Deck 1: Managerial Accounting, the Business Organization, and Professional Ethics

Question 1

Some service organizations make tangible goods.

Answer 1

False

Question 2

The cost-benefit balance is the primary consideration in choosing among accounting systems and methods.

Answer 2

True

Question 3

Of primary consideration in management accounting are economic and behavioral considerations.

Answer 3

True

Question 4

Generally accepted accounting principles play an important part in management accounting.

Question 5

Most scorecard and attention-directing information are produced on a nonroutine basis.

Question 6

Financial accounting reporting is usually for a time period of a year or less.

Question 7

Setting objectives deals with controlling.

Question 8

A budget is a qualitative expression of a plan of action.

Question 9

A whistle-blower is a supervisor that reports wrongdoings to the people he or she supervises.

Question 10

Decisions within an organization are often divided into two types: 1) planning decisions and 2) control decisions.

Question 11

The primary purpose of accounting information is to help managers make decisions.

Question 12

Feedback is usually not crucial in controlling.

Question 13

Financial accounting reporting is focused on future evaluation.

Question 14

When the benefits of a potential decision are greater than the costs, the decision should usually be made.

Question 15

The behavioral implications of an accounting system include the effects on the firm's customers.

Question 16

Variances are deviations from plans.

Question 17

Management by exception is the practice of concentrating on areas that deviate from
the plan and ignoring areas that are presumed to be running smoothly.

Question 18

Scorekeeping enables internal and external parties to evaluate organizational performance.

Question 19

The same information may serve the attention-getting function and the problem-solving function.

Question 20

A manager using information to decide whether to add or drop a product is an example of problem solving.

Question 21

Most products have short development stages and long market lives.

Question 22

Staff authority is authority to advise but not command.

Question 23

The treasurer is an organization's top accounting officer.

Question 24

The value chain is the sum of all costs added to products as the products pass from manufacturers to wholesalers to retailers.

Question 25

Performance reports are the main device for disciplining management planning.

Question 26

One of a controller's responsibilities is tax administration.

Question 27

A link in the value chain is customer service, an example of which is accounting.

Question 28

A budget uses predicted or estimated revenues and costs.

Question 29

Maintenance provides line support at a factory.

Question 30

One of the treasurer's responsibilities is risk management.

Question 31

In English-speaking countries outside of the United States, management accountants are known as chartered accountants.

Question 32

The product life cycle for a refrigerator is usually a few months.

Question 33

Certified Management Accountant CMA) pertains to independent auditors.

Question 34

Line departments are directly responsible for producing a company's goods and services.

Question 35

Product life cycles may range from a few months to many years.

Question 36

Accountants provide cost data for customer service activities, such as warranty costs.

Question 37

Specialization by individuals is giving way to decision making by cross-functional teams.

Question 38

The only link in the value chain where accountants are of any importance is the production stage.

Question 39

The Chief Financial Officer CFO) deals with finance and accounting issues.

Question 40

The controller is primarily concerned with a company's financial matters, the treasurer with operating matters.

Question 41

The primary users of management accounting information are _____.

A)bankers
B)governmental regulatory authorities
C)internal decision makers
D)suppliers

Question 42

The essence of the just-in-time JIT) philosophy is to eliminate waste.

Question 43

Companies that have a fully installed computer-integrated system CIM) are usually labor intensive.

Question 44

The acronym GAAP is most closely connected with _____.

A)management accounting
B)financial accounting
C)the IRS
D)both management accounting and financial accounting

Question 45

_____ is the field of accounting that develops information for external decision makers such as stockholders, suppliers, banks, and government regulatory agencies.

A)Auditing
B)Tax accounting
C)Management accounting
D)Financial accounting

Question 46

Which scorecard function is associated with the accumulation of data?

A)Scorekeeping is associated with the accumulation of data.
B)Attention directing is associated with the accumulation of data.
C)Problem solving is associated with the accumulation of data.
D)None of these answers is correct.

Question 47

The majority of accountants work in public accounting.

Question 48

_____ is a formal mechanism for gathering, organizing, and communicating information about an organization's activities.

A)An accounting system
B)Scorekeeping
C)Management accounting
D)Attention directing

Question 49

In the final analysis, ethical standards depend on the values of top management.

Question 50

According to the Institute of Management Accountants' IMA) Statement of Ethical Professional Practice, every offered gift should be refused in a business setting.

Question 51

The service sector accounts for approximately 20% of the employment in the United States.

Question 52

XBRL, eXtensible business reporting language, is software that helps detect computer viruses.

Question 53

Emphasis on long-term results creates pressures for unethical behavior.

Question 54

Studying accounting helps a person understand decisions and how information can improve those decisions in many functional areas.

Question 55

E-procurement is buying and selling products and services with digital cash.

