1) Budgets _____. A. provide feedback by comparing results with plans and by highlighting deviations from plans B. are quantitative expressions of action plans C. ignore areas that are presumed to be running smoothly D. are deviations from a plan
2) Management by exception _____. A. provides feedback by comparing results with plans and by highlighting deviations from plans B. is the quantitative expression of action plans C. focuses on areas that are presumed to be running smoothly D. is a summary report of plan results
3) Department performance reports can be used to help department heads determine _____. A. who is primarily responsible for any deviations from plans B. how effectively and efficiently the department is operating C. how efficiently the department is operating D. how effectively the department is operating
4) Below is a statement from the Institute of Management Accountants' Statement of Ethical Professional Practice. "Refrain from disclosing confidential information acquired in the course of their work except when authorized, unless legally obligated to do so." It is an example of _____. A. objectivity B. integrity C. confidentiality D. competence
5) According to the Institute of Management Accountants' Statement of Ethical Professional Practice, the standard of competence includes: A. All of these answers are correct B. disclosing all relevant information C. avoiding actual or apparent conflicts of interest D. the ongoing development of the accountant's knowledge and skills
6) Which of the following is not a major factor causing changes in management accounting today? A. Increasing importance of the service sector of the economy is not a major factor. B. E-commerce is not a major factor. C. Increased global competition is not a major factor. D. Declining work ethic is not a major factor.
7) The primary users of management accounting information are _____. A. suppliers B. internal decision makers C. governmental regulatory authorities D. bankers
8) Which scorecard function is associated with making non-routine decisions? A. None of these answers is correct B. Problem solving is associated with making non-routine decisions. C. Attention directing is associated with making non-routine decisions. D. Scorekeeping is associated with making non-routine decisions.
9) _____ is (are) the accounting system's effect on the decision of managers. A. Computerization B. The cost-benefit balance C. Behavioral implications D. Simplicity
10) Etiwanda Company's accountant recorded a debit to Accounts Payable and a credit to Cash. This transaction will_____. A. decrease Cash and increase Accounts Payable B. increase Cash and decrease Accounts Payable C. decrease Cash and decrease Accounts Payable D. increase Cash and increase Accounts Payable
11) The _____ is also called the statement of financial position. A. balance sheet B. income statement C. statement of cash flows D. statement of retained earnings
12) The accrual basis of accounting recognizes the impact of transactions on the financial statements in the period when _____. A. cash is received or disbursed B. revenues are earned and expenses are incurred C. the accounting equation is decreased D. the transaction occurs
13) Mr. Bryant invested $50,000 cash in a new corporation. The new corporation will record this transaction with a debit to_____. A. Cash and a credit to Retained Income for $50,000 B. Retained Earnings and a credit to Cash for $50,000 C. Cash and a credit to Paid-in Capital for $50,000 D. Paid-in Capital and a credit to Retained Earnings for $50,000
14) The accounting convention of _____ guides the relative sophistication of the accounting system. A. cost benefit B. objectivity C. materiality D. conservatism
15) The accounting convention of _____ means selecting the method of measurement that yields the gloomiest immediate results. A. objectivity B. cost benefit C. conservatism D. materiality
16) The difference between a single and multiple step income statement is that a single step income statement_____. A. calculates net income using one method, whereas a multiple step income statement calculates net income under two or more methods B. groups all revenues together and all expenses together, whereas a multiple step income statement separates certain revenues and expenses from each other and presents subtotals C. shows only one year's net income, whereas a multiple step income statement shows multiple years' net income D. calculates gross profit and operating income, whereas a multiple step income statement does not
17) Limited liability means that_____. A. the creditors of a corporation can receive only up to, and no more than, the amount due to them B. the creditors of the corporation have claims on only the assets of the corporation and not the assets of the owners of the corporation C. corporations can have liabilities up to only a certain amount due to limits on the company's borrowing capability D. the company is required to pay only current liabilities in the current year and has no obligation to pay long term liabilities in the current year
18) Nonoperating items on the income statement_____. A. appear on the income statement immediately after gross profit B. appear only on corporate income statements C. reflect the effects of financial management decisions D. are revenues and expenses arising from adjusting entries
19) Number of engineering hours is a likely cost driver for which value chain function? A. The production function has number of engineering hours as a likely cost driver B. The marketing function has number of engineering hours as a likely cost driver. C. The design function has number of engineering hours as a likely cost driver. D. The research and development function has number of engineering hours as a likely cost driver.
