Test bank for Managerial Accounting Chapter 1 - 14 for HIGH SCORING GRADES

Chapter 01 Managerial Accounting and the Business Environment Multiple Choice Questions 1. Day-to-day decision making is most common to which of the following activities managers are expected to carry on in organizat ...

Chapter 01 Managerial Accounting and the Business Environment Multiple Choice Questions 1. Day-to-day decision making is most common to which of the following activities managers are expected to carry on in organizations? A. Strategy formulation. B. Directing and motivating. C. Planning. D. Controlling. Bloom's Level: Understand Difficulty: Medium Learning Objective: 1 2. Identifying alternatives and selecting the best among them is part of which of the following activities which managers carry on in organizations? A. Controlling. B. Directing. C. Planning. D. Motivating. Bloom's Level: Understand Difficulty: Medium Learning Objective: 1 3. Budgeting is part of which of the following activities managers perform in organizations? A. Controlling. B. Directing. C. Planning. D. Motivating. Bloom's Level: Understand Difficulty: Easy Learning Objective: 1 hzzledChapter 01 - Managerial Accounting and the Business Environment 1-2 4. Obtaining feedback is generally identified most directly with which of these functions of management? A. Planning B. Directing and motivating C. Controlling D. Decision making Bloom's Level: Understand Difficulty: Easy Learning Objective: 1 5. Which of the following best describes the role of a staff position in an organization? A. It relates directly to the carrying out of the basic objectives of the organization. B. It is supportive in nature, providing service and assistance to other parts of the organization. C. It is superior in authority to a line position. D. Both A and C. Bloom's Level: Remember Difficulty: Easy Learning Objective: 3 6. Which of the following positions does the controller occupy in an organization? A. A line position. B. A staff position. C. Neither a line nor a staff position, since the accounting department must be independent. D. Both a line and a staff position. Bloom's Level: Remember Difficulty: Easy Learning Objective: 3 hzzledChapter 01 - Managerial Accounting and the Business Environment 1-3 7. Which of the following best describes the function of managerial accounting within an organization? A. It has its primary emphasis on the future. B. It is required by regulatory bodies such as the Ontario Securities Commission. C. It focuses on the organization as a whole, rather than on the organization's segments. D. It places more emphasis on precision of data than financial accounting does. Bloom's Level: Remember Difficulty: Easy Learning Objective: 2 8. Upon which of the following does managerial accounting place considerable weight? A. Generally accepted accounting principles. B. The financial history of the entity. C. Ensuring that all transactions are properly recorded. D. Detailed segment reports about departments, products, and customers. Bloom's Level: Understand Difficulty: Easy Learning Objective: 2 9. For internal uses, managers are more concerned with receiving information that achieves which of the following standards? A. Completely objective and verifiable. B. Completely accurate and precise. C. Relevant, flexible, and timely. D. Relevant, completely accurate, and precise. Bloom's Level: Understand Difficulty: Easy Learning Objective: 2 hzzledChapter 01 - Managerial Accounting and the Business Environment 1-4 10. What would be an example of a performance report? A. An income statement reporting actual results for the past month. B. An income statement showing the amounts budgeted for the past month. C. A balance sheet showing the actual financial position at the end of the past month. D. A production report showing budgeted and actual production for the past month. Bloom's Level: Understand Difficulty: Hard Learning Objective: 1 11. Which of the following is NOT one of the three major customer value propositions discussed in the text? A. customer intimacy B. discount pricing C. operational excellence D. product leadership Bloom's Level: Understand Difficulty: Medium Learning Objective: 1 12. Which of the following is NOT one of the five steps in the lean thinking model discussed in the text? A. Continuously pursue perfection in the business process. B. Identify value in specific products/services. C. Implement an enterprise system. D. Create a pull system that responds to customer orders. Bloom's Level: Understand Difficulty: Easy Learning Objective: 5 hzzledChapter 01 - Managerial Accounting and the Business Environment 1-5 13. One consequence of a change from a push to a properly implemented pull production system can be which of the following? A. an increase in work in process inventories. B. an extremely difficult cultural change due to enforced idleness when demand falls below production capacity. C. an increased mismatch between what is produced and what is demanded by customers. D. an increase in raw materials inventories. Bloom's Level: Understand Difficulty: Hard Learning Objective: 5 14. Which one of the following is NOT a characteristic of a pull production system? A. Inventories are reduced to a minimum by purchasing raw materials and producing units only as needed to meet consumer demand. B. Raw materials are released to production far in advance of being needed to ensure no interruptions in work flows due to shortages of raw materials. C. Products are completed just in time to be shipped to customers. D. Manufactured parts are completed just in time to be assembled into products. Bloom's Level: Understand Difficulty: Medium Learning Objective: 5 15. Which of the following is NOT one of the five steps in the framework used to guide Six Sigma improvement efforts? A. Analyze. B. Control. C. Digitize. D. Measure. Bloom's Level: Understand