Deck 1: The Accountants Vital Role in Decision Making

Question 1

The key to a company's success is always to be the low cost producer in a particular industry.

Answer 1

False

Question 2

In what way do managers benefit from the use of a management information system?

A)Data can be entered at numerous input terminals within the organization.
B)The managers would not be completely responsible for the information that is entered into the database system.
C)The managers could combine or adjust data to answer the questions from particular internal and external users.
D)The managers do not benefit,as the information requires technical expertise to retrieve.
E)Managers can store old documents in hard copy.

Answer 2

C

Question 3

The text identifies six ways to classify the major differences between Management and Financial Accounting.The statement "Varies from hourly to 15 to 20 years" is an example of which of the following classes of differences?

A)purpose of information
B)primary users
C)focus and emphasis
D)rules of measurement and reporting
E)time span and type of reports

Answer 3

E

Question 4

The text identifies six ways to classify the major differences between Management and Financial Accounting.The statement "Communicate organization's financial position to external users" is an example of which of the following classes?

A)purpose of information
B)primary users
C)focus and emphasis
D)rules of measurement and reporting
E)time span and type of reports

Question 5

"Cost management" describes

A)the actions by managers to increase value for customers while continuously reducing and controlling costs.
B)the identification of excessive costs in the production process.
C)the satisfaction of customers' needs.
D)actions by managers to satisfy customers while maintaining current cost levels.
E)ensuring all costs remains constant.

Question 6

Management accounting is guided by generally accepted accounting principles.

Question 7

Management accountants are required to follow the generally accepted accounting principles that are used for external financial reporting when preparing reports for internal users.

Question 8

Managerial accounting and cost accounting both measure and report financial and non-financial information relating to the cost of acquiring or utilizing resources.

Question 9

Corporate social responsibility is now mandatory for all publicly traded companies in Canada.

Question 10

The text identifies six ways to classify the major differences between management and financial accounting.The "managers of the organization" is an example of which of the following classes of differences?

A)purpose of information
B)primary users
C)focus and emphasis
D)rules of measurement and reporting
E)time span and type of reports

Question 11

Companies generally follow one of two basic strategies: 1)providing a quality product or service at low prices,or 2)offering a unique product or service often priced higher than competing products.

Question 12

Companies with a strategy of low prices compete on their ability to offer unique new products or services that are priced higher than their competition.

Question 13

Cost management involves long-term and short-term decisions that attempt to increase value for customers and lower costs of products or services.

Question 14

There are three (3)basic business strategies: low cost,premium products,and customer satisfaction.

Question 15

Which of the following is something management accountants should do to satisfy their users?

A)provide specialized information that given users can use
B)consider only financial measures
C)focus exclusively on internal users
D)follow generally accepted accounting principles
E)focus on planning more than control

Question 16

Managers typically receive reports on cost planning and controls that should be considered for internal use only.

Question 17

Cost accounting provides information for both management and financial accounting.

Question 18

The text identifies six ways to classify the major differences between Management and Financial Accounting.The statement "Past oriented (reports on 2011 performance prepared in 2012)" is an example of which of the following classes?

A)purpose of information
B)primary users
C)focus and emphasis
D)rules of measurement and reporting
E)time span and type of reports

Question 19

Financial accounting is concerned primarily with

A)cost planning and cost controls.
B)external reporting to investors,government authorities,etc.
C)profitability analysis.
D)providing information for strategic and tactical decisions.
E)providing analysis to facilitate long term decision making.

Question 20

The Global Reporting Initiative (GRI)is a nonprofit organization established to develop guidelines so that reporting on economic,environmental and social performance by all organizations is as routine and comparable as financial reporting.

Question 21

Management accounting

A)helps creditors evaluate the company's performance.
B)helps managers make decisions.
C)is useful for external and internal users.
D)creates technical reports that require external audit for verification.
E)is the same as cost accounting.

Question 22

What competitive advantage could a company obtain from a successful cost management program?

Question 23

Do you agree that prior management decisions affect cost management?

A)Yes.Managers should always follow prior management decisions,for example,in the determination of the EOQ.
B)No.Managers should ignore prior management decisions.
C)Yes.Managers should always strive to lower the costs incurred last year,as their number 1 priority.
D)Yes.The only prior management decisions that can affect cost management going forward,are concerned with employee wages.All other decisions can be changed.
E)Yes.Prior management decisions can affect any area of the business operations,and commit the organization to the subsequent or continued incurrence of costs in such areas as material handling,and plant construction,for example.

Question 24

Generally,companies follow one of two broad strategies: offering a quality product at a low price,or offering a unique product or service priced higher than the competition.Is it possible to follow a strategy that is "in the middle"?

Question 25

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.
E)exception reporting system for plant managers.

Question 26

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.
E)The reports are audited so can be used in confidence by potential investors.

