Deck 1: Introduction to Managerial Accounting

Question 1

Planning involves which of the following activities?

A) Setting goals and objectives for the company
B) Overseeing the company's day-to-day operations
C) Evaluating the results of operations
D) Getting feedback on results

Answer 1

A

Question 2

Making adjustments to keep the company moving forward is related to the management responsibility of controlling.

Answer 2

True

Question 3

Budgets are the quantitative expression of management's plans.

Answer 3

True

Question 4

When management compares the budget to actual results, which of the following is being fulfilled?

A) Directing
B) Controlling
C) Decision-making
D) Planning

Question 5

Comparing actual results to budgets is an example of the management function of

A) controlling.
B) decision-making.
C) directing.
D) planning.

Question 6

Budgets are the way that managers can express their

A) plans.
B) decision-making.
C) control.
D) hiring practices.

Question 7

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

Question 8

Which of the following management responsibilities are being fulfilled when management uses feedback to take corrective action on the budgets?

A) Directing and planning
B) Planning and decision-making
C) Controlling and decision-making
D) Planning and controlling

Question 9

Evaluating the results of business operations against a plan and then making adjustments to that plan is called budgeting.

Question 10

Management accounting

A) helps managers make decisions.
B) is useful for external and internal users.
C) creates technical reports that require external audit for verification.
D) is the same as cost accounting.

Question 11

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

Question 12

Overseeing the day-to-day operations of a company is an example of the management function of

A) controlling.
B) decision-making.
C) directing.
D) planning.

Question 13

Using hourly sales reports to determine the level of staffing needed to service customers fulfills which of management's four primary responsibilities?

A) Directing, planning, and decision-making
B) Directing, controlling, and planning
C) Controlling, planning, and decision-making
D) Analyzing, directing, and planning

Question 14

Evaluating results against the plan is an example of the management function of

A) controlling.
B) decision-making.
C) directing.
D) planning.

Question 15

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

A) controlling, planning, and decision-making.
B) directing, controlling, and planning.
C) directing, planning, and decision-making.
D) controlling, directing, and planning.

Question 16

The four primary responsibilities of managers are planning, directing, controlling, and decision making.

Question 17

Which one of the following manager responsibilities encompasses the other three?

A) Decision-making
B) Feedback
C) Planning
D) Controlling

Question 18

Preparing budgets is an example of the management function of

A) controlling.
B) decision-making.
C) directing.
D) planning.

Question 19

Managerial accounting gathers, summarizes, and reports the cost and revenue data relevant to decisions.

Question 20

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

Question 21

The budgetary control function may include evaluating the difference

A) between current operating costs and last year's operating costs.
B) between budgeted amounts and actual results.
C) between the original budget and the final adjusted budget.
D) between the historical cost and the current cost.

Question 22

Match the following:

A) Controlling
B) Directing
C) Decision making
D) Planning
1) Setting goals and objectives.
2) The process in which management engages while it plans directs and controls operations.
3) Evaluating results of business operations.
4) Determining how to achieve company goals.
5) Overseeing the company's day to day operations.

Question 23

International Financial Reporting Standards (IFRS) must be followed when managerial accounting reports are prepared.

Question 24

Managerial accounting reports are always prepared on a quarterly and annual basis.

Question 25

The primary users of managerial accounting information are internal users such as managers.

Question 26

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

Question 27

Which of the following statements is TRUE about managerial accounting information?

A) It is prepared annually and quarterly.
B) It is audited.
C) It emphasizes relevance.
D) It must be prepared in conformity with generally accepted accounting principles (GAAP).

Question 28

Which of the following types of accounting is designed to meet the needs of decision-makers inside a company?

A) Audit accounting
B) Financial accounting
C) Managerial accounting
D) Tax accounting

Question 29

Managerial accounting information emphasizes relevance, more than reliability and objectivity.

Question 30

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

Question 31

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

Question 32

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

A) Plant managers
B) Current shareholders
C) Sales territory managers
D) CEO

Question 33

Employee behaviour is one of the factors that must be considered when designing the managerial accounting control system.

Question 34

The person MOST likely to use ONLY financial accounting information would be the

A) bank loan officer.
B) plant manager.
C) vice president of plant operations.
D) product manager.

Question 35

What are the four primary responsibilities of managers as described in Chapter 1? Give an example of each type of responsibility.

Question 36

Management accounting requires independent audits of the firm's books.

Question 37

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

Question 38

Management accounting focuses on

A) external reporting.
B) internal reporting.
C) tax preparation.
D) auditing.

Question 39

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

Question 40

The primary goal of managerial accounting is to provide information to

A) shareholders.
B) creditors.
C) internal decision-makers.
D) both shareholders and creditors.

Question 41

Which of the following is TRUE?

A) Managerial accounting reports are audited by professional accountants.
B) Managerial accounting reports provide detailed internal information.
C) Managerial accounting reports aid potential investors.
D) Managerial accounting reports must follow GAAP.

