Deck 1: The Manager and Management Accounting

Question 1

Financial accounting is concerned primarily with ________.

A)external reporting to investors,creditors,and government authorities
B)cost planning and cost controls
C)product design and marketing strategies
D)providing information for strategic and tactical decisions

Answer 1

A

Question 2

Which of the following groups would be least likely to receive detailed management accounting reports?

A)stockholders
B)sales managers
C)production supervisors
D)distribution managers

Answer 2

A

Question 3

Financial accounting provides a historical perspective,whereas management accounting emphasizes ________.

A)the future
B)past transactions
C)a current perspective
D)reports to shareholders

Answer 3

A

Question 4

A data warehouse or infobarn ________.

A)is reserved for exclusive use by the CFO
B)is primarily used for financial reporting purposes
C)stores information used by different managers for multiple purposes
D)gathers only nonfinancial information

Question 5

Which of the following differentiates cost accounting and financial accounting?

A)The primary users of cost accounting are the investors,whereas the primary users of financial accounting are the managers.
B)Cost accounting deals with product design,production,and marketing strategies,whereas financial accounting deals mainly with pricing of the products.
C)Cost accounting measures only the financial information related to the costs of acquiring fixed assets in an organization,whereas financial accounting measures financial and nonfinancial information of a company's business transactions.
D)Cost accounting measures information related to the costs of acquiring or using resources in an organization,whereas financial accounting measures a financial position of a company to investors,banks,and external parties.

Question 6

Cost accounting ________.

A)measures the costs of acquiring or using resources in an organization
B)measures the financial and nonfinancial information that helps managers make decisions to fulfill the goals of an organization
C)coordinates product design,production,and marketing decisions and evaluate a company's performance
D)communicates information to investors,banks,regulators,and other outside parties

Question 7

Management accounting information typically includes ________.

A)tabulated results of customer satisfaction surveys
B)the cost of producing a product
C)the percentage of units produced that are defective
D)All of these answers are correct.

Question 8

Management accounting ________.

A)focuses on estimating future revenues,costs,and other measures to forecast activities and their results
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

Question 9

The primary user of management accounting information is a(n)________.

A)the controller
B)a shareholder evaluating a stock investment
C)bondholder
D)external regulator

Question 10

Which of the following is true of management accounting information?

A)It focuses on documenting past business actions of a firm.
B)It is prepared based on SEC rules and FASB accounting principles.
C)It is prepared for shareholders.
D)It helps with the coordination of elements of the value chain.

Question 11

Which of the following would most likely be the user of financial accounting information?

A)factory shift supervisor
B)distribution manager
C)current shareholder
D)department manager

Question 12

Managers use management accounting information to ________.

A)help external users such as investors,banks,regulators,and suppliers
B)communicate,develop,and implement strategies
C)communicate a firm's financial position to investors,banks,regulators,and other outside parties
D)ensure that financial statements are consistent with the SEC rules

Question 13

Rules for measurement and reporting for management accounting ________.

A)state that information must only be useful to management.
B)do not need to follow GAAP but must meet the cost-benefit test.
C)must follow GAAP.
D)must follow GAAP,IRS rules or government standards.

Question 14

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

Question 15

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 manager's compensation on reported financial results.

Question 16

Which of the following deals with management accounting?

A)identifying the costs of acquiring the resources of the company
B)developing budgets
C)preparing the income statement
D)preparing the statement of cash flows

Question 17

Financial accounting provides the primary source of information for ________.

A)decision making in the assembly and finishing department
B)improving distribution and customer service
C)preparing the income statement for shareholders and other external parties
D)planning next year's plans and specifically;the operating budget

Question 18

Financial accounting ________.

A)focuses on the future and includes activities such as preparing next year's operating budget
B)must comply with GAAP (generally accepted accounting principles)
C)is the process of measuring,analyzing,and reporting financial and nonfinancial information related to the costs of acquiring or using resources in an organization
D)is prepared for the use of department heads and other employees

Question 19

Which of the following is true of financial accounting information?

A)It is prepared based on cost-benefit analysis.
B)It is primarily used by managers to make internal business decisions.
C)It focuses on the past-oriented financial performance of a company.
D)It only measures the cash transactions of a company.

