Deck 1: Management Accounting and Management Decisions

Question 1

Line departments support or service staff departments.

Answer 1

False

Question 2

________ 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

Answer 2

A

Question 3

Organizations that do not make or sell tangible goods are called service organizations.

Answer 3

True

Question 4

According to the Financial Executives Institute, the controller's function is to obtain both short-term and long-term loans.

Question 5

________ is the accumulation and classification of data.

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

Question 6

________ refers to accounting information developed for users within an organization.

A) An accounting system
B) Scorekeeping
C) Management accounting
D) Financial accounting

Question 7

The CMA program focuses on management accounting and its role in Canadian business.

Question 8

Line authority is authority exerted downward over subordinates.

Question 9

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

Question 10

Planning refers to setting objectives, implementing plans, and evaluating objectives.

Question 11

Sales growth occurs in the mature market stage of product life cycle.

Question 12

The Society of Management Accountants of Canada (SMAC) has developed standards of ethical conduct for management accountants, which include standards of competence, confidentiality, integrity and objectivity.

Question 13

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

Question 14

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

Question 15

Internal accounting reports must follow generally accepted accounting principles and account for assets at historical cost.

Question 16

The factors causing changes in management accounting today include increased global competition, technological advances and increased production by Canadian companies.

Question 17

Both internal managers and external parties use accounting information.

Question 18

Management accounting refers to accounting information developed for

A) shareholders.
B) governmental authorities.
C) managers within an organization.
D) loan officers.

Question 19

Management by exception involves a detailed analysis of all deviations from planned performance regardless of the amount.

Question 20

A survey of managers selected which of the following business areas as the most common starting-point for future managers?

A) Accounting.
B) Finance.
C) Legal environment of business.
D) Computers in business.

Question 21

A clerk prepares a monthly report comparing the actual phone bill with the expected phone costs. This activity would be classified as

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

Question 22

The watchword for the installation of systems in service industries and nonprofit organizations is

A) maximize.
B) simplicity.
C) constraints.
D) complexity.

Question 23

________ concentrate(s) on areas that deviate from the plan and ignore(s) areas that are presumed to be running smoothly.

A) A budget
B) Performance reports
C) Variances
D) Management by exception

Question 24

Financial accounting is constrained by GAAP. Management accounting is constrained by

A) GAAS.
B) the cost-benefit balance.
C) Revenue Canada.
D) the controller.

Question 25

Service organizations

A) sell tangible goods.
B) are not wholesalers.
C) are considered manufacturers.
D) must be profit-seeking.

Question 26

A characteristic of service organizations is that

A) labour is intensive.
B) output is easy to define.
C) major inputs and outputs can be stored.
D) plant and equipment costs are high in proportion to labour costs.

Question 27

Answering the following questions: When is dinner? Who is cooking it? is an example of

A) planning.
B) controlling.
C) budgeting.
D) analyzing.

Question 28

________ provide(s) feedback by comparing results with plans and by highlighting deviations from plans.

A) A budget
B) Performance reports
C) Variances
D) Management by exception

Question 29

________ is the aspect of accounting that quantifies the likely results of possible courses of action and often recommends the best course to follow.

A) Scorekeeping
B) Attention directing
C) Problem-solving
D) None of the above

Question 30

________ is (are) deviations from plans.

A) A budget
B) Performance reports
C) Variances
D) Management by exception

Question 31

Which of the following is a characteristic of both profit-seeking and nonprofit service organizations?

A) Labour is intensive.
B) Output is usually difficult to define.
C) Major inputs and outputs cannot be stored.
D) All of the above are characteristics.

Question 32

The primary consideration in choosing among accounting systems and methods is

A) simplicity.
B) behavioural issues.
C) cost-benefit balance.
D) computerization.

Question 33

Planning determines action, action generates feedback, and feedback influences

A) reports.
B) accounting systems.
C) further planning.
D) deviations.

Question 34

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

A) GAAS.
B) accounting conventions.
C) GAAP.
D) Revenue Canada regulations.

Question 35

________ is (are) a quantitative expression(s) of a plan of action.

A) A budget
B) Performance reports
C) Variances
D) Management by exception

Question 36

An accounting system should provide accurate, timely budgets and performance reports in a form useful to

A) shareholders.
B) bankers.
C) Revenue Canada.
D) managers.

Question 37

Launching a new product line is an example of

A) decision making.
B) planning.
C) controlling.
D) organization.

Question 38

The codes of conduct for integrity include all of the following EXCEPT

A) avoiding actual or apparent conflicts of interest.
B) refusing to advise or assist with the commission of fraud.
C) recognizing and communicating professional limitations.
D) communicating information subjectively.

Question 39

Cooking dinner and tasting the food are examples of

A) planning.
B) controlling.
C) budgeting.
D) analyzing.

Question 40

________ means reporting and interpreting information that helps managers to focus on operating problems, imperfections, inefficiencies, and opportunities.

A) Scorekeeping
B) Attention directing
C) Problem-solving
D) None of the above

Question 41

According to the Financial Executives Institute, one function of treasurership is

A) planning for control.
B) protection of assets.
C) investor relations.
D) economic appraisal.

Question 42

Actual results are compared to budgeted amounts in a

A) performance report.
B) financial statement.
C) production report.
D) flexible report.

Question 43

The various stages through which a product passes are called the

A) product life cycle.
B) production plan.
C) market analysis.
D) product initiative.

Question 44

________ is mainly concerned with the company's financial matters.

A) The controller
B) The treasurer
C) The secretary
D) None of the above

Question 45

A quantitative expression of a plan of action is a

A) variance.
B) performance report.
C) control.
D) budget.

