balanced scorecard focuses on using an organization's intellectual capital to adapt to or influence customer needs and expectations.

Question 22

The learning and growth perspective of the balanced scorecard addresses stakeholder concerns about profitability and organizational growth.

Question 23

An organization's profitability is an example of a lag indicator.

Question 24

The customer value perspective of the balanced scorecard addresses the things that an organization needs to do well to meet customer needs and expectations.

Question 25

An organization's return on assets (ROA) is an example of a lead indicator.

Question 26

The financial perspective of the balanced scorecard addresses the things that an organization needs to do well to meet customer needs and expectations.

Question 27

The branch of accounting that is most concerned with addressing the needs of the firm as a whole is ____________________ accounting

Question 28

The learning and growth perspective of the balanced scorecard focuses on using an organization's intellectual capital to adapt to or influence customer needs and expectations.

Question 29

The internal business perspective of the balanced scorecard addresses stakeholder concerns about profitability and organizational growth.

Question 30

The branch of accounting that serves as a bridge between financial and managerial accounting is ____________________ accounting.

Question 31

The learning and growth perspective of the balanced scorecard addresses the things that an organization needs to do well to meet customer needs and expectations.

Question 32

The learning and growth perspective of the balanced scorecard addresses how well the organization is doing with regard to important customer criteria.

Question 33

The customer value perspective of the balanced scorecard addresses how well the organization is doing with regard to important customer criteria.

Question 34

The branch of accounting that is most concerned with addressing the needs of specific departments of the firm is ____________________ accounting

Question 35

The internal business perspective of the balanced scorecard addresses how well the organization is doing with regard to important customer criteria.

Question 36

The customer value perspective of the balanced scorecard addresses stakeholder concerns about profitability and organizational growth.

Question 37

The internal business perspective of the balanced scorecard addresses the things that an organization needs to do well to meet customer needs and expectations.

Question 38

The financial perspective of the balanced scorecard addresses stakeholder concerns about profitability and organizational growth.

Question 39

The financial perspective of the balanced scorecard addresses how well the organization is doing with regard to important customer criteria.

Question 40

The internal business perspective of the balanced scorecard focuses on using an organization's intellectual capital to adapt to or influence customer needs and expectations.

Question 41

Broadly speaking, cost accounting can be defined as a(n)

A) external reporting system that is based on activity-based costs.
B) system used for providing the government and creditors with information about a company's internal operations.
C) internal reporting system that provides product costing and other information used by managers in performing their functions.
D) internal reporting system needed by manufacturers to be in compliance with Cost Accounting Standards Board pronouncements.

Question 42

Data that reflects future financial and non-financial outcomes is referred to as ____________________ indicators.

Question 43

In comparing financial and management accounting, which of the following more accurately describes management accounting information?

A) historical, precise, useful
B) required, estimated, internal
C) budgeted, informative, adaptable
D) comparable, verifiable, monetary

Question 44

The balanced scorecard perspective that addresses things that an organization needs to do well to meet customer needs and expectations is the ______________________________ perspective.

Question 45

The expression of what an organization wishes to accomplish and how it will serve its customers is contained in the ______________________________.

Question 46

The way in which authority and responsibility are distributed in an organization is ___________________________________.

Question 47

Modern management accounting can be characterized by its

A) flexibility.
B) standardization.
C) complexity.
D) precision.

Question 48

The balanced scorecard perspective that addresses concerns about organizational growth is the ____________________ perspective.

Question 49

Which of the following statements about management or financial accounting is false?

A) Financial accounting must follow GAAP.
B) Management accounting is not subject to regulatory reporting standards.
C) Both management and financial accounting are subject to mandatory recordkeeping requirements.
D) Management accounting should be flexible.

Question 50

Management and financial accounting are used for which of the following purposes?

A) internal external
B) external internal
C) internal internal
D) external external

Question 51

The balanced scorecard perspective that focuses on using a firm's intellectual capital to adapt to customer needs through product or service innovations is the ______________________________ perspective.

Question 52

The ___________________________________ restates an organization's strategy into clear and objective performance measures.

Question 53

When an organization attempts to "adjust" its profits to meet a specific target, it is guilty of ______________________________.

Question 54

The balanced scorecard perspective that addresses how well the organization is meeting specific customer-based criteria is the ______________________________ perspective.

Question 55

Which of the following is not a valid method for determining product cost?

A) arbitrary assignment
B) direct measurement
C) systematic allocation
D) cost-benefit measurement

Question 56

The plan in which an organization indicates how it will fulfill its goals is referred to as a ____________________.

Question 57

Outcomes that have resulted from past actions are also referred to as ____________________ indicators.

Question 58

Management accounting

A) is more concerned with the future than is financial accounting.
B) is less concerned with segments of a company than is financial accounting.
C) is more constrained by rules and regulations than is financial accounting.
D) all of the above are true.

Question 59

A function or activity in which an organization seeks to excel above its competitors is a ______________________________.

