Deck 1: Introduction to Cost Management

Question 1

The Controller of a company supervises all the accounting departments and is often viewed as a member of the top management team.

Answer 1

True

Question 2

An accounting information system collects, records, summarizes, analyzes, and manages data to transform inputs into information that is provided to users.

Answer 2

True

Question 3

Changes in the way business is conducted worldwide have broadened the focus of cost management accounting systems.

Answer 3

True

Question 4

The three broad objectives of financial accounting information systems are to provide information for costing out services and products, planning and control, and decision making.

Question 5

The process of choosing among competing alternatives is called decision making.

Question 6

The role of cost and management accountants is one of support and teamwork and assistance of those who are responsible for achieving a company's basic objectives.

Question 7

Positions that have direct responsibility for basic objectives are referred to as staff positions, and those indirectly responsible are called line positions.

Question 8

The service sector of the U.S. economy has decreased in importance as traditional industries have declined in importance.

Question 9

Business ethics is learning what is right or wrong in the work environment and choosing what is right.

Question 10

Preparing reports for division managers is an activity associated with the cost management information system.

Question 11

JIT is a critical part of a more comprehensive approach referred to as Lean Manufacturing.

Question 12

The cost management information system has two major subsystems: the cost accounting information system and the operational control information system.

Question 13

The cost management information system is primarily concerned with producing outputs for external users.

Question 14

One of the major advances in information technology that affects firms is the emergence of electronic commerce.

Question 15

In just-in-time (JIT) manufacturing, each operation produces only what is necessary for the succeeding operations.

Question 16

Evaluating the performance of a segment of the company is an example of planning.

Question 17

The Treasurer of a company is responsible for all taxation activities, including dealing with the IRS.

Question 18

The focus of Lean Manufacturing is to eliminate waste, which is anything that does not add value to the end user (customer).

Question 19

Enterprise resource planning (ERP) software has the objective of providing an integrated system capability and is able to run all the operations of a company.

Question 20

The two major subsystems of the accounting information system are the financial accounting information system and the cost management accounting information system.

Question 21

For each certification, all an applicant has to do is meet specific educational and experience requirements.

Question 22

Employee and customer loyalty are NOT a result of strong codes of ethics.

Question 23

The _________ information system is primarily concerned with producing outputs for internal users using inputs and processes needed to satisfy management objectives.

Question 24

The Certified Internal Auditor must pass a comprehensive examination designed to ensure technical competence and have two years' work experience.

Question 25

The Institute of Management accountants has established ethical standards for management accountants.

Question 26

Companies with a strong _________ can benefit from strong customer and employee loyalty.

Question 27

The role of _________ accountants is to assist and support those responsible for carrying out an organization's basic objectives.

Question 28

The _________ is a method used to continuously improve manufacturing and nonmanufacturing activities.

Question 29

Three of the major certifications available to management accountants are Certificates in Management Accounting, Public Accounting, and Internal Auditing.

Question 30

The examination for obtaining the Certificate in Management Accounting consists of two parts: (1) Financial Planning, Performance and Control, and (2) Financial Decision Making.

Question 31

_________ is the persistent pursuit and elimination of waste which results in the decrease of lead time.

Question 32

Firms subject to the Sarbanes-Oxley Act of 2002 do not have to disclose whether they have a code of ethics for senior financial officers, nor why.

Question 33

Divulging company information when not legally obligated to do so violates the confidentiality part of the IMA Code of Conduct.

Question 34

Positions in a company that have direct responsibility for its basic objectives are called _________ positions, and the positions indirectly responsible for the company's objectives are called _________ positions.

Question 35

The standards of ethical conduct for management accountants include competence, confidentiality, integrity, resolution of ethical conflict, and _________.

Question 36

Only Certified Public Accountants are permitted by law to serve as _________.

Question 37

The IMA's program to recognize professional competence in the field of management accounting yields a designation as a _________ Accountant.

Question 38

The cost management subsystem designed to assign costs to individual products and services is called the _________ information system.

