Deck 1: Introduction to Managerial Accounting

Question 1

Managerial accounting information is important for both for-profit and not-for-profit organizations.

Answer 1

True

Question 2

The managerial activity of monitoring a plan's implementation and taking corrective action as needed is referred to as controlling.

Answer 2

True

Question 3

Virtually all managerial accounting practices were developed to assist managers in maximizing profits.

Answer 3

True

Question 4

The belief that each member of a group bears some responsibility for the well-being of other members is a common principle underlying all ethical systems.

Question 5

Managerial accounting information is used only by manufacturing organizations.

Question 6

Customer value is the difference between what a customer receives and what they give up when buying a product or service.

Question 7

Managerial accounting is internally focused.

Question 8

Because service organizations do not make or sell tangible products, they have no need for managerial accounting.

Question 9

In Canada, both financial and managerial accounting are governed by the Accounting Standards Board (AcSB) of CPA Canada.

Question 10

Positions that have direct responsibility for the basic objectives of an organization are normally referred to as staff positions.

Question 11

A cost accountant would normally occupy a line position within an organization.

Question 12

Managerial accounting is designed primarily for external users.

Question 13

Value chain analysis is a useful way of examining a firm's competitive advantage.

Question 14

Activity-based costing is a detailed approach to determining the cost of goods and services.

Question 15

The value chain refers to the set of activities required to design, develop, produce, market, and deliver products and services to customers.

Question 16

The Triple Bottom Line refers to management putting triple the focus on profits.

Question 17

In Canada, new accounting students currently have a choice of pursuing their choice any of the following professional accounting designations: CMA, CGA, CA, or CPA.

Question 18

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

Question 19

Financial accounting has its emphasis primarily on the future.

Question 20

In larger organizations, the controller is typically also the Chief Executive Officer of a company.

Question 21

The CPA designation in Canada refers to Certified Professional Accountant.

Question 22

Which term refers to establishing objectives within an organization to include social and environmental impact?

A) triple impact
B) triple accounting
C) triple bottom line
D) triple cost analysis

Question 23

What is the emphasis of total quality management?

A) 1% defects
B) the status quo
C) acceptable quality
D) the elimination of waste

Question 24

According to M. E. Porter, which of the following reflects primary activities in the value chain?

A) inbound logistics, operations, outbound logistics, marketing and sales, service
B) procurement, inbound logistics, operations, outbound logistics, marketing and sales, service
C) procurement, technology development, human resources management, developing infrastructure
D) technology development, human resources management, operations, developing infrastructure

Question 25

Which of the following is a characteristic of customer value?

A) the establishment of a competitive advantage by creating better customer value for the same cost
B) the improvement of costing accuracy by emphasizing the activities and tasks that must be performed
C) the efficient performance of necessary activities and elimination of activities that do not create customer value
D) the difference between what a customer receives and what the customer gives up when buying a product or service

Question 26

What is investigating production variances and adjusting the production process an example of?

A) planning
B) delegating
C) controlling
D) decision making

Question 27

What is developing a company strategy for responding to anticipated new markets an example of?

A) planning
B) delegating
C) controlling
D) decision making

Question 28

What is a primary objective of managerial accounting?

A) to provide the Canada Revenue Agency with information about taxable income
B) to provide management with information useful for planning and control of operations
C) to provide banks and other creditors with information useful in making credit decisions
D) to provide existing shareholders and potential investors with useful information for decision making

Question 29

Which of the following reflects all three of the key aspects of the Triple Bottom Line?

A) measures of employees, customers, and suppliers
B) measures of social, financial, and environmental impact
C) measures of assets, liabilities, and equity of the organization
D) measures of revenues, expenses, and profit of the organization

Question 30

Which employee would normally occupy a staff position?

A) an assembly worker
B) the factory manager
C) the cost accounting manager
D) the vice president of operations

Question 31

What is an example of the management activity referred to as planning?

A) upgrading outdated equipment
B) outsourcing the organization's payroll processing
C) developing a strategy to dispose of hazardous waste
D) deciding to eliminate an unprofitable segment of an organization

Question 32

According to M. E. Porter, which of the following reflects support activities in the value chain?

A) inbound logistics, operations, outbound logistics, marketing and sales, service
B) procurement, inbound logistics, operations, outbound logistics, marketing and sales, service
C) procurement, technology development, human resources management, developing infrastructure
D) technology development, human resources management, operations, developing infrastructure

Question 33

Which employee would normally occupy a line position?

A) the treasurer
B) the controller
C) the purchasing manager
D) the vice-president of marketing

Question 34

Which employee would normally occupy a line position in a hospital?