Question 27

Enterprise Resource Planning software (ERP)

A)integrates data and provide managers with reports that highlight the interdependence of different business activities.
B)facilitates "Easy Reporting for Proposals."
C)provides financial reports for each separate enterprise in a conglomerate.
D)is used only by plant managers to create "Exceptional Reports for Production."
E)is free software downloaded over the Internet.

Question 28

In the value chain,research and development is the detailed planning and engineering of products,services,or processes.

Question 29

Financial accounting

A)focuses on the future and includes activities such as preparing next year's operating budget.
B)must comply with IFRS/ASPE.
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.
E)is primarily concerned with profitability analysis.

Question 30

Generally,companies follow one of two broad strategies: offering a quality product at a low price,or offering a unique product or service priced higher than the competition.Assume you are opening a small food outlet across the street from your campus.How might that business be operated under each of the two broad strategies? Consider the following specific operational areas:
a.target customers
b.products offered
c.product pricing
d.location choice
e.advertising content
f.advertising media

Question 31

Describe management accounting and financial accounting.

Question 32

Value chain and supply chain are two terms describing the same set of business functions.

Question 33

Sub-contracting a business function can be part of supply chain management.

Question 34

The people who rely most exclusively on the information in a company's audited financial statements are

A)senior management.
B)the accounting staff.
C)auditors.
D)operating managers.
E)shareholders.

Question 35

The value chain includes the following functions: research and development;design of products,services,or processes;production;marketing;distribution;customer service;and management satisfaction.

Question 36

Management accounting

A)measures,analyzes,and reports financial and nonfinancial information to internal managers.
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.
E)must follow generally accepted accounting principles.

Question 37

In the value chain,research and development generates and experiments with new ideas related to new products.

Question 38

In designing strategy,a company must match the opportunities and threats in the marketplace with

A)those of the CFO (Chief Financial Officer).
B)its resources and capabilities.
C)branding opportunities.
D)capabilities of current suppliers.
E)its competitors.

Question 39

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.
E)management information system.

Question 40

Strategy specifies

A)how an organization matches its own capabilities with the opportunities in the marketplace.
B)standard procedures to ensure quality products.
C)incremental changes for improved performance.
D)the demand created for products and services.
E)that a company's financial procedures are in compliance with IFRS/ASPE.

Question 41

Whose perceptions of the company's products or services are the most important to the manager?

A)board of directors' perception
B)customers' perception
C)president's perception
D)stockholders' perception
E)competitors' perception

Question 42

To be successful a company should be

A)customer driven.
B)"driven" by the board of directors.
C)employee driven.
D)management driven.
E)executive driven.

Question 43

There are many aspects of a company that managers should focus on.Which of the following sets most completely describes key success factors for managers in terms of delivering performance to customers?

A)cost and efficiency,time,quality,innovation
B)cost and efficiency,quality,innovation
C)cost and efficiency,shareholder value,quality,innovation
D)cost and efficiency,management by exception,quality,innovation
E)cost and efficiency,budgeting,quality,innovation

Question 44

Which of the following is TRUE concerning the value chain of business functions?

A)Managers should always proceed sequentially through the value chain,since distribution,for example,cannot occur before production is completed.
B)Senior managers from individual parts of the value chain do not have a responsibility in deciding on the organization's overall strategy.
C)An organization can only realize gains from having individual parts of the value chain work sequentially.
D)The value chain refers to the value added to the customer from marketing.
E)Senior managers from individual parts of the value chain have a responsibility in deciding how resources are to be obtained and used,and how rewards are to be given.

Question 45

Key success factors include time management.

Question 46

What aspect of business analysis focuses on the sequence of business functions?

A)customer service
B)value chain
C)quality
D)research and development
E)product design

Question 47

Determining the number of components to put into a computer monitor is an example of which of the following value chain functions?

A)research and development
B)design of products,services,and processes
C)production
D)marketing
E)distribution

Question 48

Developing a new web site to display and demonstrate the company's products would be part of which value chain function?

A)research and development
B)design of products,services,and processes
C)production
D)marketing
E)distribution

Question 49

TQM is a method for improving quality.

Question 50

When a company works with its supplier to reduce material-handling costs,this is an example of

A)the customer-driven approach.
B)a conflict of interest.
C)a key success factor.
D)a strategic marketing focus.
E)total value chain or supply chain analysis.

Question 51

For best results,cost management emphasizes independently coordinating supply chain activities within a company and not interfering with other companies.

Question 52

Key success factors are geared to improving customer satisfaction.

Question 53

________ is an operational activity that is essential to corporate performance.

A)Customer focus
B)A key success factor
C)Continuous improvement
D)Supply chain
E)Value chain

Question 54

The value chain is the sequence of business functions in which

A)value is deducted from the products or services of an organization.
B)value is proportionately added to the products or services of an organization.
C)rational experimentation is performed to enhance product compatibility.
D)products and services are evaluated with respect to their value to the supply chain.
E)usefulness is added to the products or services of an organization.

