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1

1) Management accounting:
A) focuses on estimating future revenues, costs, and other measures to forecast activities and their results
B) provides information about the company as a whole
C) reports information that has occurred in the past that is verifiable and reliable
D) provides information that is generally available only on a quarterly or annual basis

A) focuses on estimating future revenues, costs, and other measures to forecast activities and their results

2

2) Managers use management accounting information to ________ strategy.
A) choose
B) communicate
C) implement
D) All of these answers are correct.

D) All of these answers are correct.

3

3) Financial accounting:
A) focuses on the future and includes activities such as preparing next year's operating budget
B) must comply with GAAP (generally accepted accounting principles)
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

B) must comply with GAAP (generally accepted accounting principles)

4

4) The person most likely to use ONLY financial accounting information is a:
A) factory shift supervisor
B) vice president of operations
C) current shareholder
D) department manager

C) current shareholder

5

5) Which of the following people is LEAST likely to use management accounting information?
A) the controller
B) a shareholder evaluating a stock investment
C) the treasurer
D) an assembly department supervisor

B) a shareholder evaluating a stock investment

6

6) Financial accounting provides the primary source of information for:
A) decision making in the finishing department
B) improving customer service
C) preparing the income statement for shareholders
D) planning next year's operating budget

C) preparing the income statement for shareholders

7

7) Which of the following descriptors refers to management accounting information?
A) It is verifiable and reliable.
B) It is driven by rules.
C) It is prepared for shareholders.
D) It provides reasonable and timely estimates.

D) It provides reasonable and timely estimates.

8

8) Which of the following statements refers to management accounting information?
A) There are no regulations governing the reports.
B) The reports are generally delayed and historical.
C) The audience tends to be stockholders, creditors, and tax authorities.
D) It primarily measures and records business transactions.

A) There are no regulations governing the reports.

9

9) Which of the following groups would be LEAST likely to receive detailed management accounting reports?
A) stockholders
B) sales representatives
C) production supervisors
D) managers

A) stockholders

10

10) Management accounting information includes:
A) tabulated results of customer satisfaction surveys
B) the cost of producing a product
C) the percentage of units produced that are defective
D) All of these answers are correct.

D) All of these answers are correct.

11

11) Cost accounting:
A) provides information on the efficiency of factory labor
B) provides information on the cost of servicing commercial customers
C) provides information on the performance of an operating division
D) All of these answers are correct.

D) All of these answers are correct.

12

12) Which of the following types of information are used in management accounting?
A) financial information
B) nonfinancial information
C) information focused on the long term
D) All of these answers are correct.

D) All of these answers are correct.

13

13) Modern cost accounting plays a role in:
A) planning new products
B) evaluating operational processes
C) controlling costs
D) All of these answers are correct.

D) All of these answers are correct.

14

14) A data warehouse or infobarn:
A) is reserved for exclusive use by the CFO
B) is primarily used for financial reporting purposes
C) stores information used by different managers for multiple purposes
D) gathers only nonfinancial information

C) stores information used by different managers for multiple purposes

15

5) Cost accounting provides all of the following EXCEPT:
A) information for management accounting and financial accounting
B) pricing information from marketing studies
C) financial information regarding the cost of acquiring resources
D) nonfinancial information regarding the cost of operational efficiencies

B) pricing information from marketing studies

16

16) Management accounting includes all of the following EXCEPT
A) implementing strategies
B) developing budgets
C) preparing special studies and forecasts
D) preparing the statement of cash flows

D) preparing the statement of cash flows

17

17) Financial accounting is concerned primarily with:
A) external reporting to investors, creditors, and government authorities
B) cost planning and cost controls
C) profitability analysis
D) providing information for strategic and tactical decisions

A) external reporting to investors, creditors, and government authorities

18

18) Financial accounting provides a historical perspective, whereas management accounting emphasizes:
A) the future
B) past transactions
C) a current perspective
D) reports to shareholders

A) the future

19

19) An Enterprise Resource Planning System can best be described as:
A) a collection of programs that use a variety of unconnected databases
B) a single database that collects data and feeds it into applications that support each of the company's business activities, such as purchases, production, distribution, and sales
C) a database that is primarily used by a purchasing department to determine the correct amount of a particular supply item to purchase
D) a sophisticated means of linking two or more companies to facilitate their planning processes

B) a single database that collects data and feeds it into applications that support each of the company's business activities, such as purchases, production, distribution, and sales

20

20) The approaches and activities of managers in short-run and long-run planning and control decisions that increase value for customers and lower costs of products and services are known as:
A) value chain management
B) enterprise resource planning
C) cost management
D) customer value management

C) cost management

21

TRUE FALSE
21) Management accounting information focuses on external reporting.

Answer: FALSE
Explanation: Management accounting information focuses on internal reporting.

22

TRUE FALSE

22) Cost management is narrowly focused on a continuous reduction of costs.

Answer: FALSE
Explanation: Cost management is broadly focused to provide information that helps managers at all levels implement, monitor, and evaluate company strategies.

23

TRUE FALSE

23) Managers always require the information in an accounting system to be presented in the same format.

Answer: FALSE
Explanation: Individual managers often require the information in an accounting system to be presented or reported differently.

24

TRUE FALSE

24) Modern cost accounting takes the perspective that collecting cost information is a function of the management decisions being made.

Answer: TRUE

25

TRUE FALSE

25) The balance sheet, income statement, and statement of cash flows are used for financial accounting, and also for management accounting.

Answer: TRUE

26

TRUE FALSE

26) Financial accounting is broader in scope than management accounting.

Answer: FALSE
Explanation: Management accounting is broader in scope than financial accounting.

27

TRUE FALSE

27) Cost accounting measures and reports short-term, long-term, financial, and non financial information.

Answer: TRUE

28

TRUE FALSE
28) Cost management provides information that helps increase value for customers.

Answer: TRUE

29

TRUE FALSE

29) Management accounting has to strictly follow the rules of generally accepted accounting principles for the purposes of measurement and reporting.

Answer: FALSE
Explanation: Internal measures and reports do not have to follow GAAP.

30

TRUE FALSE

30) An ideal database should store information in a way that allows different managers to access the information they need.

Answer: TRUE