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Trang 191 Test Bank for Managerial Accounting Tools for
Business Decision Making 3rd Canadian Edition by
Weygandt
Multiple Choice Questions
How could management information assist in motivating its
employees?
1 a Keeping track of quality improvements
2 b Showing the company’s percent of market share
3 c Showing statistics on plant safety
4 d All areas would benefit from providing internal management information
Which of the following statements about internal reports is true?
1 a Most internal reports are summarized rather than detailed
2 b Internal reports focus on general purpose needs of users
3 c The content of internal reports extends beyond the double-entry accountingsystem
4 d Internal reports are often very general
A company must inform readers of its annual report of:
1 a All changes in financial accounting policies
2 b Results of any overseas activities
3 c All changes in internal accounting information
4 b Changes to management’s bonus system
Managerial accounting information
1 a pertains to the entity as a whole and is highly aggregated
2 b must be prepared according to generally accepted accounting principles
3 c pertains to subunits of the entity and may be very detailed
4 d is prepared only once a year
The major reporting standard for management accounting is
Trang 21 a the Standards of Ethical Conduct for Practitioners of Management
Accounting and Financial Management
2 b the Sarbanes-Oxley Act of 2002
3 c relevance to decisions
4 d generally accepted accounting principles
Which of the following uses managerial accounting?
1 a Manufacturing and service entities, but not merchandising
2 b Profit-oriented businesses only
3 c Service, manufacturing, and merchandising entities
4 d Only manufacturing entities
The organization chart of a company shows:
1 a the interrelationships of activities within a company
2 b the delegation of authority within a company
3 c the delegation of responsibility within a company
4 d all of the above
What broad functions do the management of an organization
perform?
1 a Directing, manufacturing, and controlling
2 b Planning, directing, and controlling
3 c Planning, directing, and selling
4 d Planning, manufacturing and controlling
Which one of the following tasks would not be performed by a management accountant?
1 a Being concerned with the impact of cost and volume on profits
2 b Strategic cost management
3 c Assisting in budget planning
4 d Preparing reports primarily for external users
Which description identifies financial statements that are prepared for external users?
1 a External reports
Trang 31 a It includes performance evaluation by management.
2 b It is concerned mainly with operating a manufacturing segment
3 c It is performed only by the controller of a company
4 d It includes hiring and training employees
Which one of the following involves coordinating a company’s activities to produce a smooth-running operation?
1 a Monthly reports on activities to the Board of Directors
2 b Quarterly reporting to the Toronto Stock Exchange
3 c Specific purpose statements on services delivered
4 d Audited financial information in the annual report to shareholders
What activities and responsibilities are not associated with
Which one of the following describes internal reports?
1 a They are often audited by CAs
2 b They must be prepared according to GAAP
Trang 43 c They are aggregated.
4 d They are detailed
Managerial accounting is also called
1 a As they correspond to external financial reporting
2 b Never more than monthly
3 c According to the company’s business cycle
Trang 5Managerial accounting
1 a is concerned with costing products
2 b is governed by generally accepted accounting principles
3 c pertains to the entity as a whole and is highly aggregated
4 d places emphasis on special-purpose information
How often are internal managerial reports communicated?
2 b Have the Board of Directors agree to the information provided
3 c Establish clearly understood standards of performance
4 d All of the above are valid reasons
Which management function is a manager performing when
objectives are being established?
Trang 61 a Analyzing financial statements
2 b Setting goals and objectives for an entity
3 c Hiring the right people for a particular job
4 d Coordinating the accounting information system
Which of the following is not an internal user?
1 a Corporate officers
2 b Staff employees
3 c Stockholders
4 d Department manager
Which of the following represents two management functions?
1 a Regulating and directing
2 b Controlling and directing
3 c Controlling and auditing
4 d Auditing and planning
Which of the following is not part of managerial accounting?
1 a Determining whether planned goals are being met
2 b Reporting financial information to the shareholders
3 c Calculating product costs
4 d Controlling costs
91 Free Test Bank for Managerial Accounting Tools for Business Decision Making 3rd Canadian Edition by
Weygandt Multiple Choice Questions - Page 2
Many companies now manufacture products that are untouched by human hands What do they use to achieve this?