Question 56

Over 80% of United States companies have a code of conduct.

Question 57

_____ refers to accounting information developed for managers within an organization.

A)Internal auditing
B)Managerial accounting
C)Financial accounting
D)Tax accounting

Question 58

Nearly 90% of e-commerce is business-to-customer B2C).

Question 59

In the Institute of Management Accountants' IMA) Statement of Ethical Professional Practice, objectivity is one of the main categories.

Question 60

Working as an accountant only provides exposure to a few parts of an organization.

Question 61

Which scorecard function is associated with making nonroutine decisions?

A)Scorekeeping is associated with making nonroutine decisions.
B)Attention directing is associated with making nonroutine decisions.
C)Problem solving is associated with making nonroutine decisions.
D)None of these answers is correct.

Question 62

Ethical accountants are important to society because _____.

A)they pay their taxes
B)the information produced is reliable
C)they will not go to prison and waste taxpayers' money
D)none of these answers is correct

Question 63

Budgets _____.

A)are quantitative expressions of action plans
B)provide feedback by comparing results with plans and by highlighting deviations from plans
C)are deviations from a plan
D)ignore areas that are presumed to be running smoothly

Question 64

All of the following companies had significantly faulty accounting information in the past ten years except _____.

A)Enron
B)Tyco
C)Xerox
D)Microsoft

Question 65

Performance reports _____.

A)are quantitative expressions of action plans
B)provide feedback by comparing results with plans and by highlighting deviations from plans
C)are deviations from a plan
D)ignore areas that are presumed to be running smoothly

Question 66

Complexity in accounting systems _____.

A)is desirable if it reflects the complexity of the underlying business
B)can usually be justified on a cost-benefit basis
C)is necessary to manage the behavioral implications of the accounting system
D)frequently generates costs of gathering and interpreting data that often exceed prospective benefits

Question 67

Variances _____.

A)are quantitative expressions of action plans
B)provide feedback by comparing results with plans and by highlighting deviations from plans
C)are deviations from a plan
D)ignore areas that are presumed to be running smoothly

Question 68

_____ is are) the primary consideration in choosing among accounting systems and methods.

A)Simplicity
B)Behavioral implications
C)The cost-benefit balance
D)Computerization

Question 69

A management audit would be performed by all of the following except _____.

A)the General Accounting Office
B)a hospital
C)a sneaker manufacturer
D)all of these answers are correct

Question 70

_____ is a review to determine whether the policies and procedures specified by top management have been implemented.

A)The Foreign Corrupt Practices Act
B)A management audit
C)Generally Accepted Accounting Principles GAAP)
D)The Robinson-Patman Act

Question 71

Which scorecard function is associated with planning and control?

A)Scorekeeping is associated with planning and control.
B)Attention directing is associated with planning and control.
C)Problem solving is associated with planning and control.
D)None of these answers is correct.

Question 72

Nonprofit service organizations are similar to profit-seeking service organizations in that _____.

A)both use labor intensively
B)output is usually easy to define
C)major inputs and outputs can be stored
D)all of these answers are correct

Question 73

Broad concepts or guidelines and detailed practices that together make up accepted accounting practice at a given time are referred to as _____.

A)accounting rules and regulations
B)accounting conventions
C)Generally Accepted Accounting Principles GAAP)
D)Internal Revenue Systems regulations

Question 74

A clerk records a transaction in the accounting system.This activity would be classified as _____.

A)problem solving
B)scorekeeping
C)planning
D)attention directing

Question 75

All service organizations are similar in that _____.

A)there is very little labor
B)output is usually difficult to define
C)major inputs and outputs can be stored
D)they are capital intensive

Question 76

_____ is are) the accounting system's effect on the decision of managers.

A)Simplicity
B)Behavioral implications
C)The cost-benefit balance
D)Computerization

Question 77

All of the following are service organizations, except _____.

A)a dry cleaners
B)a public accounting firm
C)a manufacturer of sporting goods
D)a real estate brokerage

Question 78

Which of the following items should be considered in addition to simplicity by managers when designing accounting systems?

A)Cost-benefit balances should be considered.
B)Behavior implications should be considered.
C)Cost-benefit balances and behavior implications should be considered.
D)None of these answers is correct.

Question 79

The greatest impact of the Foreign Corrupt Practices Act on the accounting system is that it _____.

A)forbids bribery
B)prohibits unethical practices by foreign investors
C)requires documentation of the adequacy of internal accounting controls
D)specifies how to account for transactions with foreign countries

Question 80

Management by exception _____.

A)is the quantitative expression of action plans
B)provides feedback by comparing results with plans and by highlighting deviations from plans
C)is a summary report of plan results
D)focuses on areas that are presumed to be running smoothly