Deck 1: Managerial Accounting and the Business Environment

Question 1

The Statement of Ethical Professional Practice promulgated by the Institute of Management Accountants specifically states,among other things,that management accountants have a responsibility to inform responsible journalists of any wrongdoing they uncover in the organization.

Answer 1

False

Question 2

A strategy is a game plan that enables a company to attract customers by mimicking what successful competitors do.

Answer 2

False

Question 3

The controller occupies a staff position in an organization.

Answer 3

True

Question 4

Which of the following statements is TRUE concerning the CMA?

A)To earn the CMA,an examination must be passed.
B)Experience in the accounting field is not necessary to earn the CMA.
C)Compliance with the Institute of Management Accountants' Statement of Ethical Professional Practice is not necessary to earn the CMA.
D)Both B and C above.

Question 5

Six Sigma is a process improvement method that targets a system's constraint for process improvement.

Question 6

Corporate social responsibility refers to the moral obligation of all corporations to make substantial monetary contributions to charitable causes.

Question 7

Decentralization refers to:

A)reporting for the company as a whole.
B)focusing reporting on parts of the company.
C)the delegation of decision-making authority throughout an organization.
D)differences in organizations.

Question 8

Customer value propositions tend to fall into three broad categories--theory of constraints,six sigma,and enterprise risk management.

Question 9

A value chain consists of the major subassemblies that add value to a product.

Question 10

Which of the following is NOT one of the three major customer value propositions discussed in the text?

A)customer intimacy
B)operational excellence
C)zero defects
D)product leadership

Question 11

The Sarbanes-Oxley Act of 2002 was intended to protect the interests of those who invest in publicly traded companies by ensuring that their original investments could be recovered in case of fraud.

Question 12

Efforts designed to increase the rate of output should generally be applied to non-constraint work stations.

Question 13

_________________ is an example of a staff position.

A)Sales manager for a manufacturer
B)President of a merchandising company
C)Store manager for Best Buy
D)Human resource manager for a community college

Question 14

Enterprise risk management involves replacing risky investments with investments in low-risk government securities.

Question 15

Which of the following persons would occupy a line position in a department store? I.Sales manager
II)Manager,furniture department
III)Manager,advertising department
IV)Manager,personnel department

A)Only I
B)Only I and II
C)Only I,II,III
D)I,II,III,IV

Question 16

Companies that choose an operational excellence strategy are in essence saying to their customers,"Choose us because we can deliver products and services faster,more conveniently,and at a lower price than our competitors."

Question 17

Which of the following is NOT one of the five steps in the lean thinking model discussed in the text?

A)Create a pull system that responds to customer orders.
B)Automate the business process.
C)Identify the business process that delivers value.
D)Organize work arrangements around the flow of the business process.

Question 18

The controller occupies:

A)a line position.
B)a staff position.
C)neither a line nor a staff position,since the accounting department must be independent.
D)both a line and a staff position.

Question 19

The Institute of Management Accountants' Statement of Ethical Professional Practice specifically states,among other things,that management accountants have a responsibility to keep information confidential except when disclosure is authorized or legally required.

Question 20

The lean thinking model focuses on reducing defects to as close to zero as possible.

Question 21

The Institute of Management Accountants' Statement of Ethical Professional Practice states that when faced with significant ethical issues,management accountants should first:

A)discuss such problems with the immediate superior except when it appears that the superior is involved.
B)clarify relevant concepts by confidential discussion with an objective advisor to obtain an understanding of possible courses of action.
C)follow the established policies of the organization bearing on the resolution of such conflict.
D)submit an informative memorandum describing the ethical issue to an appropriate representative of the organization and resign if no action is taken as a result of the memorandum.

Question 22

Inventories consisting of units of product that are only partially complete are called ______________.

A)finished goods
B)raw materials
C)work in process
D)None of the above.

Question 23

One of the steps in the lean thinking model is to organize work arrangements around the flow of the business process.This is often accomplished by:

A)automating the business process.
B)implementing an enterprise system.
C)instituting a six sigma program.
D)creating a manufacturing cell.

Question 24

The Sarbanes-Oxley Act of 2002 contains all of the following provisions EXCEPT:

A)A CFO must be a CPA or CMA.
B)The audit committee of the board of directors of a company must hire,compensate,and terminate the public accounting firm that audits the company's financial reports.
C)Severe penalties are established for altering or destroying documents that may eventually be used in an official proceeding.
D)Both the CEO and CFO must certify in writing that their company's financial statements and accompanying disclosures fairly represent the results of operations.