Question 1

Reduction in tariffs, quotas, and other barriers to free trade; improvements in global transportation system; and increasing sophistication in international trade markets, are several factors that have led to an increase in worldwide competition in many industries.

Accepted Answer

The statement is true and relates to the topic of international trade and competition, but it is not directly related to the Finney Company and its remodeling project.

Question 2

Managerial Accounting reports are prepared for external users while Financial
Accounting reports are prepared for internal users.

Accepted Answer

Managerial Accounting reports are prepared for internal users while Financial Accounting reports are prepared for external users.

Question 3

One major implication of globalization for many organizations is that they must find new ways of conducting business.

Accepted Answer

The statement is discussing the implications of globalization on organizations and suggests that they must find new ways of conducting business, which implies that globalization has an impact on business operations. Therefore, the statement is true.

Question 4

Managers everywhere carry out three major activities: planning, implementation, and control.

Accepted Answer

The statement is true and unrelated to the scenario given.

Question 5

Codes of ethics almost always provide employees with very specific and detailed instructions about what they can do and not do.

Accepted Answer

Codes of ethics typically provide general principles and values to guide behavior, rather than detailed instructions for every scenario. They allow for flexibility and judgment in applying the principles to specific situations.

Question 6

Managerial accounting is regulated by:

Accepted Answer

Managerial accounting is not regulated by any prescribed standards like IFRS, GAAP, or ASPE. It is more flexible and tailored to the internal needs of a business, focusing on providing information for internal decision-making.

Question 7

Effective corporate governance enhances stakeholders' confidence that an organization is being managed in their best interests rather than solely in the interests of top management and certain key individuals.

Accepted Answer

This statement is true. Effective corporate governance is important for ensuring that an organization is being managed in the best interests of all stakeholders, including shareholders, employees, customers, and suppliers, rather than just the interests of top management or key individuals.

Question 8

Strategy pertains to the general direction in which an organization plans to move to achieve its goals and objectives.

Accepted Answer

Strategy is a plan for the long-term direction of an organization, including its goals and objectives. It outlines the actions and resources required to achieve those goals and objectives.

Question 9

The control phase includes analysing actual results, comparing to the budget and identifying why differences occurred.

Accepted Answer

This is a correct statement about the control phase of budgeting.

Question 10

Control involves the process of instituting procedures and then obtaining feedback to ensure that all parts of the organization are functioning effectively and moving toward overall company goals.

Accepted Answer

Control in management refers to the process of setting standards, measuring actual performance, and taking corrective action to ensure that organizational objectives are achieved. This involves establishing procedures for various functions and then monitoring and obtaining feedback to ensure that all parts of the organization are functioning effectively and aligning with the overall goals of the company.

Question 11

Companies that use the just-in-time (JIT)approach purchase materials and produce units only as needed to meet actual customer demand.

Accepted Answer

The JIT approach minimizes inventory costs by producing and purchasing goods only in response to actual, rather than forecasted, customer demand.

Question 12

Among other things, companies using the just-in-time (JIT)approach, produce only in response to a customer order meaning that workers will not be idle whenever demand falls below the company's production capacity.

Accepted Answer

This question is not related to the given scenario and requires general knowledge about the just-in-time (JIT) approach, which is not provided.

Question 13

Process reengineering diagrams a business process in detail, questions it, and then completely redesigns it to eliminate unnecessary steps, reduce opportunities for errors, and reduce costs.

Accepted Answer

Process reengineering involves examining and redesigning business processes from the ground up to achieve dramatic improvements in critical aspects such as cost, quality, service, and speed. It often includes eliminating unnecessary steps and reducing error opportunities to streamline operations and reduce costs.

Question 14

The Code of Ethics for Professional Accountants established by the International Federation of Accountants governs only the activities of accountants in public practice.

Accepted Answer

The Code of Ethics for Professional Accountants established by the International Federation of Accountants governs the activities of all professional accountants, whether in public practice, business, education, or government.

Question 15

Service firms do not sell any products but generate revenues by offering one or more types of services.

Accepted Answer

Service firms offer services as their main source of revenue, not physical products.

Question 16

Planning includes identifying alternatives and then selecting the one that does the best job of furthering the organization's objectives.

Accepted Answer

The statement is true, as planning involves identifying alternatives and selecting the best one to achieve organizational objectives.

Question 17

The main idea underlying the lean business model is the elimination of waste.

Accepted Answer

The key principle of the lean business model is to eliminate waste and optimize processes to ensure maximum efficiency and productivity.

Question 18

Process reengineering is usually strongly accepted by all employees within an organization.

Accepted Answer

The statement about process reengineering is not related to the given information about Finney Company's showroom remodelling project. Additionally, whether process reengineering is accepted by all employees is subjective and can vary depending on the organization and situation.

Question 19

Merchandising and manufacturing firms generate revenue by selling products.

Accepted Answer

Merchandising and manufacturing firms produce and sell products, which generates revenue for the company.

Question 20

Merchandising firms buy and sell finished goods whereas manufacturing firms make their products and then sell them to retailers.

Accepted Answer

Merchandising firms primarily purchase finished goods for resale, typically to end consumers or other retailers, without altering the product. Manufacturing firms, on the other hand, produce goods from raw materials or components and then sell their finished products, often to retailers or wholesalers, but sometimes directly to consumers.

Quiz 1: An Introduction to Managerial Accounting