1 a Activity-based costing
2 b Computer-integrated manufacturing
3 c Enterprise resource planning systems
4 d Total quality management systems
Trang 7The Ontario Securities Commission introduced regulations
governing the composition and duties of audit committees, as well
as their members’ behaviour The new rules:
1 a are as robust as parallel rules required by the U.S Sarbanes-Oxley Act
2 b were adopted by all provincial and territorial securities regulators, except forBritish Columbia’s
3 c were introduced in conjunction with the Canadian Securities Administrators
4 d all of the above
Directing includes
1 a providing a framework for management to have criteria to terminate
employees when needed
2 b running a department under quality control standards universally accepted
3 c coordinating a company’s diverse activities and human resources to
produce a smooth-running operation
4 d developing a performance ranking system to give certain high performers good raises
A company acting ethically must adapt its external reports to any changes required:
1 a Instantly
2 b As it is appropriate for its business cycle
3 c As stipulated by the CICA
4 d If they are considered pertinent to its business activities
What term describes all activities associated with providing a
product or service?
1 a The manufacturing chain
2 b The product chain
3 c The supply chain
4 d The value chain
Choose the incorrect answer
1 a While generally not encouraged, lapses in ethical behaviour are irrelevant
to a company’s operating income
Trang 82 b Proper incentives need to be implemented to foster an ethical business environment.
3 c Manufacturing companies need to establish effective and realistic
production goals for their processes
4 d As a result of the Sarbanes-Oxley Act, companies now pay more attention
to the composition of the board of directors
Which of the following is not required to become a CMA?
1 a Completion of a university degree
2 b Candidates must pass an entrance exam into the CMA program
3 c Completion of a two-year strategic leadership program concurrently with gaining industry experience
4 d Completion of a national exit exam
Which of the following is true?
1 a Dissatisfied employees cite a decline in ethical behaviour is a result of a change in corporate culture
2 b Unethical corporate behaviour occurs only in the United States because of its capitalistic environment
3 c Unethical behaviour rarely causes a decline in investor confidence
4 d Unethical actions are reasonable in an environment wherein unreasonable budgets and targets have been set
Choose the correct statement
1 a CGA stands for Certified Generic Accountant
2 b CMA stands for Certified Managing Accountant
3 c CA stands for Chartered Accountant
4 d CPA stands for Certified Professional Accountant
What is “balanced” in the balanced scorecard approach?
1 a The number of products produced
2 b The emphasis on financial and non-financial performance measurements
3 c The amount of costs allocated to products
4 d The number of defects found on each product
Trang 9Some companies implement systems to reduce defects in finished products with the goal of achieving zero defects What are these systems called?
1 a Activity-based costing systems
2 b Enterprise resource planning systems
3 c Value chain systems
4 d Total quality management systems
In order to obtain more accurate product costs, how do many
companies allocate overhead?
1 a They use activity-based costing
2 b They use enterprise resource planning systems
3 c They use just-in-time methods
4 d They use total quality management systems
Which is the best definition of fraud?
1 a Unknowingly misrepresenting the facts
2 b Using business supplies for personal use
3 c The intentional misstatement of facts
4 d Misappropriating funds for personal financial gain
In Canada, which of the following professional accounting
organizations play an important role in promoting high standards of ethics in the accounting profession?
1 a The Society of Management Accountants of Canada
2 b The Canadian Institute of Chartered Accountants
3 c The Certified General Accountants Association of Canada
4 d All of the above
What is one primary benefit of an enterprise resource planning (ERP) system?
1 a It reduces inventory levels
2 b It permits companies to be more streamlined in production
3 c It replaces research and development in a company
Trang 104 d It requires an increased emphasis on product quality.
One of the advantages of a just in time inventory system is that it reduces inventory quantities Why is this considered to be a
benefit?
1 a Carrying inventory incurs storage costs, hence reducing inventory
quantities reduces costs
2 b Carrying large inventory raises the risk that customers will want an item thatyou do not have
3 c Carrying large inventory reduces the risk that customers will want an item that you do not have
4 d None of the above
In Canada the three different professional accounting designations are
1 a CPA, CA, CMA
2 b CMA, CGA, CPA
3 c CA, CMA, CGA
4 d MA, CPA, CA
The production manager at ABC Inc is responsible for formulating the budget for his department He will be evaluated on his ability to control costs After considerable thought, he arrives at his best estimate of costs, and then adds a further 10% to the projections Chances are he has inflated the cost projections because
1 a that is the way it has always been done
2 b conservative accounting practise requires that he not under report
expenses
3 c by overestimating expenses, it will make it easier for him to come in under budget and receive a favourable evaluation
4 d none of the above
Though their areas of specialization overlap, which of the three bodies of professionally designated accountants would be best to
Trang 11engage for implementation of an activity-based costing inventory system?