Question 46

The product development stage in a product's life cycle corresponds to

A) no sales.
B) sales growth.
C) stable sales level.
D) low and decreasing sales.

Question 47

________ is the designation that provides the greatest orientation toward management accounting.

A) CIA
B) CMA
C) CEO
D) CGA

Question 48

Management by exception means management concentrates on

A) significant activities proceeding as planned.
B) significant deviations from expected results.
C) insignificant activities proceeding as planned.
D) insignificant deviations from expected results.

Question 49

Authority exerted downward over subordinates is referred to as

A) line authority.
B) staff authority.
C) general authority.
D) specific authority.

Question 50

An example of a line department at a jewelry manufacturer is the

A) accounting department.
B) finance department.
C) maintenance department.
D) sales department.

Question 51

The mature market stage in a product's life cycle corresponds to

A) no sales.
B) sales growth.
C) stable sales level.
D) low and decreasing sales.

Question 52

According to the Financial Executives Institute, one function of controllership is

A) investments.
B) short-term financing.
C) provision of capital.
D) reporting and interpreting.

Question 53

Authority to advise but NOT command is called

A) line authority.
B) staff authority.
C) general authority.
D) specific authority.

Question 54

A significant unfavourable variance

A) should be ignored because of materiality.
B) could not result from careless budgeting.
C) is the result of proper planning.
D) should be analyzed, and measures should be taken to correct the situation.

Question 55

Chartered Accountants are

A) internal auditors.
B) management accountants.
C) external auditors.
D) clerical accountants.

Question 56

The phase-out-of-product stage in a product's life cycle corresponds to

A) no sales.
B) sales growth.
C) stable sales level.
D) low sales to no sales.

Question 57

The introduction to market stage in a product's life cycle corresponds to

A) no sales.
B) sales growth.
C) stable sales level.
D) low and decreasing sales.

Question 58

A synonym for deviation is

A) planned.
B) systematic.
C) variance.
D) reported.

Question 59

Product life cycles

A) are the same for all products.
B) must be considered to effectively plan for production.
C) are computerized bicycles.
D) have nothing to do with product profitability.

Question 60

The top accounting officer in an organization is often

A) the controller.
B) the treasurer.
C) the CFO.
D) the CEO.

Question 61

Authority exerted downward over subordinates.

Question 62

A quantitative expression of a plan of action, and an aid to coordinating and implementing the plan.

Question 63

Deviations from plans.

Question 64

Which of the following factors is causing changes in management accounting today?

A) Shift from a manufacturing-based to a service-based economy.
B) Increased global competition.
C) Advances in technology.
D) All of the above are factors.

Question 65

Concentrating on areas that deserve attention and ignoring areas that are presumed to be running smoothly.

Question 66

The person from whom the controller derives authority to set accounting procedures.

Question 67

Which of the following individuals would likely NOT be users of management accounting reports?

A) company presidents
B) university deans
C) bankers
D) chief physicians

Question 68

The largest Canadian association of professional accountants whose major interest is management accounting is the

A) Canadian Institute of Chartered Accountants.
B) Certified General Accountants of Canada.
C) Government Accounting Institute.
D) Society of Management Accountants of Canada.

Question 69

Which of the following statements about ethical dilemmas faced by management accountants is FALSE? Ethical dilemmas

A) are clear-cut.
B) involve conflict between two or more ethical standard.
C) require individual integrity and judgment.
D) require the application of ethical standards.

Question 70

Systems that use computer-aided design and computer-aided manufacturing, together with robots and computer-controlled machines are called

A) just-in-time systems.
B) robotic-computer systems.
C) computer-integrated manufacturing systems.
D) manufacturing-robotic systems.

Question 71

Management accountants are similar to CAs and CGAs in that they

A) give opinions on financial statements.
B) are licensed by the Canadian Institute of public accountancy.
C) adhere to codes of conduct.
D) are independent of the company they work for.

Question 72

Broad concepts or guidelines and detailed practices, including all conventions, rules, and procedures that together make up accepted accounting practice at a given time.

Question 73

Below is a statement from the Code of Professional Ethics for the Society of Management Accountants. "Maintain at all times independence of thought and action."
It is an example of

A) competence.
B) confidentiality.
C) integrity.
D) objectivity.

Question 74

Weighing known costs against probable benefits, the primary consideration in choosing among accounting systems and methods.

Question 75

Systems that use CAD and CAM together with robots and computer-controlled machines are called

A) JIT.
B) CMA.
C) CIM.
D) none of the above.

Question 76

Which of the following statements about line authority is TRUE? Line authority

A) is similar to staff authority.
B) is indirectly related to the basic activities of an organization.
C) is exerted upwardly from subordinates.
D) includes the authority to command action.

Question 77

A philosophy to eliminate waste by reducing the time products spend in the production process and eliminating the time that products spend on activities that do NOT add value is

A) computer-integrated manufacturing.
B) just-in-time.
C) better late than never.
D) added value tax.

Question 78

Which of the following statements about management accounting is FALSE?

A) It is concerned with how measurements and reports will influence managers' daily behaviour.
B) It is less sharply defined than financial accounting.
C) Its primary users are organizational managers at various levels.
D) It is constrained by generally accepted accounting principles.

Question 79

The Society of Management Accountants has adopted a set of standards of professional ethics which includes codes of conduct regarding all of the following EXCEPT

A) competence.
B) independence.
C) integrity.
D) confidentiality.

Question 80

Authority to advise but not to command. It may be exerted downward, laterally, or upward.