Deck 1: The Role of Accounting Information in Management Decision Making

Question 1

If ethical standards are not adhered to

A)it would have little impact on a typical management accountant.
B)there would be no undesirable consequences.
C)it would have little impact on advanced market economies.
D)there would be undesirable consequences.

Answer 1

D

Question 2

When carrying out directing and motivating activities, managers rely on feedback to ensure that the plan is actually carried out and is appropriately modified as circumstances change.

Answer 2

False

Question 3

Management accounting is concerned with providing information to creditors and others outside of an organisation.

Answer 3

False

Question 4

The organisation chart

A)shows lines of authority within an organisation.
B)shows whether or not the organisation is decentralised.
C)shows both formal and informal channels of communication between managers.
D)none of these.

Question 5

Large batches are desirable because they minimise work in process inventories.

Question 6

When carrying out controlling activities, managers rely on feedback to ensure that the plan is actually carried out and is appropriately modified as circumstances change.

Question 7

Financial and managerial accounting are similar in that both

A)are mandatory.
B)involve summarising financial data.
C)emphasise the relevance and flexibility of data.
D)emphasise the organisation as a whole.

Question 8

Management accounting primarily is concerned with providing

A)information to managers inside the organisation as well as information to stockholders, creditors, and others outside the organisation.
B)information to stockholders, creditors, and others outside the organisation.
C)information to managers inside the organisation.
D)information to governmental regulatory agencies.

Question 9

Reductions in trade barriers

A)do not help companies to expand.
B)reduce the risk of business failure.
C)are good for all companies.
D)help agile and aggressive companies to expand.

Question 10

Budgets are a formal expression of management's plans.

Question 11

When carrying out their planning activities, managers mobilise the organisation's human and other resources so that the organisation's plans can be carried out.

Question 12

Management accounting is governed by generally accepted accounting principles (GAAP).

Question 13

A performance report typically compares budgeted data to actual data.

Question 14

Successful implementation of JIT should result in resources being freed up for more productive uses.

Question 15

In a decentralised organisation, most decisions are made by top management.

Question 16

In decision making, managers use

A)financial accounting information exclusively since it is more objective and precise due to well-established principles and conventions.
B)information regarding the organisation as a whole rather than segments of the organisation in order to capture a broader perspective of the company's operations.
C)information that is as precise as humanly possible.
D)whatever information is relevant to the decision even though the information may not conform to generally accepted accounting principles.

Question 17

CIMA is

A)generally not involved in ethical issues.
B)not involved in transfer pricing issues.
C)recommends that accountants focus on short term performance.
D)responsible for monitoring and enforcing professional ethics.

Question 18

Financial accounting

A)is required by regulatory bodies such as the SEC.
B)has its primary emphasis on the future.
C)provides data primarily for internal uses by managers.
D)is concerned primarily with the performance of segments rather than with the performance of the entire organisation.

Question 19

The managerial accounting reports of a company would be of most interest and benefit to the company's

A)bankers.
B)shareholders.
C)bondholders.
D)director of manufacturing.

Question 20

The focus of management accounting is on the past, since historical cost data are generally accurate and reliable.

Question 21

The impact of international competition has

A)made many management accounting systems obsolete over time.
B)made little impact on the work of management accountants.
C)made it difficult for companies to expand.
D)created few opportunities for management accountants to work in other countries.

Question 22

Global competition:

A)is mainly a problem for companies in Europe and the US.
B)can come from unexpected sources.
C)is not having an impact on the quality of goods.
D)can be a benefit for companies.

Question 23

Delegating decisions to lower levels of management results in increased

A)profitability.
B)centralisation.
C)control.
D)decentralisation.

Question 24

One of these is not a feature of a decentralised organisation

A)tighter control at the top.
B)quicker decision making.
C)better training ground for new managers.
D)greater motivation for division managers.

Question 25

Directing and motivating does not involve one of the following:

A)Setting targets for different areas of business.
B)Setting targets for different individuals.
C)Planning for the future.
D)Keeping the organisation functioning smoothly.

Question 26

The process of overseeing day-to-day activities and keeping the organisation functioning smoothly is called

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

Question 27

The key to control is

A)feedback.
B)feeders.
C)actual figures.
D)budgeted figures.

Question 28

Planning does not involve one of the following:

A)Identifying alternatives.
B)Learning from the past.
C)Expressing things formally in budgets.
D)Keeping the organisation functioning smoothly.

Question 29

Non-monetary data can be very useful for management accounting.

Question 30

A line position is one that is directly related to the achievement of the basic objectives of an organisation.

Question 31

An organisation chart does not show

A)staff and line positions.
B)areas of responsibility for each manager.
C)formal lines of authority between managers.
D)informal lines of communication.

Question 32

One of the following is not a feature of EasyJet's innovative business model.

A)use of the internet.
B)ticketless travel.
C)rapid turnaround times.
D)better in-flight meals.

Question 33

Financial accounting suffered in the latter part of the 20th Century due to the emphasis on management accounting.

Question 34

Which of these is not a threat from globalisation?

A)The increasing use of English as the language of business
B)Freer movement of goods.
C)Companies expanding out of their home markets.
D)The internet.
E)None of these
F)All of these

Question 35

The informal organisational structure plays no real part in the management of a decentralised organisation.

Question 36

Which of these is not an opportunity from globalisation?

A)The increasing use of English as the language of business.
B)Freer movement of goods.
C)Companies expanding out of their home markets.
D)The internet.
E)None of these
F)All of these

Question 37

If a forecast cannot be made with any accuracy then it should not be made.

Question 38

When opening two major stores at one time in two quite different countries you will not find one of the following:

A)Stretched resources.
B)Cultural differences.
C)Budgeted figures quite different from actual.
D)Market conditions and tastes exactly the same.

Question 39

The quality of a company's management accounting system is irrelevant to a company's success.

Question 40

One of these is not a cause of globalisation:

A)Increase in the barriers to free trade
B)The rise of India and China
C)Increased sophistication in financial markets
D)The internet

Question 41

Outline the affect that JIT has had on stocks in manufacturing firms around the world.

Question 42

The pace of innovation in the business world has been easy for employees to deal with.

Question 43

The pace of innovation in the business world has been easy for businesses to deal with.

Question 44

The pace of innovation in the business world has been good for consumers.

Question 45

One of the following is not a recent development in management accounting:

A)PQR
B)Theory of constraints
C)TQM
D)JIT

Question 46

Outline the history of management accounting succinctly. What was the impact on the management accounting practices of the increased importance of financial accounting at the start of the 20th Century? What factors, in your opinion have lead to the management accounting resurgence in the last 20-25 years?

Question 47

With regards to sustainability issues, managers concentrating on shareholder value should NOT be concerned by one of the following.

A)Costs
B)What their fellow managers think about them
C)Compliance
D)Strategy

Question 48

Would it be true to say that management accounting practices are the same all over the world?

Question 49

Would you see globalisation as a threat or as an opportunity to a small engineering firm, say in South Wales? In what ways could the firm set out to ensure survival?

Question 50

'Shared service centres' are normally places of worship used by more than one religious body.

Question 51

Ethical standards have nothing to contribute to profitable business practice.

Question 52

Outsourcing has declined over the last 20-25 years.

Question 53

Service industries provide different challenges for management accounting than do manufacturing industries.