Deck 1: An Introduction to Managerial Accounting and Cost Concepts

Question 1

Strategy pertains to the general direction in which an organization plans to move to achieve its goals and objectives.

Answer 1

True

Question 2

The main idea underlying the lean business model is the elimination of waste.

Answer 2

True

Question 3

Merchandising and manufacturing firms generate revenue by selling products.

Answer 3

True

Question 4

Management accounting information is primarily concerned with reports on the organization as a whole while financial accounting focuses more on the individual segments of the organization.

Question 5

Managerial Accounting reports are prepared for external users while Financial Accounting reports are prepared for internal users.

Question 6

Performance reports provide formal feedback to assist in determining whether operations and performance are on track..

Question 7

Planning includes identifying alternatives and then selecting the one that does the best job of furthering the organization's objectives.

Question 8

Planning involves selecting a course of action and specifying how the action will be implemented.

Question 9

Companies that use the just-in-time (JIT)approach purchase materials and produce units only as needed to meet actual customer demand.

Question 10

The theory of constraint (TOC)framework focuses on effectively managing constraints as the key to success.

Question 11

Management accountants are not required to follow the generally accepted accounting principles that are used for external financial reporting when preparing reports for internal users.

Question 12

Reduction in tariffs,quotas,and other barriers to free trade;improvements in global transportation system;and increasing sophistication in international trade markets,are several factors that have led to an increase in worldwide competition in many industries.

Question 13

Managers assign tasks to employees,arbitrate disputes,answer questions,solve on the spot problems,and make many decisions that affect customers and employees,which in turn,will likely influence future financial and nonfinancial performance.

Question 14

One major implication of globalization for many organizations is that they must find new ways of conducting business.

Question 15

The Code of Ethics for Professional Accountants established by the International Federation of Accountants governs only the activities of accountants in public practice.

Question 16

Control involves the process of instituting procedures and then obtaining feedback to ensure that all parts of the organization are functioning effectively and moving toward overall company goals.

Question 17

Among other things,companies using the just-in-time (JIT)approach,produce only in response to a customer order meaning that workers will not be idle whenever demand falls below the company's production capacity.

Question 18

Service firms do not sell any products but generate revenues by offering one or more types of services.

Question 19

Managers everywhere carry out three major activities: planning,implementation,and control.

Question 20

Merchandising firms largely refer to retail and wholesale outlets that buy goods from suppliers and resell them to customers.

Question 21

Managerial accounting emphasizes the future in addition to historical reports,whereas financial accounting:

A) emphasizes a future perspective.
B) emphasizes individual organizational units.
C) emphasizes timeliness.
D) emphasizes a historical perspective.

Question 22

In using total quality management (TQM),the key focus is,

A) employee focus.
B) management focus.
C) customer focus.
D) executive focus.

Question 23

Companies using the just-in-time (JIT)approach hope to achieve:

A) the hiring of specialized workers to increase production.
B) gains in production flexibility.
C) reduction of costs associated with setup by producing in large batches.
D) reduced defect rates,resulting in less waste and greater customer satisfaction.

Question 24

What is the professional designation for the majority of professional accountants in Canada?

A) Chartered Certified Accountants
B) Chartered Management Accountants
C) Chartered Professional Accountants
D) Certified Public Accountants

Question 25

Benchmarking begins with:

A) completely redesigning a business process to improve it.
B) determining the constraints within a given manufacturing process.
C) studying organizations that are the best at a particular task.
D) a determination to only build products to meet specific customer orders.

Question 26

Which of the following is NOT a benefit of a just-in-time (JIT)system?

A) Funds that have been tied up in inventories can be used elsewhere.
B) Areas previously used to store inventories are made available for other more productive uses.
C) The time required to fill an order is reduced,resulting in quicker response to customers and consequentially greater potential sales.
D) Production workers are always busy.

Question 27

Process reengineering is usually strongly accepted by all employees within an organization.

Question 28

Activities that do not add value to a product or service that customers are willing to pay for are considered to be:

A) normal business activities.
B) non-value-added activities.
C) part of the overhead costs of a business.
D) a constraint.