1 a Chartered Accountant
2 b Certified General Accountant
3 c Certified Public Accountant
4 d Certified Management Accountant
For what purpose is the theory of constraints used?
1 a To reduce product defects
2 b To balance performance measurement
3 c To identify and manage constraints that bottle-neck operations
4 d To reduce inventory levels
Which of the following statements is true?
1 a In recent decades, the Canadian economy in general has shifted towards
an emphasis on providing services rather than goods This trend has reduced the importance of managerial accounting
2 b In recent decades, the Canadian economy in general has shifted towards
an emphasis on providing goods rather than services This trend has reduced the importance of managerial accounting
3 c In recent decades, the Canadian economy in general has shifted towards
an emphasis on providing services rather than goods This trend has NOT reduced the importance of managerial accounting
4 d In recent decades, the Canadian economy in general has shifted towards
an emphasis on providing goods rather than services This trend has NOT reduced the importance of managerial accounting
Which statement is correct?
1 a All three of Canada’s professional accounting designations require
completion of a university degree in accounting
2 b All three of Canada’s professional accounting designations require
completion of some post-secondary education
3 c The educational requirements of the three professional accounting
designations focus on broadly-based accounting and financial management concepts
Trang 124 d Each of the three professional accounting bodies publishes its own
magazine to promote the interests of its membership
How have many companies significantly lowered inventory levels and costs?
1 a They use activity-based costing
2 b They utilize an enterprise resource planning system
3 c They have a just-in-time method
4 d They focus on a total quality management system
Which one of the following is not a main component of the value chain sequence?
1 a ERP
2 b Sales and marketing
3 c Production
4 d Customer relations
How do most companies manage their value chain?
1 a By using activity-based costing
2 b By creating enterprise resource planning systems
3 c Using an action plan
4 d Using total quality management systems
A company acting ethically must adapt its internal reports to any changes required:
1 a Instantly
2 b As it is appropriate for its business cycle
3 c As stipulated by the CICA
4 d If they are considered pertinent to its business activities
Which of the following is true?
1 a Managerial accountants are the employees who are principally responsible for ethical behaviour
2 b Investment losses have been precipitated by lax ethical standards
Trang 133 c Corporate fraud was found to have decreased between the years 1998 and 2003.
4 d Expense account abuse has been cited as one of the rarest forms of
unethical employee behaviour
Which one of the following managerial accounting approaches
attempts to allocate manufacturing overhead in a more meaningful fashion?
1 a Efficient resource procurement
2 b Earnings reporting policies
3 c Enterprise resource planning
4 d Effective resource procurement
Budgetary slack refers to?
1 a) Non motivated employees
2 b) Revising a business plan
3 c) Implementing an attainable budget
4 d) Underestimating a divisions performance
Trang 143 c used only by small organizations that cannot afford more expensive methods of evaluating their operations.
4 d focuses on non-financial measures in order to balance the many other financial reports companies use to evaluate their operations
Management accountants have a responsibility to:
1 a) solve any conflicts of interest
2 b) avoid conflicts of interest
3 c) hire a good mediator to solve conflicting issues
4 d) be the expert in resolving complex issues
Which of the following is a characteristic of financial accounting?
1 a) Periodicity of reporting is often generated on an as-needed basis
2 b) Focus is on estimates on future performance
3 c) Reports are general purpose and intended for external users
4 d) Information relevance is valued most
The Institute of Management Accountants (IMA) Code of Ethics includes standards covering
1 a) competence, confidentiality, integrity and credibility
2 b) confidentiality and integrity
3 c) independence, confidentiality, integrity and credibility
4 d) competence
Management accountants have a responsibility to:
1 a) communicate information fairly and objectively
2 b) hire good accountants to work with the company
3 c) disclose all information fairly
4 d) inform only the Chief Executive Officers for all managerial events
Which of the following are most likely primary users of managerial accounting?
1 a) tax authorities
2 b) officers and managers
3 c) creditors