Question 39

In resolving an ethical conflict, it would be appropriate to take the matter to the press where there's no legal requirement.

Question 40

The Certificate of Public Accounting does not include the right to serve as external auditors.

Question 41

In an accounting information system, which of the following is NOT a transformational process?

A)collecting data
B)analyzing data
C)performance reporting
D)summarizing data

Question 42

Which of the following costing activities is associated with the financial accounting system?

A)determining the cost of a department
B)determining the cost of goods sold for financial statements
C)preparing budgets
D)determining the cost of a customer

Question 43

The type of management which broadens the focus of accounting because it is concerned with factors that drive costs, such as cycle time and process productivity is called:.

A)Cost accounting
B)Cost management
C)Financial management
D)Financial accounting

Question 44

Which of the following is NOT provided by cost accountants?

A)cost information in accordance with GAAP
B)cost information about processes and activities
C)financial information for external users
D)cost information about products, customers, and services

Question 45

Cost management information systems provide information:

A)for preparing the planning and controlling measures of an organization.
B)to prepare statements of cash flows and balance sheets for external users.
C)that can be used for regulatory measures.
D)for stewardship evaluation.

Question 46

Financial accounting information is used for

A)investment decisions.
B)regulatory measures.
C)stewardship evaluation.
D)all of the above.

Question 47

Which of the following information systems provides information that helps managers engage in a program of continuous improvement of all aspects of their businesses?

A)The financial accounting information system
B)The operational control information system
C)The cost management information system
D)The value chain information system

Question 48

Which of the following does NOT describe cost management system?

A)evaluation of segments or products within the firm
B)emphasis on the future
C)externally focused
D)focus on effective use of resources

Question 49

Which of the following is a cost management subsystem designed to assign costs to individual products and services and other objects, as specified by management

A)financial accounting information system
B)operational control system
C)cost accounting information system
D)all of the above

Question 50

Which of the following activities is NOT associated with the cost management information system?

A)preparing a cost of quality report
B)preparing a performance report that compares actual costs to budgeted costs
C)determining the cost of a customer
D)using future expected earnings to estimate the price of a share of common stock

Question 51

The _____ information system is concerned with producing outputs for external users.

A)forensic accounting
B)financial accounting
C)operational accounting
D)lean accounting

Question 52

The primary objective of the cost management information system is to provide

A)stockholders and potential investors with useful information for decision making.
B)banks and other creditors with information useful in making credit decisions.
C)management with information useful for planning and control of operations.
D)the Internal Revenue Service with information about taxable income.

Question 53

Cost accounting

A)is concerned with assigning costs to various cost objects.
B)attempts to satisfy the costing objectives of both financial accounting and management accounting.
C)provides cost information that supports planning, controlling, and decision making.
D)all of these.

Question 54

Which of the following is NOT part of the financial accounting information system?

A)filing reports with the SEC
B)reporting a large contingent liability to current and potential shareholders
C)determining the future cash flows of a proposed flexible manufacturing system
D)preparing GAAP financial statements

Question 55

Cost management is concerned with producing outputs for _____.

A)internal managers
B)creditors
C)investors
D)regulatory authorities

Question 56

Which of the following is NOT a process associated with an accounting information system?

A)auditing existing data
B)collecting and recording data
C)providing information to users
D)analyzing and managing data

Question 57

Which of the following activities is NOT associated with the financial accounting information system?

A)reporting on the cost of quality
B)reporting to the SEC
C)preparing reports for the IRS
D)preparing a statement of cash flows

Question 58

The cost management information system is concerned with

A)reporting financial information according to GAAP.
B)providing cost information that is used in planning, control, and decision-making.
C)reporting to external users.
D)providing financial information to investors.

Question 59

In an accounting information system, the inputs are usually

A)financial statements.
B)analyzing data.
C)performance reports.
D)economic events.

Question 60

Which of the following activities is associated with the cost management information system?

