Deck 1: Introduction to Managerial Accounting

Question 1

Which of the following statements is not true regarding enterprise resource planning (ERP)?

A) It integrates traditional accounting information systems with other information systems.
B) It can be customized to provide specific and relevant information to different types of users.
C) It has evolved in the past few years to address the shortcomings of traditional accounting information systems.
D) It captures quantitative but not qualitative information.

Answer 1

D

Question 2

An example of quantitative data is:

A) company reputation.
B) number of customer complaints.
C) Employee satisfaction.
D) product quality.

Answer 2

B

Question 3

An example of qualitative data is:

A) warranty claims.
B) customer satisfaction.
C) net income.
D) budgeted hours.

Answer 3

B

Question 4

____ involve(s) the development of short-terms objectives and goals.

A) Controlling activities
B) Strategic planning
C) Operational planning
D) Financial activities

Question 5

A company's decision on where to locate a new factory is most likely a result of:

A) operating activities.
B) operational planning.
C) strategic planning.
D) controlling activities.

Question 6

____ addresses long-term questions of how a company distinguishes itself from its competitors.

A) Operational planning
B) Strategic planning
C) Internal planning
D) Financial planning

Question 7

____ decides how much inventory should be kept on hand by the business.

A) Finance manager
B) Operations/production manager
C) Marketing manager
D) Human resource manager

Question 8

Which manager activity would address the decision on whether or not to accept a special order within the next few days?

A) Sales activity
B) Strategic planning activity
C) Operating activity
D) Controlling activity

Question 9

ERP systems capture:

A) only qualitative data.
B) only quantitative data.
C) both qualitative and quantitative data.
D) the same information as traditional accounting information systems.

Question 10

Which of the following is not true about knowledge in the business environment?

A) It is the same as data or information.
B) It is the value added from shared information.
C) It includes both quantitative and qualitative information.
D) It must be managed in order for a company to remain competitive.

Question 11

The main focus of managerial accounting is:

A) decision making.
B) the preparation of financial statements.
C) the preparation of budgets.
D) documenting cash flows.

Question 12

Which of the following is not one of the three primary activities of managers?

A) Budgeting activities
B) Planning activities
C) Operating activities
D) Controlling activities

Question 13

Which of the following statements is true?

A) External and internal users of accounting information have exactly the same information needs.
B) Financial accounting is less flexible than managerial accounting.
C) Managerial accounting provides the best information to external users.
D) Managerial accounting emphasizes on the organization as a whole more than financial accounting.

Question 14

Which of the following is an example of an internal user of accounting information?

A) Suppliers
B) Creditors
C) Managers
D) Federal tax agency

Question 15

Decision-makers should consider:

A) only qualitative factors.
B) only quantitative factors.
C) both quantitative and qualitative factors.
D) only sunk costs.

Question 16

All of the following are examples of operating activities except:

A) decisions on whether or not to schedule overtime for employees.
B) decisions on what price to charge for a product.
C) decisions on whether or not to accept a special order.
D) decisions on whether actual outcomes were similar to desired outcomes.

Question 17

____ decides whether a company should borrow money or issue stock as a way to raise capital.

A) Human resource manager
B) Operations/production manager
C) Finance manager
D) Marketing manager

Question 18

Which of the following is true regarding managerial accounting?

A) It often emphasizes on segments rather than the organization as a whole.
B) It must be prepared as according to generally accepted accounting principles.
C) Its primary focus is on providing information to external users.
D) It is less flexible than financial accounting.

Question 19

Which of the following is not an example of an external user of accounting information?

A) Potential and existing stockholders
B) Government taxing agencies
C) Potential and existing creditors
D) Management

Question 20

Which of the following is a characteristic of managerial accounting?

A) It is used primarily by external users.
B) It often lacks flexibility.
C) It is often future-oriented.
D) The information it provides is extremely precise.

Question 21

You are now considering your housing options for next semester. If the cost of a dorm room and the cost of an apartment are the same, but the apartment is larger, then:

A) both cost and size are relevant.
B) neither cost nor size is relevant.
C) cost is relevant but size is not.
D) size is relevant but cost is not.

Question 22

The primary role of today's managerial accountant is to:

A) enter data into the accounting system.
B) collect data.
C) analyze information and create knowledge.
D) prepare tax returns.

Question 23

Relevant costs are costs that:

A) do not differ between alternatives.
B) may not be eliminated by choosing one alternative over another.
C) have already been incurred.
D) differ between alternatives.

Question 24

A(n) ____ would most likely be in charge of deciding on the type of benefit package an employee receives.

A) Finance manager
B) Operations/production manager
C) Human resource manager
D) Marketing manager

Question 25

Costs that differ between alternatives are called:

A) sunk costs.
B) irrelevant costs.
C) relevant costs.
D) unavoidable costs.

