69 test bank for introduction to management accounting 15th edition

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69 Test Bank for Introduction to Management

Accounting 15th Edition

Multiple Choice Questions-Page 1

Which of the following is NOT a government regulation that

influences accounting systems?

1 A Sarbanes-Oxley Act

2 B Foreign Corrupt Practices Act

3 C tax rules promulgated by the Internal Revenue Service

4 D International Financial Reporting Standards

The various stages through which a product passes are called the

1 A value chain

2 B product life cycle

3 C performance plan

4 D product performance plan

Performance reports

1 A are quantitative expressions of plans for action

2 B provide feedback by comparing actual results with planned results

3 C ignore areas that are presumed to be running smoothly

4 D provide information to enable managers to select a value chain function to emphasize

information involves routine reports that compare actual results to predicted results

1 A Budgets

2 B Attention directing

3 C Scorekeeping

4 D Problem solving

The Foreign Corrupt Practices Act requires

1 A companies to accept bribes from officials in foreign countries

2 B all publicly held companies to follow the act only if they conduct business outside the United States

3 C companies to maintain their accounting records in reasonable detail and accuracy

4 D companies to prepare a separate report on their system of internal control

A(n is a review to determine whether the policies and procedures specified by top management have been implemented

1 A management audit

2 B internal audit

3 C internal control

4 D internal accounting control

Variances

1 A are quantitative expressions of plans of action

2 B ignore areas that are problem areas

3 C are deviations from a plan

4 D ignore areas that are presumed to be running smoothly

What statement about management accounting is FALSE?

1 A Management accounting is the process of identifying, measuring,

accumulating, analyzing, preparing, interpreting and communicating

information

2 B Management accounting helps managers fulfill organizational objectives

3 C Management accounting is used by managerial accountants to make strategic and operational decisions

4 D Management accounting produces information for managers in an

organization

is (are the primary consideration in choosing among accounting systems and methods

1 A Simplicity

2 B Behavioral implications

3 C The cost-benefit balance

4 D Simplicity and behavioral implications

is the field that produces information for managers within

an organization

1 A Financial accounting

2 B Management accounting

3 C Financial auditing

4 D External auditing

Which of the following statements is FALSE?

1 A Management accounting allows accountants to plan and control

operations

2 B Management accountants play a role in supporting all the functions of the value chain

3 C Management accounting allows an accountant to learn about

interrelationships between different functional areas

4 D Management accounting helps an accountant understand how information can improve decisions in different functional areas

is (are the accounting system's effect on the behavior and the decisions of managers

1 A Simplicity

2 B Behavioral implications

3 C The cost-benefit balance

4 D The code of ethics

The primary users of management accounting information are

1 A bankers

2 B governmental regulatory bodies

3 C managers in organizations

4 D managerial accountants

Generally Accepted Accounting Principles are most closely

connected to

1 A management accounting

2 B financial accounting

3 C internal auditing

4 D management accounting

Which of the following items should be considered by managers when designing accounting systems?

1 A cost-benefit balances

2 B behavioral implications

3 C cost-benefit balances and behavioral implications

4 D none of the above

information helps managers focus on operating

problems, imperfections, inefficiencies and opportunities

1 A Scorekeeping

2 B Attention directing

3 C Problem solving

4 D Performance

Product life cycles

1 A do not pertain to services offered to customers

2 B are the same length for all products

3 C are not important when predicting revenues from a product

4 D must be considered to effectively plan and control production of goods or services

Distribution is the function of the value chain that involves

1 A the mechanism by which a company delivers products or services to the customer

2 B the manner by which individuals or groups learn about the value and features of products or services

3 C the support activities provided to the customer

4 D none of the above

is the classification, accumulation, and reporting of data that help users understand and evaluate organizational

performance

1 A Scorekeeping

2 B Attention directing

3 C Problem solving

4 D Cost accounting

During the product development stage of the product life cycle, companies typically experience

1 A revenues and no costs

2 B costs and no revenues

3 C both costs and revenues

4 D neither costs nor revenues

The detailed design and engineering of products, services or

processes is called the function in the value chain

1 A research and development

2 B design of products, services or processes

3 C engineering of products, services or processes

4 D production

Management-by-exception means that managers should

1 A concentrate on areas that deviate from the plan

2 B in the absence of other evidence, presume that areas that conform with plans are running smoothly

3 C A and B

4 D none of the above

Problem solving information would NOT be used in this situation

1 A decision to make or buy parts for a manufactured product

2 B decision to replace equipment

3 C decision to add or drop a division

4 D evaluating the operating performance of a segment in the current year

What type of information is used in making nonroutine decisions, such as the decision to replace a traditional assembly line with fully automated robots?

1 A scorekeeping information

2 B attention directing information

3 C problem solving information

4 D auditing information

The function of the value chain that provides support activities to the customer is called

1 A marketing

2 B distribution

3 C customer service

4 D consumer relations

Which stage of the product life cycle has a stable sales level?

1 A product development stage

2 B introduction to market stage

3 C mature market stage

4 D phase-out of product stage

Marketing is the function of the value chain that involves

1 A the mechanism by which a company delivers products or services to the customer

2 B the manner by which individuals or groups learn about the value and

features of products or services

3 C selling activities and delivery activities

4 D selling activities and customer service

Which of the following activities would NOT be called

scorekeeping?

1 A estimating the cost of moving the corporate headquarters to another city

2 B preparing a schedule of depreciation expense for trucks for the current year

3 C preparing a schedule of sales for the current year

4 D preparing a schedule of plant assets at the end of the current year

When comparing management accounting and financial accounting, which of the following statements is FALSE?