20) Which value chain function would include advertising costs? A. The marketing function would include advertising costs. B. The production function would include advertising costs. C. The customer service function would include advertising costs. D. The distribution function would include advertising costs.
21) Which value chain function would include the cost of computer-aided design equipment and cost to develop the prototype of a product? A. The marketing function would include these costs B. The production function would include these costs. C. The design of product, services, and processes function would include these costs. D. The distribution function would include these costs.
22) Walnut Corporation sells desks at $480 per desk. The costs associated with each desk are as follows: Direct materials $195 Direct labor 126 Variable factory overhead 51 Total fixed costs for the period are $456,840. The contribution margin per desk is _____. A. $126 B. $51 C. $108 D. $195
23) Hug Me Company produces dolls. Each doll sells for $20.00. Variable costs per unit total $14.00, of which $6.25 is for direct materials and $5.25 is for direct labor. If total fixed costs are $435,000, then the break even volume in dollars is _____. A. $435,000 B. $621,429 C. $1,023,529 D. $1,450,000
24) Knothole Company sells desks at $480 per desk. The costs associated with each desk are as follows: Direct materials $195 Direct labor 126 Variable factory overhead 51 Total fixed costs for the period are $456,840. The break-even volume in dollars is _____. A. $1,573,560 B. $2,030,400 C. none of these answers is correct D. $456,840
25) The _____ method of measuring cost functions is the least reliable. A. visual fit B. simple least squares regression C. multiple least squares regression D. high low
26) In relation to a cost function, the term reliability means_____. A. whether the cost function conforms to a given mathematical model B. how well the cost function predicts future costs C. how well the cost function explains past cost behavior D. whether the costs and activities can be easily observed
27) _____ is a method of approximating cost functions. A. Transaction analysis B. Product analysis C. Account analysis D. Cost driver analysis
28) _____ is a name for a system that first accumulates overhead costs for each of the activities of an organization, and then assigns the costs of activities to the products, services, or other cost objects that caused that activity. A. Cost driver accounting B. Transaction based accounting C. Transaction costing D. Activity based costing
29) _____ is an example of the external financial reporting purpose of the cost management systems. A. Budget reporting B. The amount of inventory that should appear on the balance sheet C. The product mix to optimize profitability D. The cost of a manufacturing process
30) The change from traditional costing to activity-based costing may reveal that _____. A. both high and low volume products are undercosted B. both high and low volume products are overcosted C. low volume products are overcosted D. high volume products are overcosted
2) Management by exception _____. A. provides feedback by comparing results with plans and by highlighting deviations from plans B. is the quantitative expression of action plans C. focuses on areas that are presumed to be running smoothly D. is a summary report of plan results
3) Department performance reports can be used to help department heads determine _____. A. who is primarily responsible for any deviations from plans B. how effectively and efficiently the department is operating C. how efficiently the department is operating D. how effectively the department is operating
4) Below is a statement from the Institute of Management Accountants' Statement of Ethical Professional Practice. "Refrain from disclosing confidential information acquired in the course of their work except when authorized, unless legally obligated to do so." It is an example of _____. A. objectivity B. integrity C. confidentiality D. competence
5) According to the Institute of Management Accountants' Statement of Ethical Professional Practice, the standard of competence includes: A. All of these answers are correct B. disclosing all relevant information C. avoiding actual or apparent conflicts of interest D. the ongoing development of the accountant's knowledge and skills
6) Which of the following is not a major factor causing changes in management accounting today? A. Increasing importance of the service sector of the economy is not a major factor. B. E-commerce is not a major factor. C. Increased global competition is not a major factor. D. Declining work ethic is not a major factor.