A) a staff nurse
B) the chief of surgery
C) a hospital administrator
D) the manager of the cafeteria

Question 35

Which of the following is a characteristic of managerial accounting?

A) It has no mandatory rules.
B) It must adhere to mandatory rules.
C) Its main users are outside of the organization.
D) It provides only objective financial information.

Question 36

Which statement best describes managerial accounting reports?

A) The reports are prepared to meet the needs of decision makers within the firm.
B) The reports are prepared for external shareholders, lenders, and tax authorities.
C) The reports are prepared according to International Financial Reporting Standards (IFRS).
D) The reports are prepared according to guidelines prepared by the Ontario Securities Commission (OSC).

Question 37

Which statement best describes financial accounting?

A) It is internally focused.
B) It has an emphasis on the future.
C) It has no regulatory or mandatory rules.
D) It is concerned with information about the organization as a whole.

Question 38

Which term refers to the progress of new products through the stages of conception, introduction into the market, growth, maturity, decline, and eventual withdrawal from a market?

A) product life cycle
B) value chain analysis
C) strategic positioning
D) continuous improvement

Question 39

What is an objective of managerial accounting?

A) to comply with international reporting standards
B) to prepare external reports for investors, creditors, government agencies, and other outside users
C) to provide tax information for planning, controlling, evaluating, and continuous improvement
D) to provide information for the costing of services, products, and other objects of interest to management

Question 40

Which statement best describes activity-based costing?

A) It results in higher revenues.
B) It is a traditional costing method.
C) It encourages efficiency and customer value.
D) It always results in a lower cost assigned to goods or services.

Question 41

Explain the term professional competence.

Question 42

Select the appropriate definition for each of the items listed below.a.Financial accounting
b.Managerial accounting
c.Planning
d.Controlling
e.Decision making
f.Value chain
g.Continuous improvement
h.Line positions
i.Time
j.Total quality management
k.Lean accounting
l.Staff positions
m.Controller
n.Treasurer
o.Ethical behaviour
Positions that have direct responsibility for the basic objectives of an organization

Question 43

Explain the term professional behaviour.

Question 44

Select the appropriate definition for each of the items listed below.a.Financial accounting
b.Managerial accounting
c.Planning
d.Controlling
e.Decision making
f.Value chain
g.Continuous improvement
h.Line positions
i.Time
j.Total quality management
k.Lean accounting
l.Staff positions
m.Controller
n.Treasurer
o.Ethical behaviour
The set of activities required to design, develop, produce, market, and deliver products and services to customers

Question 45

Select the appropriate definition for each of the items listed below.a.Financial accounting
b.Managerial accounting
c.Planning
d.Controlling
e.Decision making
f.Value chain
g.Continuous improvement
h.Line positions
i.Time
j.Total quality management
k.Lean accounting
l.Staff positions
m.Controller
n.Treasurer
o.Ethical behaviour
A management activity that involves the detailed formulation of action to achieve a particular end

Question 46

Explain the term objectivity.

Question 47

Select the appropriate definition for each of the items listed below.a.Financial accounting
b.Managerial accounting
c.Planning
d.Controlling
e.Decision making
f.Value chain
g.Continuous improvement
h.Line positions
i.Time
j.Total quality management
k.Lean accounting
l.Staff positions
m.Controller
n.Treasurer
o.Ethical behaviour
A type of accounting that is primarily concerned with producing information for external users

Question 48

Select the appropriate definition for each of the items listed below.a.Financial accounting
b.Managerial accounting
c.Planning
d.Controlling
e.Decision making
f.Value chain
g.Continuous improvement
h.Line positions
i.Time
j.Total quality management
k.Lean accounting
l.Staff positions
m.Controller
n.Treasurer
o.Ethical behaviour
Searching for ways to increase the overall efficiency and productivity of activities by reducing waste, increasing quality, and reducing costs

Question 49

Select the appropriate definition for each of the items listed below.a.Financial accounting
b.Managerial accounting
c.Planning
d.Controlling
e.Decision making
f.Value chain
g.Continuous improvement
h.Line positions
i.Time
j.Total quality management
k.Lean accounting
l.Staff positions
m.Controller
n.Treasurer
o.Ethical behaviour
Organizing costs according to the value chain and collecting both financial and nonfinancial information

Question 50

According to the Rules of Professional conduct of CPA Ontario, what are the five fundamental principles of ethics?

Question 51

Which of the following currently exists as a professional accounting body in Canada?

