CHAPTER 1 c.

reports information that has occurred in the

Hulguin, Alyssa Isabel D. past that is verifiable and reliable.
BSA - 2 d. provides information that is generally available
only on a quarterly or annual basis.
1. Which of the following statements is false?
a. Cost accounting measures and reports 5. The person MOST likely to use management
short-term, long-term financial, and nonfinancial accounting information is a(n)
information. a. banker evaluating a credit application.
b. Cost management provides information that b. shareholder evaluating a stock investment.
helps increase value for customers. c. governmental taxing authority.
C. All strategies should be evaluated regarding d. assembly department supervisor.
the resources, and capabilities of the company.
c. A good cost accounting system is narrowly 6. Which of the following description refers to
focused on a continuous reduction of costs. management accounting information?
a. It is verifiable and reliable.
1. Which of the following statements is correct? b. It is driven by rules.
a. The best-designed strategies are valuable c. It is prepared for shareholders.
whether or not they are effectively implemented. d. It provides reasonable and timely estimates.
b. To take advantage of changing market
opportunities, the annual budget should be strictly 7. Which of the following groups would be LEAST
enforced. likely to receive detailed management accounting
D. Linking rewards to performance is a major reports?
deterrent to good management performance. a. Stockholders
c. An important strategic decision is making the b. Sales representatives
correct investments in productive assets. c. Production supervisors
d. Managers
2. All of the following statements are true except
a. A budget is a tool used to plan and express 8. Management accounting information includes
strategy. а. tabulated results of customer satisfaction
b. Financial accounting reports financial and surveys.
nonfinancial information that helps managers c. the cost of producing a product.
implement company strategies. B. the percentage of units produced that are
C. Feedback links planning and control. defective.
D. Control includes deciding what feedback to d. all of the above.
provide that will help with future decision making.
9. Which of the following types of information are
3. All of the following statements are false except used in management accounting?
a. Attention-directing activities should focus on a. Financial information
cost-reduction opportunities, and not on b. Nonfinancial information
value-adding opportunities. c. Information focused on the long term
b. For strategic decisions, scorekeeping is the d. All of the above
most prominent role played by management
accounting. 10. Management accounting includes
C. A budget may be used as a planning tool, but a. implementing strategies.
not as a control tool. b. developing budgets.
D. Management accountants often are c. preparing special studies and forecasts.
simultaneously doing problem-solving, d. all of the above.
scorekeeping, and attention-directing activities.
11. Financial accounting is concerned PRIMARILY
4. Management accounting with
A. focuses on estimating future revenues, costs, a. external reporting to investors, creditors, and
and other measures to forecast activities and their government authorities.
results. b. provides information about the b. cost planning and cost controls.
company as a whole. C. profitability analysis.
c. providing information for strategic and tactical a. Usefulness
decisions. b. Timeliness
D. Relative accuracy
c. Compliance with external reporting
12. Financial accounting provides a historical. requirements
perspective, whereas management accounting
emphasizes 20. Strategic management can be defined as the
a. the future. development of sustainable:
b. past transactions. a. chain of command
D. a current perspective. b. competitive position
c. reports to shareholders. C. cash flow
c. business entity
13. Strategy specifies
a. how an organization matches its own 21. The control area of management is primarily
capabilities with the opportunities in the concerned with:
marketplace. a. standards and variances
b. standard procedures to ensure quality b. monitoring and evaluation
products. c. structure and discipline
c. incremental changes for improved d. organization and implementation
performance.
d. the demand created for products and services. 22. Cost management has moved from a
traditional role of product costing and operational
14. Control includes control to a broader strategic focus, which places
a. implementing planning decisions. an emphasis on:
b. evaluating performance. a. non-competitive pricing
c. providing feedback to help with future decision b. domestic marketing
making. D. short-term thinking
d. all of the above. d. integrative thinking

15. Linking rewards to performance 23. Dramatic improvements in communication

a. helps to motivate managers. have resulted in increasing global competition,
b. allows companies to charge premium prices. which has required firms to:
C. should only be based on financial information. a. completely replace existing cost information
d. does all of the above. systems.
b. expand existing cost information systems.
17. Control measures should C. modify existing cost information systems to
a. be set and not changed until the next budget handle more data.
cycle. c. develop cost management systems to help
b. be flexible to allow for employees who are firms be more competitive.
slackers.
c. be kept confidential from employees so that 24. All the information the manager needs to
competitors don't have an opportunity to gain a effectively manage the firm or not-for-profit
competitive advantage. organization is termed:
d. be linked by feedback to planning. a. planning information.
b. cost management information.
18. For control decisions, emphasis is placed on D. financial information.
the of management accounting. c. • life cycle information.
a. problem-solving
b. scorekeeping 25. Those who develop cost management
c. attention-directing information are most often referred to as:
d. both (b) and (c) role(s) a. cost accountants.
b. operational accountants.
19. Which of the following terms does not C. management accountants.
represent a main focus of cost management c. industrial accountants.
information?
 b. helps managers improve their decisions.
c. is accurate.
26. The main focus of cost management d. is relevant and reported annually.
information must be:
a. reliability and usefulness. 3. The Institute of Management Accountants (IMA)
b. timeliness and reliability. a. is a professional organization of management
D. objectivity and reliability. accountants.
c. usefulness and timeliness. B. is a professional organization of financial
accountants.
27. The development of a sustainable competitive C. issues standards for management accounting.
position - understanding what specific activities D. issues standards for financial accounting.
are needed for the firm to succeed, and making
the appropriate strategic choices - is termed: 4. Line management includes
a. strategic cost management. a. manufacturing managers.
b. strategic management. b. human-resource managers.
C. total quality management. D. information-technology managers.
d. activity-based management. c. management-accounting managers.