Question 26

You are now considering your housing options for next semester. If the cost of a dorm room and the cost of an apartment are exactly the same, housing costs are:

A) sunk costs.
B) an opportunity cost.
C) not relevant.
D) avoidable.

Question 27

Relevant costs:

A) are sunk costs.
B) are costs that differ among alternatives.
C) are unavoidable.
D) can not be opportunity costs.

Question 28

Sunk costs are:

A) opportunity cost.
B) costs that will occur in the future.
C) not relevant.
D) costs that can be avoided.

Question 29

Which of the following statements about decision-making is true?

A) Risk should not be taken into account.
B) Objectives should be quantitative and not qualitative.
C) Opportunity cost should be considered.
D) Sunk costs should usually be taken into account.

Question 30

Which of the following statements is true regarding ethics in decision-making?

A) Since most business decisions are simply a matter of economics, ethical considerations should be ignored.
B) Decision-making can have an ethical as well as an economic impact.
C) Managerial accountants do not face ethical issues.
D) Business managers will always agree on ethical choices.

Question 31

____ would most likely be involved in product packaging decisions.

A) Marketing manager
B) Operations/production manager
C) Finance manager
D) Human resource manager

Question 32

Mary Ann is trying to decide whether to fly to Florida or New York. The cost of her ticket will be the same either way. The cost of the ticket is an example of:

A) sunk cost.
B) opportunity cost.
C) avoidable cost.
D) irrelevant cost.

Question 33

Which of the following is not true with regard to opportunity costs?

A) They are the benefits forgone by selecting one alternative over another.
B) They are relevant.
C) They are sometimes difficult to quantify.
D) They have already occurred in the past.

Question 34

In the decision-making process, an example of a quantitative measure would include:

A) employee morale.
B) product satisfaction.
C) customer service.
D) number of pounds needed.

Question 35

____ decides whether or not a company should lease or buy an expensive manufacturing equipment.

A) Operations/production manager
B) Human resource manager
C) Finance manager
D) Marketing manager

Question 36

Which of the following would be an irrelevant cost?

A) Future costs that differ among alternatives.
B) Benefits foregone by choosing one alternative over another.
C) Costs that have already been incurred.
D) Costs that are avoidable.

Question 37

Which of the following should not be taken into account in decision-making?

A) Risk
B) Ethical considerations
C) Irrelevant costs
D) Opportunity costs

Question 38

When making a decision, which of the following should not be considered?

A) Relevant costs
B) Opportunity costs
C) Sunk costs
D) Risk

Question 39

A(n) ____ would most likely decide whether or not employees need to work overtime in order to fill a special order.

A) Human resource manager
B) Operations/production manager
C) Finance manager
D) Marketing manager

Question 40

You are considering your housing options for next semester. The cost of a dorm room and the cost of an apartment are the same. You paid a $50 non-refundable deposit to live in the dorm last year. This deposit is an example of a(n):

A) opportunity cost.
B) relevant cost.
C) sunk cost.
D) avoidable cost.

Question 41

Managers are responsible for numerous activities including planning, operating, and controlling.
Define these three types of activities and provide at least one example of each.

Question 42

How has the automation of accounting information altered the role of the managerial accountant?

Question 43

Select one of the following functional managers and discuss how they might use accounting information in their managerial role: marketing manager, operations/production manager, human resource manager, or finance manager.

Question 44

A friend has informed you of a part-time job for which you are well-qualified. It would begin next semester and require working 20 hours a week at a rate of $35 per hour. You would have to commute 2 hours round trip four days a week to work. You have already registered for 18 credit hours (6 classes) next semester, and you have been told that each of the classes is very demanding, requiring projects and extensive study time. If you complete these 18 hours, you will graduate. You are only taking 12 credit hours this semester. You have enough money for tuition ($100 per credit hour) and room and board but would love some extra spending money.
Required:

Question 45

You are trying to decide what to do during your next school break. One campus group is planning a trip to Jacksonville Beach. Another is planning a ski trip to Snowmass. Many students will be going home to see family, and others will remain on campus. List three factors that you might consider in making your decision.

Question 46

Select one of the following functional managers and provide an example of the type of accounting information that they might request from the managerial accountant: marketing manager, operations/production manager, human resource manager, or finance manager.

Question 47

Accounting information systems generate both monetary and non-monetary accounting information. List two examples of eachtype of accounting information.

Question 48

Identify four internaland external users of accounting information. Provide a specific example of how accounting information might be used by each.

Question 49

Discuss how a managerial accounting report prepared for an internal user might differ from a financial accounting report prepared for an external user.

Question 50

Grant Enterprises is considering the introduction of a new product. The marketing and production departments have begun informal discussions about its design, production, and sales. List three examples of accounting information that the marketing and production managers would find useful in their meeting.

Question 51

You and your roommate would like to purchase a projection TV for your apartment. You have gathered the following information about the two leading models:
You paid $150 for your current TV two years ago.
Required:

Question 52

Describe the role of the managerial accountant within an organization.