A)preparing reports for division managers
B)preparing reports for the IRS
C)preparing reports for the SEC
D)preparing financial statements that conform to GAAP

Question 61

Which of the following is an advantage of analyzing big data sets using business analytics?

A)An increased current ratio
B)A reduced arbitrage fund
C)An improved quality
D)A decreased basis risk

Question 62

Software that has integrated system capability using real time data is

A)enterprise resource planning software.
B)on-line analytic programs.
C)computer-assisted engineering software.
D)none of these.

Question 63

Which of the following manufacturing management approaches has allowed firms to increase quality, reduce inventories, eliminate waste, and reduce costs?

A)The operational manufacturing system
B)Online analytic programs
C)The decision-support system
D)Lean manufacturing

Question 64

Competitive advantage is established by providing

A)more customer products than competitors.
B)better quality than competitors.
C)greater customer value for less cost than competitors.
D)greater efficiencies than competitors.

Question 65

Factors that have led to a global market for manufacturing and service firms are

A)improved transportation and communications systems.
B)improved telemarketing and communications.
C)improved telemarketing and transportation systems.
D)None of these factors have contributed.

Question 66

The _____ system is an integrated system capable of providing access to real-time data from the various functional areas of a company.

A)financial management information
B)enterprise resource planning
C)lean accounting management
D)operational control information

Question 67

Total quality management emphasizes

A)zero defects.
B)continual improvement.
C)elimination of waste.
D)all of these.

Question 68

Which of the following activities is NOT significant to the advancement of information technology?

A)enterprise resource planning software
B)emergence of electronic commerce
C)theory of constraints
D)decision support systems

Question 69

Manufacturing environment automation is associated with increases in

A)inventory.
B)productive capacity.
C)processing time.
D)none of these.

Question 70

In JIT manufacturing, each operation produces

A)only what is necessary for the succeeding operations.
B)all that it can to offset fixed costs.
C)a fixed percentage in excess of orders to ensure adequate quality stock.
D)all that it can in order to build inventories.

Question 71

A demand-pull system that strives to produce a product only when it is needed and only in the quantities demanded by customers is referred to as:

A)supply chain management.
B)theory of constraints.
C)lean manufacturing.
D)just-in-time manufacturing.

Question 72

Which of the following cost management tools supports the firm's concentration on the delivery of value to the customer?

A)service industry growth
B)global competition
C)preparing an earnings report for the SEC
D)value-chain analysis

Question 73

The increased importance of costing activities in the value chain and determining the cost of different suppliers and customers has led to the emergence of

A)OLAP.
B)EDI and supply chain management.
C)CAM.
D)theory of constraints.

Question 74

Any form of commerce that is executed using information and communications technology is called:

A)ERP
B)OLAP
C)electronic commerce
D)DSS

Question 75

Which of the following statements is TRUE?

A)The service sector comprises approximately three quarters of the United States' economy and employment.
B)The service sector comprises approximately 20 percent of the United States' economy and employment.
C)Traditional smokestack industries have increased in importance in recent years.
D)The service sector has decreased in importance in recent years.

Question 76

Which of the following emerging trends in cost accounting deals with managers striving to create an environment that will enable workers to manufacture perfect (zero-defect) products?

A)advances in information technology
B)time as a competitive element
C)global competition
D)total quality management

Question 77

JIT is a critical part of a more comprehensive approach referred to as:

A)supply chain management
B)lean manufacturing
C)just-in-time manufacturing
D)computer-integrated manufacturing

Question 78

Which of the following advances in information technology includes external data sets and, at the same time, integrates the analysis with an organization's internal databases?

A)Decision-support systems
B)Integrated cost management
C)Business analytics
D)Online inventory system

Question 79

Which of the following activities is NOT associated with new product development?

A)life-cycle costing
B)target costing
C)activity-based management
D)performance reports

Question 80

Which of the following is NOT an advance in information technology that affects firms?

A)computer integrated applications
B)GAAP reporting
C)emergence of electronic commerce
D)availability of tools such as OLAP and DSS