1 A Management accounting has a future orientation whereas financial

accounting has a past orientation

2 B Management accounting prepares detailed reports whereas financial accounting prepares summary reports

3 C Management accountants are constrained by the principles of reporting promulgated by the Institute of Management Accountants whereas financial accountants are constrained by Generally Accepted Accounting Principles

4 D Behavioral considerations are of primary importance in management accounting, but not in financial accounting

A budget

1 A is a quantitative expression of a plan of action

2 B provides feedback by comparing actual results with planned results

3 C includes deviations from planned results

4 D ignores areas that are presumed to be running smoothly

When does a company earn the majority of revenue for a product that goes through the product life cycle?

1 A phase-out of product and introduction to market stages

2 B introduction to market and mature market stages

3 C product development and mature market stages

4 D mature market and phase-out of product stages

One advantage of the management-by-exception approach is that it

1 A frees managers from needless concern over operations that adhere to plans

2 B allows managers to ignore aspects of the business outside their area of expertise

3 C allows managers to ignore day-to-day operations

4 D allows managers to ignore problem situations

is the field of accounting that develops information for external parties such as stockholders, suppliers, banks and

governmental regulatory bodies

1 A Auditing

2 B Internal auditing

3 C Management accounting

4 D Financial accounting

Which of the following products have a product life cycle of a few months?

1 A fashion clothing

2 B automobiles

3 C airplanes

4 D refrigerators

Investigating the reasons for the variances on a department's performance report is an example of

1 A scorekeeping

2 B attention directing

3 C problem solving

4 D auditing

Research and development is the function of a value chain that involves

1 A the detailed design and engineering of products, services or processes

2 B the generation of ideas related to new products, services or processes

3 C the generation of ideas related to new products or services

4 D the detailed design and engineering of new processes

69 Free Test Bank for Introduction to Management Accounting 15th Edition by Horngren Multiple Choice Questions-Page 2

According to the Financial Executive, which of the following

situations create pressures for unethical behavior?

1 A emphasis on long-term results

2 B upward trends in the economy

3 C ignoring small lapses in ethical behavior

4 D rising stock prices

Which is NOT a service organization?

1 A Rainbow Dry Cleaners

2 B Law Firm of Cannon and Dunfy

3 C Shoreeast Real Estate Company

4 D Irwin Publishing Company

Which credential is associated with independent auditors?

1 A CMA

2 B CPA

3 C CFP

4 D IMA

Which of the following is a major factor causing changes in

management accounting today?

1 A decreased global competition

2 B advances in technology

3 C shift to manufacturing-based economy

4 D expansion of the value chain

The IMA's ethical standard for integrity includes all of the following EXCEPT

1 A each member has a responsibility to mitigate actual conflicts of interest

2 B each member has a responsibility to refrain from engaging in any conduct that would prejudice carrying out duties ethically

3 C each member has a responsibility to abstain from engaging in or

supporting any activity that would discredit the profession

4 D each member has a responsibility to monitor subordinates' activities to ensure compliance with the ethical standard

All service organizations are similar in that

1 A there is very little labor

2 B output is difficult to measure

3 C major inputs and outputs can be stored

4 D they are capital intensive

You are a management accountant in a large company You have observed unethical behavior by your immediate supervisor In accordance with the guidelines offered by the IMA, which of the following courses of action should NOT be taken?

1 A Follow the organization's established policies on the resolution of ethical conflict

2 B Discuss the issue with your immediate supervisor

3 C Consult your own attorney

4 D Initiate a confidential discussion with an IMA Ethics Counselor

According to the Financial Executives Institute, a function of the controller is

1 A investments

2 B short-term financing

3 C provision of capital

4 D reporting and interpreting

A telephone hotline is established for customers to call with

questions about a new electronic device This is an example of the function in the

1 A marketing; value chain

2 B distribution; value chain

3 C customer service; value chain

4 D marketing; product life cycle

The is mainly concerned with the company's operating matters whereas the is mainly concerned with the

company's financial matters

1 A treasurer; controller

2 B controller; treasurer

3 C managerial accountant; financial accountant

4 D chief executive officer; chief financial officer

According to the Statement of Ethical Professional Practice drafted

by the IMA, the standard of integrity states that each member has a responsibility to

1 A communicate information fairly and objectively

2 B mitigate actual conflicts of interest

3 C recognize and communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity

4 D disclose delays or deficiencies in information

Here is a statement from the Statement of Ethical Professional Practice drafted by the Institute of Management Accountants: "Each member has a responsibility to perform professional duties in

accordance with relevant laws, regulations and technical

standards." This statement comes from the standard

1 A credibility

2 B confidentiality

3 C competence

4 D professional responsibility

Dell Inc buys electronic components for laptop computers from Intel using the Internet This is an example of a(n

1 A A2B transaction

2 B B2B transaction

3 C B2C transaction

4 D C2B transaction

The largest U.S association of professional accountants whose major interest is management accounting is the

1 A American Institute of Certified Public Accountants

2 B American Institute of Certified Management Accountants

3 C Institute of Management Accountants

4 D American Institute of Management Accountants

At a clothing manufacturer, which department head has line

authority?

1 A the head of the receiving department

2 B the head of the shipping department

3 C the head of the clothing assembly department

4 D the head of the factory maintenance department

Advertising is an example of the function of the value chain

1 A distribution

2 B selling

3 C marketing

4 D promotion

An example of a staff department at a clothing manufacturer is the

1 A pressing department

2 B cutting department

3 C sewing department

4 D maintenance department

What do Certified Management Accountants and Certified Public Accountants have in common?

1 A Both groups are licensed to practice by state licensing agencies

2 B Both groups follow codes of conduct

3 C Both groups prepare information for stockholders and creditors

4 D Both groups rely heavily on other fields such as economics and behavioral science for analytical tools

This is a statement from the IMA's Statement of Ethical

Professional Practice: "Each member has a responsibility to