Question 55

________ describe(s)the flow of goods,services,and information from the purchase of materials to the delivery of products to consumers,regardless of whether those activities occur in the same organization or with other organizations.

A)Supply chain
B)Key success factors
C)Continuous improvement
D)Customer focus
E)Value chain

Question 56

________ is the generation of,and experimentation with,ideas related to new products,services,or processes.

A)Research and development
B)Design of products,services,or processes
C)Production
D)Marketing
E)Quality control

Question 57

R&D,production,and customer service are business functions that are all included as part of

A)the value chain.
B)benchmarking.
C)marketing.
D)the supply chain.
E)the company strategy.

Question 58

Key success factors such as quality,time,and the provision of innovative products and services,must be executed well to achieve corporate performance.

Question 59

Place the five business functions in the order they appear along the value chain:
A = Customer service
B = Design
C = Distribution
D = Production
E = Research and Development
F = Marketing

A)A,E,B,D,C,F
B)A,C,D,B,F,E
C)E,B,D,F,C,A
D)E,B,A,D,F,C
E)B,E,D,F,C,A

Question 60

The supply chain refers to the sequence of business functions in which customer usefulness is added to products or services.

Question 61

Control includes the performance evaluation of personnel and operations.

Question 62

Describe the value chain and how it can help organizations become more effective.

Question 63

Understanding the reasons for any difference between actual results and budgeted amounts is an important aspect of

A)extended value-chain analysis.
B)forecasting for the next accounting period.
C)kaizen management.
D)control.
E)management by perception.

Question 64

Once an action plan is implemented,it should

A)ensure that managers follow the pre-existing plan.
B)allow the originating manager(s)to keep lower-level managers from making changes.
C)be flexible.
D)should be followed rigidly.
E)requires top management permission to change.

Question 65

A budget is defined as

A)the qualitative expression of a plan.
B)an aid in controlling income.
C)the quantitative expression of a plan of action by management.
D)the quantitative expression of a plan and an aid in controlling income.
E)an aid in coordinating and implementing a plan.

Question 66

List and briefly describe each function in the value chain.Provide an example for each of the value chain functions identified.

Question 67

Cyclone Car Company tries to assign appropriate responsibilities to all of its managers.Production managers receive reports which accumulate information of the shop operations for each plant.Plant operations are further aggregated in the report received by the vice president of manufacturing.These reports show the budgeted and actual operating results for the current month and year-to-date.These,along with inventory status reports,provide the major source of production information for the next planning period.Managers evaluate the variances between actual and budgeted amounts and determine whether operations are in or out of control.If variances are large,appropriate action is taken,i.e. ,the plans are changed.
The company's profits have been decreasing,and management has requested similar aggregate sales data from marketing.It is felt that this added information will suffice for its decision-making needs.
Required:
Do you agree? Why? Do you foresee any needs that will not be met by this information? If so,what additional information do you suggest that management be provided by the management accounting system?

Question 68

Control includes deciding what feedback to provide that will help with future decision making.

Question 69

Customers are demanding that companies use the value chain and supply chain to deliver ever-improving levels of performance regarding key success factors.Briefly describe each of the following key success factors: cost and efficiency;quality;time;innovation.For each key success factor give an example an activity that relates to that factor;and,the effect of that activity on the value chain.

Question 70

The process of preparing a budget enhances coordination and communication throughout the company.

Question 71

________ is a philosophy in which management improves operations throughout the value chain to deliver products and services that exceed customer expectations.

A)Cost-benefit approach
B)Customer focus
C)Customer relationship management
D)Total quality management
E)Management by objectives

Question 72

The value chain

A)for all companies starts with research and development.
B)is a strategy that integrates people and technology in all business functions to enhance relationships with customers,partners,and distributors.
C)describes the flow of goods,services,and information from their initial sources to the delivery to consumers regardless if those activities occur in one or more organizations.
D)is a strategy that can be focused on providing consumer goods at the lowest possible cost.
E)is the sequence of business functions in which customer usefulness is added to products or services.

Question 73

Learning arises from comparing actual performance to expected performance.

Question 74

A bonus paid to high performing sales persons is an example of an intrinsic reward.

Question 75

A budget may be used as a planning tool,but not as a control tool.

Question 76

Which of the following is a major benefit of utilizing a budgeting system?

A)It always results in more profitable decisions.
B)It is easier for managers than traditional decision-making models.
C)It saves costs by utilizing historical data to make projections.
D)It facilitates coordination and communication.
E)Once a successful budget is developed,it can be re-used year after year.

Question 77

Management should evaluate the difference between planned and budgeted amounts.

Question 78

Performance measures must be based on financial information to be verifiable.

Question 79

Planning is choosing goals,predicting results under various alternative ways of achieving those goals,and then deciding how to attain the desired goals.

Question 80

The problem identification function is the accumulation of data and reporting reliable results to all levels of management.