28. The development of cost information to 5. Staff management includes

facilitate the principal management function is a. manufacturing managers.
termed: b. human-resource managers.
a. life cycle costing. C. purchasing managers.
b. activity-based costing. c. distribution managers.
D. total quality management.
c. strategic cost management. 6. Responsibility of a CFO include all EXCEPT
a. providing financial reports to shareholders.
29. The ability to deliver a product or service b. managing short-term and long-term financing.
faster than the competition is termed: C. investing in new equipment.
a. just-in-time. d. Preparing tax returns
b. statistical quality control.
C. flexible manufacturing. 7. The Standards of Ethical Conduct for
c. speed-to-market. management accountants include concepts
related to
30. A set of policies, procedures and approaches a. competence, performance, integrity, and
to business to produce long-term success is reporting.
termed a: b. competence, confidentiality, integrity and
a. critical success factor. objectivity.
b. competitive position. D. experience, integrity, reporting, and objectivity.
c. mission. d. none of the above as ethical issues do not affect
d. strategy. management accountants.

CHAPTER 2 8. Ethical challenges for management accountants

1. ___________means reporting and interpreting include
information that helps managers to focus on a. whether to accept gifts from suppliers, knowing
operating problems, imperfections, inefficiencies, it is an effort to indirectly influence decisions.
and opportunities. b. whether to report unfavorable department
a. Scorekeeping information that may result in unfavorable
b. Attention directing consequences for a friend.
D. Problem solving C. whether to file a tax return this year.
c. None of the above c. both (a) and (b).