Question 29

Codes of ethics almost always provide employees with very specific and detailed instructions about what they can do and not do.

Question 30

There are four major characteristics of total quality management.

Question 31

Process reengineering diagrams a business process in detail,questions it,and then completely redesigns it to eliminate unnecessary steps,reduce opportunities for errors,and reduce costs.

Question 32

Financial accounting is primarily concerned with:

A) reporting to external investors and creditors.
B) long term decision making.
C) feasibility analysis.
D) reporting exclusively to internal users.

Question 33

Which of the following is NOT included in Codes of Ethics for professional accountants?

A) Professional competence
B) Objectivity
C) Compensation
D) Confidentiality

Question 34

Effective corporate governance enhances stakeholders' confidence that an organization is being managed in their best interests rather than solely in the interests of top management and certain key individuals.

Question 35

Corporate governance

A) is a department within Canada Revenue with a mandate to ensure all corporations file annual tax returns.
B) if effective,should enhance stakeholders' confidence that the organization is being managed in their best interests.
C) ensures the personal interests of top management are fully achieved.
D) is only important to non-publicly traded companies.

Question 36

In order to eliminate waste,companies must adopt and implement one or more management practices that focus on different aspects of the lean business model such as:

A) Just-in-Time.
B) maintaining inventories large enough to shield against all unanticipated disruptions.
C) Activity-Based Costing.
D) multi-dimensional performance measurement systems.

Question 37

The PDCA Cycle is a system of continuous improvement in which a planning committee selects from a list of alternatives for improvement and moves to fully implement immediately the chosen improvement.

Question 38

Defects can be tolerated in a just-in-time (JIT)system.

Question 39

A manufacturing business which operates five days per week has four different departments involved in producing each unit of its product.Maximum daily production capacities of each are: Department A - 100 units;Department B - 135 units;Department C - 95 units,and Department D - 110 units.Maximum weekly output of completed units is?

A) 440
B) 475
C) 550
D) 675

Question 40

Many Canadian organizations have successfully implemented quality management principles and have received recognition from Excellence Canada (formerly the National Quality Institute)whose mission is to inspire excellence in Canada.

Question 41

The management cycle proceeds in what order?

A) Control,implementation,planning
B) Planning,implementation,control
C) Implementation,planning,control
D) Implementation,control,planning

Question 42

Explain the importance of ethical responsibility and explain the need for ethical codes of conduct.

Question 43

List four management practices (programs of continuous improvement)that may be used to achieve the objectives of the lean business model.

Question 44

A manufacturing business has four different departments involved in producing each unit of its product.Maximum daily production capacities of each are: Department A - 100 units;Department B - 135 units;Department C - 95 units,and Department D - 110 units.Which department would be considered first in looking at ways to improve output capacity?

A) A
B) B
C) C
D) D

Question 45

List seven key differences between Managerial Accounting and Financial Accounting.

Question 46

Which of the following statements is not true?

A) Financial accounting and managerial accounting are independent of each other.
B) Financial accounting,due to the requirements of regulation,is mandatory for businesses.
C) Managerial accounting has a strong orientation towards the future.
D) Financial accounting presents a historical perspective of business activities.

Question 47

Explain the lean business model and its corresponding management practices and potential benefits.

Question 48

List four major potential benefits of successfully implementing a just-in-time (JIT)system in a manufacturing company.

Question 49

A manufacturing business has four different departments involved in producing each unit of its product.Maximum daily production capacities of each are: Department A - 100 units;Department B - 135 units;Department C - 95 units,and Department D - 110 units.A consultant has suggested some alternatives to increase output capacities as follows: Alternative A - increase Department B's output to 200 units per day.
Alternative B - increase Department C's output to 120 units per day.
Alternative C - increase both Department A's and Department C's outputs to 110 units per day.
Alternative D - increase Department D's output to 300 units per day.
Assuming the costs of each alternative are similar and that only one can be chosen,which alternative would yield the best results for the business?

A) A
B) B
C) C
D) D

Question 50

Describe factors that have led to an increase in worldwide competiveness as part of the globalization on business.