Question 20

Which of the following is true of cost accounting?

A)It is a subset of management accounting and therefore its information is used only to meet the needs of managers.
B)It is used only by manufacturers.
C)It is part of both management and financial accounting systems.
D)The distinction between management accounting and cost accounting is clear-cut.

Question 21

Financial accounting information focuses on internal reporting.

Question 22

Management accounting ensures communication of an organization's financial position to investors,banks,and regulators.

Question 23

Which of the following statements concerning an organization's strategy is true?

A)Strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives.
B)Cost accountants formulate strategy in an organization since they have more inputs about costs.
C)A good strategy will always overcome poor implementation.
D)Businesses usually follow one of two broad strategies: offering a quality product at a high price,or offering a unique product or service priced lower than the competition.

Question 24

Cost accounting measures and reports short-term,long-term,financial,and non financial information.

Question 25

Cost accounting provides information for both management accounting and financial accounting professionals.

Question 26

Management accounting information and reports do not have to follow set principles or rules such as GAAP but should be useful to its audience and meet the cost/benefit test.

Question 27

Financial accounting is broader in scope than management accounting in that financial accounting can include external reporting and reporting that helps managers plan and control operations.

Question 28

Describe management accounting and financial accounting.

Question 29

Cost accounting is the process of measuring,analyzing,and reporting financial and nonfinancial information related to the costs of acquiring or using resources in an organization.

Question 30

For each report listed below,identify whether the major purpose of the report is for (1)routine internal reporting, (2)nonroutine internal reporting,or for (3)external reporting to investors and other outside parties.
Item:
a.study detailing sale information of the top-ten selling products
b.weekly report of total sales generated by each store in the metropolitan area
c.annual Report sent to shareholders
d.monthly report comparing budgeted sales by store to actual sales

Question 31

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

Question 32

Management accounting report time spans can vary from one hour to many years,while financial accounting report time periods usually span a quarter or a year.

Question 33

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

Question 34

Management accounting has to strictly follow the rules of generally accepted accounting principles for the purposes of measurement and reporting.

Question 35

The balance sheet and income statement are primarily management accounting reports.

Question 36

For management accounting,internal measurement and reporting are based on cost-benefit analysis.

Question 37

There is an overlap or intersection between management accounting and financial accounting.Explain.

Question 38

Cost accounting provides information for both management accounting and financial accounting professionals.Explain.

Question 39

Cost management not only helps reduce costs but also improve customer satisfaction and the quality of a firm's products.

Question 40

Financial accounting provides an organization's past-oriented information such as the previous years' financial statements.

Question 41

Management accountants work closely with managers in various departments to formulate strategies by providing information about the sources of competitive advantage.

Question 42

The two broad strategies that companies follow are cost leadership strategy and product differentiation strategy.

Question 43

Strategic cost management describes cost management that specifically focuses on strategic issues.

Question 44

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 45

A company's strategy specifies how an organization matches its capabilities with the opportunities in the marketplace.

Question 46

The best-designed strategies and the best-developed capabilities are useless unless they are effectively executed.

Question 47

Strategy is formulated ________.

A)by identifying the most important customers
B)by forecasting the composition of adequate fixed assets
C)based on the qualified opinion of external auditors
D)by eliminating sunk costs

Question 48

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 49

Briefly describe the list of items that managers undertake to formulate strategies.

Question 50

Companies can decide on an appropriate strategy based strictly on internally available information.

Question 51

What is strategy? Briefly describe the two broad types of strategies that companies may choose to pursue.

Question 52

In designing strategy,a company must match its opportunities in the marketplace with ________.

A)environmental friendly goals
B)its resources and capabilities
C)branding opportunities
D)the requirements of credit rating agencies

Question 53

Which of the following statements about customer value is true?

A)Customer value is shown in a corporation's balance sheet.
B)Creating value for customers is an important part of planning and implementing strategy.
C)Customer value is the only focus that helps managers to formulate strategies.
D)Customer value is lost with increase in costs of the product.

Question 54

The key to a company's success is creating value for customers while differentiating itself from its competitors.

Question 55

Which of the following is not a concern for management accountants in formulating a strategy?