Question 60

One major difference between financial and management accounting is that

A) financial accounting reports are prepared primarily for users external to the company.
B) management accounting is not under the jurisdiction of the Securities and Exchange Commission.
C) government regulations do not apply to management accounting.
D) all of the above are true.

Question 61

Which of the following topics is of more concern to management accounting than to cost accounting?

A) generally accepted accounting principles
B) inventory valuation
C) cost of goods sold valuation
D) impact of economic conditions on company operations

Question 62

Cost accounting is directed toward the needs of

A) regulatory agencies.
B) external users.
C) internal users.
D) stockholders.

Question 63

The Institute of Management Accountants issues

A) Statements on Accounting Research for Managers.
B) Statements on Management Accounting.
C) Statements on Managerial and Cost Accounting.
D) Cost Accounting Standards.

Question 64

Which of the following U.S. legislation relates to bribes being offered to foreign officials?

A) Racketeer Influenced and Corrupt Organizations Act
B) Foreign Illegal Activities Act
C) Foreign Corrupt Practices Act
D) Federal Bribery and Corrupt Practices Act

Question 65

Cost accounting standards

A) are legal standards set by the Institute of Management Accountants for use in all manufacturing and professional businesses.
B) are set by the Cost Accounting Standards Board and are legally binding on all manufacturers, but not service organizations.
C) do not exist except for those legal pronouncements for companies bidding or pricing cost-related contracts with the government.
D) are developed by the Cost Accounting Standards Board, issued by the Institute of Management Accountants, and are legally binding on CMAs.

Question 66

Cost and management accounting

A) require an entirely separate group of accounts than financial accounting uses.
B) focus solely on determining how much it costs to manufacture a product or provide a service.
C) provide product/service cost information as well as information for internal decision making.
D) are required for business recordkeeping as are financial and tax accounting.

Question 67

Financial accounting and cost accounting are both highly concerned with

A) preparing budgets.
B) determining product cost.
C) providing managers with information necessary for control purposes.
D) determining performance standards.

Question 68

Which ethical standard has been violated if an accountant fails to disclose relevant information pertaining to a financial statement?

A) Competence
B) Confidentiality
C) Integrity
D) Credibility

Question 69

Which ethical standard has been violated if an accountant fails to prepare financial statements according to industry standards?

A) Competence
B) Confidentiality
C) Integrity
D) Credibility

Question 70

Which of the following statements istrue?

A) Management accounting is a subset of cost accounting.
B) Cost accounting is a subset of both management and financial accounting.
C) Management accounting is a subset of both cost and financial accounting.
D) Financial accounting is a subset of cost accounting.

Question 71

The set of processes that convert inputs into services and products that consumers use is called

A) a core competency.
B) an operational plan.
C) the value chain.
D) the product life cycle.

Question 72

A managerial accountant who prepares clear reports and recommendations after analyzing relevant facts is exercising which of the following standards?

A) objectivity
B) integrity
C) competence
D) confidentiality

Question 73

A managerial accountant who communicates information objectively is exercising which of the following standards?

A) objectivity
B) integrity
C) competence
D) confidentiality

Question 74

Financial accounting

A) is primarily concerned with internal reporting.
B) is more concerned with verifiable, historical information than is cost accounting.
C) focuses on the parts of the organization rather than the whole.
D) is specifically directed at management decision-making needs.

Question 75

The Foreign Corrupt Practices Act is directed at

A) U.S. corporations operating overseas.
B) foreign businesses operating in the U.S.
C) all businesses dealing with U.S. consumers.
D) all U. S. businesses with operations in foreign countries.

Question 76

The ethical standards established for management accountants are in the areas of

A) competence, licensing, reporting, and education.
B) budgeting, cost allocation, product costing, and insider trading.
C) competence, confidentiality, integrity, and credibility.
D) disclosure, communication, decision making, and planning.

Question 77

Which of the following statements is false?

A) A primary purpose of cost accounting is to determine valuations needed for external financial statements.
B) A primary purpose of management accounting is to provide information to managers for use in planning, controlling, and decision making.
C) The act of converting production inputs into finished products or services necessitates cost accounting.
D) Two primary hallmarks of cost and management accounting are standardization of procedures and use of generally accepted accounting principles.

Question 78

Cost accounting is necessitated by

A) the high degree of conversion found in certain businesses.
B) external reporting requirements for manufacturing companies.
C) management's need to be aware of all production activities.
D) management's need for information to be used for planning and controlling activities.

Question 79

The organization whose primary function is to provide a means to share information among cost and management accountants in the United States is the

A) Internal Revenue Service.
B) American Institute of CPAs.
C) Institute of Management Accountants.
D) Institute of Certified Management Accountants.

Question 80

The Institute of Management Accountants' Code of Ethics

A) is a legally enforceable contract with all management accountants.
B) should be viewed as a goal for professional behavior.
C) is a legally enforceable contract with all CPAs.
D) provides ways to measure departures from ethical behavior.