2. Management accounting is considered 9. If a financial manager/management accountant

successful when it has a problem in identifying unethical behavior or
a. helps creditors evaluate the company's resolving an ethical conflict, the first action (she
performance. should normally take is to
a. consult the board of directors. D. refraining from improper use of inside
b. discuss the problem with his/her immediate information.
superior. d. maintenance of an appropriate level of
c. notify the appropriate law enforcement. professional competence.
d. resign from the company.
15. A financial manager/management accountant
10. Katrina is a financial manager who has discovers a problem that could mislead users of
discovered that her company is violating the firm's financial data and has informed his/her
environmental regulations. If her immediate immediate superior. (She should report the
superior is involved, her appropriate action is to circumstances to the audit committee and/or the
a. do nothing since she has a duty of loyalty to the board of directors only if
organization. a. the immediate superior, who reports to the
b. consult the audit committee. chief executive officer, knows about the situation
D. present the matter to the next higher but refuses to correct it.
managerial level. b. the immediate superior assures the financial
c. confront her immediate superior. manager/management accountant that the
problem will be resolved.
11. If financial manager/management accountant C. the immediate superior reports the situation to
discovers unethical conduct in his/her his/her superior.
organization and fails to act, (she will be in D. the immediate superior, the firm's chief
violation of which ethical standard(s)? executive officer, knows about the situation but
a. "Actively or passively subvert the attainment of refuses to correct it.
the organization's legitimate and ethical
objectives." 16. In which situation is a financial
b. "Communicate unfavorable as well as favorable manager/management accountant permitted to
information." communicate confidential information to
c. "Condone the commission of such acts by individuals or authorities outside the firm?
others within their organizations." a. There is an ethical conflict and the board has
d. All of the answers are correct. refused to take action.
b. Such communication is legally prescribed.
12. Corporate social responsibility is c. The financial manager/management accountant
a. effectively enforced through the controls knowingly communicates the information
envisioned by classical economics. indirectly through a subordinate.
b. the obligation to shareholders to earn a profit. d. An officer at the financial
C. the duty to embrace service to the public manager/management accountant's bank has
interest. requested information on a transaction that could
D. the obligation to serve long-term, influence the firm's stock price.
organizational interests.
17. Which ethical standard is most clearly violated
13. A common argument against corporate if a financial manager/management accountant
involvement in socially responsible behavior is that knows of a problem that could mislead users but
a. it encourages government intrusion in decision does nothing about it?
making. a. Competence
c. as a legal person, a corporation, is accountable b. Legality
for its conduct. c. Objectivity
C. it creates goodwill. d. Confidentiality
d. in a competitive market, such behavior incurs
costs that place the company at a disadvantage. 18. produces information that helps workers,
managers, and executives in organizations make
14. Integrity is an ethical requirement for all better decisions.
financial managers/management accountants. a. Governmental accounting
One aspect of integrity requires b. Management accounting
а. performance of professional duties in C. Auditing
accordance with applicable laws. c. Financial accounting
c. avoidance of conflict of interest.
19. is the recognition and evaluation of business 26. Which of the following is a basic feature of a
transactions and other economic events for managerial accounting system?
appropriate accounting action. A. external audience
a. Identification b. reports are current and future oriented
b. Analysis B. objective data only
c. Communication c. reports on the entire organization
d. Evaluating
27. Which of the following is NOT a basic feature
20. is the quantification of business transactions of a managerial accounting system?
or other economic events that have occurred or a. financial measures only
forecasts of those that may оссиг. b. subjective information
а. Accumulation c. internal audience
c. External reporting d. informs local decision and actions
d. Measurement
d. Internal reporting 28. Which of the following is a basic feature of a
managerial accounting system?
21. is a determination of the reasons for the a. The scope tends to be highly aggregate.
reported activity and its relationship with other b. There are no regulations governing the reports.
economic events and circumstances. c. The reports are generally delayed and historical.
a. Analysis d. The audience tends to be stockholders,
b. Measurement creditors and tax authorities.
c. Evaluation
d. Accumulation 29. Which of the following groups would be
LEAST likely to receive detailed management
22. ________ includes strategic, tactical and accounting reports?
operating aspects. A. management accountants
a. Controlling B. scientists and engineers
b. Communication C. stockholders
D. Planning D. managers
c. Evaluating
30. indicate whether the organization is creating
23. judges implications of historical and expected long-term value and profitability.
events and helps to choose the optimum course of A. Strategic information
action. B. ROI
a. Controlling C. Net income
b. Communication c. Critical success factors
C. Planning
c. Evaluating 31. ________ is when a firm compares itself with the
best practice of competitors or other comparable
24. Which of the following is a basic feature of a organizations.
financial accounting system? a. Process improvement
a. Internal audience b. Benchmarking
b. Historical data D. Employee empowerment
D. Subjective information c. Total quality philosophy
c. Disaggregate information
32. Which of the following is NOT a function of a
25. Which of the following is NOT a basic feature. management accounting system?
of a financial accounting system? a. operating control
a. objective information b. product and customer costing
b. reports on past performance C. management control
c. future oriented reports d. financial reporting
d. highly aggregated data
33. Which of the following functions provides c. delay action and work with respected leaders in
feedback information about the efficiency of tasks the organization.
performed? d. delay action and hope the problem goes away.
a. operating control
b. product and customer costing 39. The elements of an ethical control system
c. management control include the following EXCEPT
d. financial reporting a. a reward system for turning in those who
violate the ethical code.
34. Which of the following functions provides b. a statement of the organization's values and
information on the performance of managers and code of ethics.
operating units? C. an ongoing internal audit of the ethical control
a. operating control system.
b. product and customer costing c. a statement of the employee's ethical
D. management control responsibilities.
c. financial reporting
40. Certified Management Accountants are
35. Which of the following is NOT a role of required to adhere to the following ethical
management accounting information in operating standards, EXCEPT
control? a. competence.
a. to provide feedback information about quality b. ingenuity.
b. to provide feedback information about D. integrity.
timeliness c. objectivity.
C. to provide feedback information about the
efficiency of tasks performed 41. A study of organization that are among the
c. to provide performance measures for best in the world at performing a particular task
decentralized organizational units a. Business process
b. Benchmarking
36. Which of the following is NOT a role of C. Control
management accounting information in product c. Feedback
and customer costing?
a. to measure the cost of resources used to 42. An activity that consumes resources or takes
produce a service time out that does not add value for which
b. to assess the profitability of the organization's customers are willing to pay
services by linking resources generated A. Non-value added activity
c. to provide feedback information about the B. Value-added activity
quality, timeliness, and efficiency of tasks c. Process re-engineering
performed d. Total quality management
d. to assess customer profitability for a particular
segment 43. Accounting and other reports that help
managers monitor performance and focus on
37. An organization develops a code of ethics problems and/or opportunities that might
because otherwise go unnoticed
a. it is required by law. a. Feedback
b. the Chief Executive Officer demands it. b. Performance report
D. it wishes to reduce ethical conflicts by avoiding C. Financial accounting
ambiguity or misunderstandings. D. Managerial accounting
c. it wishes to punish those whose ethical
standards are different from its own.

38. If an individual faces a conflict between the

organization's stated and practiced values experts
recommend that
a. the individual resign immediately and call the
media.
b. the individual call the media.