Question 42

Which of following is TRUE?

A) Management accounting focuses on historical transactions.
B) Financial accounting uses the cash basis for recording transactions.
C) Financial accounting focuses on future data.
D) Management accounting focuses on relevant data.

Question 43

Which of the following statements is FALSE?

A) Financial accounting provides sufficient information for managers to effectively plan and control operations.
B) Financial accounting reports help creditors make decisions.
C) Financial accounting helps investors make decisions.
D) Financial accounting provides external reports.

Question 44

The CFO of a company is responsible for the day-to-day running of the company.

Question 45

Which of the following reports must be audited by an outside agency?

A) Annual financial statements
B) Monthly financial statements
C) Annual financial budgets
D) Budgets

Question 46

The internal audit department reports directly to the subcommittee of the board of directors called the audit committee.

Question 47

Financial accounting

A) focuses on the future and includes activities such as preparing next year's operating budget.
B) must comply with IFRS/ASPE.
C) reports include detailed information on the various operating segments of the business such as product lines or departments.
D) is prepared for the use of department heads and other employees.

Question 48

Is financial accounting or managerial accounting more useful to a plant (factory) manager? Explain your answer.

Question 49

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

Question 50

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

Question 51

Information for external parties about past performance is provided by

A) budget reports.
B) financial accounting reports.
C) managerial accounting reports.
D) planning reports.

Question 52

Describe management accounting and financial accounting.

Question 53

Which of the following groups are most likely to use a company's budget information?

A) Managers
B) Customers
C) Creditors
D) Suppliers

Question 54

In most companies, managerial accountants no longer perform routine mechanical accounting tasks.

Question 55

The treasurer and the controller report directly to the CFO.

Question 56

In what way do managers benefit from the use of a management information system?

A) Data can be entered at numerous input terminals within the organization.
B) The managers would not be completely responsible for the information that is entered into the database system.
C) The managers could combine or adjust data to answer the questions from particular internal and external users.
D) Managers can store old documents in hard copy.

Question 57

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

A) Vendors
B) Customers
C) Managers
D) Shareholders

Question 58

Discuss at least four differences between financial accounting and managerial accounting.

Question 59

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

Question 60

Owners of a company are its

A) creditors.
B) customers.
C) managers.
D) shareholders.

Question 61

Which of the following statements is true regarding the changing role of management accountants?

A) Management accountants are no longer involved with recording transactions.
B) Because of the increased emphasis on analyzing business operations, management accountants have become key organizational decision makers.
C) The increasing scope of the regulatory environment has changed the focus of management accountants.
D) Technology has changed the role of management accountants.

Question 62

Who typically provides oversight for large corporations?

A) Stockholders
B) The CEO
C) The Board of Directors
D) The company president

Question 63

Which person is hired directly by the board of directors to run the company?

A) The Treasurer
B) The CEO
C) The CFO
D) The COO

Question 64

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

A) The treasurer and controller
B) The CFO and internal audit department
C) The internal audit department and the independent CPA firm
D) The CFO and the independent CPA firm

Question 65

Which would be a subgroup of the Board of Directors?

A) Audit committee
B) Financial committee
C) Managerial committee
D) Stockholders' committee

Question 66

Management accountants only advise cross-functional teams because teams consist of employees from R&D, design, production, marketing, distribution, and customer service.

Question 67

Describe the position of the CFO, the treasurer, and the controller within the organization. Describe the main functions of the treasurer and the controller.

Question 68

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

Question 69

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

Question 70

Why is it important that all managerial accountants adhere to professional and ethical standards as codified by the profession?

Question 71

The person or position who is directly responsible for all financial concerns is the

A) CEO.
B) CFO.
C) COO.
D) Treasurer.

Question 72

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

Question 73

Managerial accountants often work on teams called

A) audit teams.
B) cross-functional teams.
C) multi-functional teams.
D) work groups.

Question 74

A company's Board of Directors meets

A) annually.
B) monthly.
C) periodically, and at least annually.
D) quarterly.

Question 75

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

A) Internal controls
B) The annual audit
C) Financial, managerial, and tax accounting
D) Research and development, production, and distribution

Question 76

Who is primarily responsible for raising capital and investing funds?

A) The CEO
B) The CFO
C) The COO
D) The Treasurer

Question 77

What has been the key factor in changing the role of managerial accountants?

A) Stricter audit standards
B) Stricter GAAP standards
C) Technology
D) Government licensing

Question 78

The vice-president of operations directly reports to which person(s)?

A) The CFO
B) The COO
C) The CEO
D) The Board of Directors

Question 79

The Toronto Stock Exchange (TSE/TSX) requires that members of a board of directors for a listed company have

A) members experienced in business.
B) two independent members.
C) membership that represents the diversity of Canada.
D) only stockholders as members.

Question 80

Who typically manages the daily operations of a company?

A) Stockholders
B) The controller
C) The company's board of directors
D) The CEO