A) CA Canada
B) CPA Canada
C) CGA Canada
D) CMA Canada

Question 52

Select the appropriate definition for each of the items listed below.a.Financial accounting
b.Managerial accounting
c.Planning
d.Controlling
e.Decision making
f.Value chain
g.Continuous improvement
h.Line positions
i.Time
j.Total quality management
k.Lean accounting
l.Staff positions
m.Controller
n.Treasurer
o.Ethical behaviour
A management philosophy in which manufacturers strive to create an environment that will enable workers to manufacture perfect (zero-defect) products

Question 53

Virtually all managerial accounting practices were developed to assist managers with which of the following?

A) determining costs
B) maximizing profits
C) generating tax reports
D) creating annual reports

Question 54

Which statement best describes the controller of an organization?

A) They generally have no influence in policies and decisions.
B) They can have significant input into policies and decisions.
C) They typically set operating policy within the organization.
D) They typically have authority over managers in the production area.

Question 55

Which of the following involves choosing actions that are right, proper, and just?

A) balanced costing
B) ethical behaviour
C) activity-based costing
D) cross-functional perspective

Question 56

Select the appropriate definition for each of the items listed below.a.Financial accounting
b.Managerial accounting
c.Planning
d.Controlling
e.Decision making
f.Value chain
g.Continuous improvement
h.Line positions
i.Time
j.Total quality management
k.Lean accounting
l.Staff positions
m.Controller
n.Treasurer
o.Ethical behaviour
The process of choosing among competing alternatives

Question 57

According to the Rules of Professional Conduct of CPA Ontario, what are the fundamental principles of ethics?

A) reputation, professionalism, authority, judgement, conflict of interest
B) professionalism, public interest, integrity and due care, confidentiality, conflict of interest
C) professional behaviour, integrity and due care, professional competence, confidentiality, objectivity
D) professional behaviour, integrity and due care, professional competence, confidentiality, subjectivity

Question 58

Select the appropriate definition for each of the items listed below.a.Financial accounting
b.Managerial accounting
c.Planning
d.Controlling
e.Decision making
f.Value chain
g.Continuous improvement
h.Line positions
i.Time
j.Total quality management
k.Lean accounting
l.Staff positions
m.Controller
n.Treasurer
o.Ethical behaviour
The provision of accounting information for a company's internal users

Question 59

Select the appropriate definition for each of the items listed below.a.Financial accounting
b.Managerial accounting
c.Planning
d.Controlling
e.Decision making
f.Value chain
g.Continuous improvement
h.Line positions
i.Time
j.Total quality management
k.Lean accounting
l.Staff positions
m.Controller
n.Treasurer
o.Ethical behaviour
A crucial element in all phases of the value chain

Question 60

Select the appropriate definition for each of the items listed below.a.Financial accounting
b.Managerial accounting
c.Planning
d.Controlling
e.Decision making
f.Value chain
g.Continuous improvement
h.Line positions
i.Time
j.Total quality management
k.Lean accounting
l.Staff positions
m.Controller
n.Treasurer
o.Ethical behaviour
The managerial activity of monitoring a plan's implementation and taking corrective action as needed

Question 61

Select the appropriate definition for each of the items listed below.a.Financial accounting
b.Managerial accounting
c.Planning
d.Controlling
e.Decision making
f.Value chain
g.Continuous improvement
h.Line positions
i.Time
j.Total quality management
k.Lean accounting
l.Staff positions
m.Controller
n.Treasurer
o.Ethical behaviour
Choosing actions that are right, proper, and just

Question 62

Select the appropriate definition for each of the items listed below.a.Financial accounting
b.Managerial accounting
c.Planning
d.Controlling
e.Decision making
f.Value chain
g.Continuous improvement
h.Line positions
i.Time
j.Total quality management
k.Lean accounting
l.Staff positions
m.Controller
n.Treasurer
o.Ethical behaviour
The individual responsible for the finance function; raises capital and manages cash and investments

Question 63

Select the appropriate definition for each of the items listed below.a.Financial accounting
b.Managerial accounting
c.Planning
d.Controlling
e.Decision making
f.Value chain
g.Continuous improvement
h.Line positions
i.Time
j.Total quality management
k.Lean accounting
l.Staff positions
m.Controller
n.Treasurer
o.Ethical behaviour
The chief accounting officer in an organization

Question 64

Select the appropriate definition for each of the items listed below.a.Financial accounting
b.Managerial accounting
c.Planning
d.Controlling
e.Decision making
f.Value chain
g.Continuous improvement
h.Line positions
i.Time
j.Total quality management
k.Lean accounting
l.Staff positions
m.Controller
n.Treasurer
o.Ethical behaviour
Positions that are supportive in nature and have only indirect responsibility for an organization's basic objectives