Difficulty: Medium Learning Objective: 5 hzzledChapter 01 - Managerial Accounting and the Business Environment 1-6 16. All three major professional accounting groups in Canada require their members to undertake professional development and/or continuing education. This practice is intended to directly satisfy which of these rules of ethical conduct? A. Integrity. B. Objectivity. C. Competence. D. Confidentiality. Bloom's Level: Understand Difficulty: Medium Learning Objective: 4 17. Samantha Galloway is a managerial accountant in the accounting department of Mustang Industries, Inc. Samantha has just discovered evidence that some of the corporation's marketing managers have been wrongfully inflating their expense reports in order to obtain higher reimbursements from the firm. According to the Institute of Management Accountants' Standards of Ethical Conduct, what should Samantha do upon discovering this evidence? A. Notify the controller. B. Notify the marketing managers involved. C. Notify the president of the corporation. D. Ignore the evidence because she is not part of the Marketing Department. Bloom's Level: Apply Difficulty: Hard Learning Objective: 4 18. Both financial and managerial accounting rely on the same underlying financial data but there are major differences. Managerial Accounting: A. Emphasizes financial consequences of past activities. B. Emphasizes precision. C. Emphasizes relevance. D. Must follow GAAP. Bloom's Level: Understand Difficulty: Medium Learning Objective: 2 hzzledChapter 01 - Managerial Accounting and the Business Environment 1-7 19. After careful planning, Jammu Manufacturing Corporation has decided to switch to a just-in-time inventory system as a component of the lean thinking model. At the beginning of this switch, Jammu has 30 units of product in inventory. Jammu has 2,000 labour hours available in the first month of this switch. These hours could produce 500 units of product. Customer demand for this first month is 400 units. If just-in-time principles are correctly followed, how many units should Jammu plan to produce in the first month of the switch? A. 370 B. 400 C. 430 D. 470 Bloom's Level: Analyze Difficulty: Hard Learning Objective: 5 20. Which of the following facets of the lean thinking model is often called just-in-time production? A. Identify value in specific products/services B. Identify the business process that delivers value C. Create a pull system that responds to customer orders D. Organize work arrangements around the flow of the business process Bloom's Level: Understand Difficulty: Medium Learning Objective: 5 21. Which of the following groups should be the focal point of a company's strategy? A. Employees B. Board of directors C. Shareholders D. Target customers Bloom's Level: Understand Difficulty: Hard Learning Objective: 1 hzzledChapter 01 - Managerial Accounting and the Business Environment 1-8 22. A business plan is usually formalized by means of which of the following management activities? A. Strategic planning B. Directing C. Motivating D. Controlling Bloom's Level: Remember Difficulty: Easy Learning Objective: 1 23. Which of the following types of information contained in a business plan is LEAST likely to be found in the accounting records of a typical company? A. Financial B. Competitors C. Internal D. Non-financial Bloom's Level: Understand Difficulty: Medium Learning Objective: 1 24. Which of the following is the stakeholder group whose interests are to be directly and formally protected by effective corporate governance? A. Customers B. Creditors C. Shareholders D. Suppliers Bloom's Level: Remember Difficulty: Medium Learning Objective: 4 hzzledChapter 01 - Managerial Accounting and the Business Environment 1-9 True / False Questions 25. An important part of planning is to identify alternatives and then to select from among the alternatives the one that best meets the organization's objectives. TRUE Bloom's Level: Remember Difficulty: Medium Learning Objective: 1 26. The controller occupies a staff position in an organization. TRUE Bloom's Level: Remember Difficulty: Easy Learning Objective: 3 27. Persons occupying staff positions provide support and assistance to other parts of the organization. TRUE Bloom's Level: Remember Difficulty: Medium Learning Objective: 3 28. Informal relationships and channels of communication often develop that do not appear on the organization chart. TRUE Bloom's Level: Remember Difficulty: Easy Learning Objective: 3 hzzledChapter 01 - Managerial Accounting and the Business Environment 1-10 29. Managerial accounting places less emphasis on precision and more emphasis on timeliness of data than financial accounting does. TRUE Bloom's Level: Remember Difficulty: Medium Learning Objective: 2 30. Managerial accounting is not governed by generally accepted accounting principles (GAAP). TRUE Bloom's Level: Remember Difficulty: Easy Learning Objective: 2 31. In general, accounting data serve both financial accounting and managerial accounting purposes. TRUE Bloom's Level: Understand Difficulty: Easy Learning Objective: 2 32. Top management make most of the decisions in decentralized organizations. FALSE Bloom's Level: Remember Difficulty: Easy Learning Objective: 3 hzzledChapter 01 - Managerial Accounting and the Business Environment 1-11 33. Codes of professional ethics regarding competence, confidentiality, integrity, and objectivity are more important for CAs and CGAs than CMAs. FALSE Bloom's Level: Remember Difficulty: Easy Learning Objective: 4 34. Business codes of ethics prescribe minimum acceptable behaviours for all employees except employees belonging to one of the three major professional accounting groups in Canada. FALSE Bloom's Level: Understand Difficulty: Medium Learning Objective: 4 35. Monetary data are given equal weight by both managerial accounting and financial accounting. FALSE