A)identifying the most important warehouse location for the distribution of goods
B)substituting products that exist in the marketplace
C)strategizing compliance with GAAP (Generally Accepted Accounting Principles)
D)maintaining adequate fixed assets available to implement the strategy

Question 56

Identifying a company's most important customers helps to formulate a strategy.

Question 57

Describe the major differences between management accounting and financial accounting for the following:
1.Primary users
2.Focus and emphasis
3.Rules of measurement and reporting

Question 58

Management accountants should have little or no role in deciding on a company's strategy.

Question 59

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

Question 60

The best-designed strategies are valuable,whether or not they are effectively implemented.

Question 61

New-product development time is the time taken to ________.

A)test the prototype and start the large scale production of a product
B)design and develop the prototype product
C)create new products and bring them to market
D)improvise existing products and re-launch them to market

Question 62

Production is the ________.

A)generation of,and experimentation with,ideas related to new products,services,or processes
B)processing orders and shipping products or services to customers
C)acquisition,coordination,and assembly of resources to produce a product or deliver a service
D)detailed planning and engineering of products,services,or processes

Question 63

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

A)the value chain
B)benchmarking
C)customer relationship management
D)the supply chain

Question 64

________ aims to improve operations throughout the value chain and to deliver products and services that exceed customer expectations.

A)Total Quality Management
B)Innovation
C)Customer response time
D)Cost and efficiency

Question 65

________ describes 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)Production process
C)Quality control
D)Customer relationship management

Question 66

________ 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

Question 67

That part of the value chain that includes ordering and shipping the product to retail outlets is ________.

A)Customer service
B)Production
C)Marketing
D)Distribution

Question 68

Processing orders and shipping products or providing services to customers is known as ________.

A)after-sales services
B)distribution
C)marketing
D)supply chain

Question 69

________ is the detailed planning and engineering and testing of products,services,or processes.

A)Plan of implementation
B)Design
C)Production
D)Research and development

Question 70

Which of the following statements about a company's supply chain is true?

A)A company's supply chain is always internal to a firm.
B)A company's supply chain is always external to a firm.
C)A company's supply chain is the same thing as a company's value chain.
D)Management accountants provide information to enhance a company's supply chain.

Question 71

The ________ function supports the six functions of value-chain analysis.

A)controlling
B)administration
C)planning
D)direction

Question 72

The value chain is the sequence of business functions in which ________.

A)value is deducted from the products or services of an organization
B)producing and delivering the product or service is of prime importance
C)products and services are evaluated with respect to their value to the supply chain
D)usefulness is added to the products or services of an organization

Question 73

Place the four business functions in the order they appear along the value chain:

A)Customer Service,Design,Production,Marketing
B)Customer Service,Marketing,Production,Design
C)Design,Production,Marketing,Customer Service
D)Design,Customer Service,Production,Marketing

Question 74

Which of the following is an area that customers want to see improved levels of performance?

A)higher sales margin
B)quality of the product
C)lower marginal costs
D)profit margins

Question 75

________ is a strategy that integrates people and technology in all business functions to enhance relationships with customers,partners,and distributors.

A)Supply-chain analysis
B)Customer relationship management
C)Value-chain analysis
D)Continuous quality improvement

Question 76

Customer relationship management initiatives use technology to coordinate all ________.

A)advertising and marketing techniques to attract customers
B)research activities
C)customer-facing activities
D)quality control management activities

Question 77

________ 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

Question 78

Which of the following differentiates marketing from customer service?

A)Marketing is the process of promoting and selling products or services to customers or prospective customers,whereas customer service is the process of providing after-sales service to customers.
B)Marketing is the process of processing orders and shipping products or services to customers,whereas customer service is the process of providing additional information to customers about the product.
C)Marketing is the process of detailed planning,engineering,and testing of products and processes,whereas customer service concentrates on existing customers.
D)Marketing is the process of processing orders and shipping products or services to customers,whereas customer service is concerned with choosing the right customer for the product.

Question 79

When managers determine whether it is less expensive to buy products from a vendor or make them in house they are performing ________.

A)Cost-benefit analysis
B)Supply-chain analysis
C)Value-chain analysis
D)Research and development

Question 80

________ is an after-sale support provided to customers.

A)Distribution
B)Customer service
C)Production
D)Marketing