7) The primary users of management accounting information are _____. A. suppliers B. internal decision makers C. governmental regulatory authorities D. bankers
8) Which scorecard function is associated with making non-routine decisions? A. None of these answers is correct B. Problem solving is associated with making non-routine decisions. C. Attention directing is associated with making non-routine decisions. D. Scorekeeping is associated with making non-routine decisions.
9) _____ is (are) the accounting system's effect on the decision of managers. A. Computerization B. The cost-benefit balance C. Behavioral implications D. Simplicity
10) Etiwanda Company's accountant recorded a debit to Accounts Payable and a credit to Cash. This transaction will_____. A. decrease Cash and increase Accounts Payable B. increase Cash and decrease Accounts Payable C. decrease Cash and decrease Accounts Payable D. increase Cash and increase Accounts Payable
11) The _____ is also called the statement of financial position. A. balance sheet B. income statement C. statement of cash flows D. statement of retained earnings
12) The accrual basis of accounting recognizes the impact of transactions on the financial statements in the period when _____. A. cash is received or disbursed B. revenues are earned and expenses are incurred C. the accounting equation is decreased D. the transaction occurs
13) Mr. Bryant invested $50,000 cash in a new corporation. The new corporation will record this transaction with a debit to_____. A. Cash and a credit to Retained Income for $50,000 B. Retained Earnings and a credit to Cash for $50,000 C. Cash and a credit to Paid-in Capital for $50,000 D. Paid-in Capital and a credit to Retained Earnings for $50,000
14) The accounting convention of _____ guides the relative sophistication of the accounting system. A. cost benefit B. objectivity C. materiality D. conservatism
15) The accounting convention of _____ means selecting the method of measurement that yields the gloomiest immediate results. A. objectivity B. cost benefit C. conservatism D. materiality
16) The difference between a single and multiple step income statement is that a single step income statement_____. A. calculates net income using one method, whereas a multiple step income statement calculates net income under two or more methods B. groups all revenues together and all expenses together, whereas a multiple step income statement separates certain revenues and expenses from each other and presents subtotals C. shows only one year's net income, whereas a multiple step income statement shows multiple years' net income D. calculates gross profit and operating income, whereas a multiple step income statement does not
17) Limited liability means that_____. A. the creditors of a corporation can receive only up to, and no more than, the amount due to them B. the creditors of the corporation have claims on only the assets of the corporation and not the assets of the owners of the corporation C. corporations can have liabilities up to only a certain amount due to limits on the company's borrowing capability D. the company is required to pay only current liabilities in the current year and has no obligation to pay long term liabilities in the current year
18) Nonoperating items on the income statement_____. A. appear on the income statement immediately after gross profit B. appear only on corporate income statements C. reflect the effects of financial management decisions D. are revenues and expenses arising from adjusting entries
19) Number of engineering hours is a likely cost driver for which value chain function? A. The production function has number of engineering hours as a likely cost driver B. The marketing function has number of engineering hours as a likely cost driver. C. The design function has number of engineering hours as a likely cost driver. D. The research and development function has number of engineering hours as a likely cost driver.
20) Which value chain function would include advertising costs? A. The marketing function would include advertising costs. B. The production function would include advertising costs. C. The customer service function would include advertising costs. D. The distribution function would include advertising costs.
21) Which value chain function would include the cost of computer-aided design equipment and cost to develop the prototype of a product? A. The marketing function would include these costs B. The production function would include these costs. C. The design of product, services, and processes function would include these costs. D. The distribution function would include these costs.
22) Walnut Corporation sells desks at $480 per desk. The costs associated with each desk are as follows: Direct materials $195 Direct labor 126 Variable factory overhead 51 Total fixed costs for the period are $456,840. The contribution margin per desk is _____. A. $126 B. $51 C. $108 D. $195
23) Hug Me Company produces dolls. Each doll sells for $20.00. Variable costs per unit total $14.00, of which $6.25 is for direct materials and $5.25 is for direct labor. If total fixed costs are $435,000, then the break even volume in dollars is _____. A. $435,000 B. $621,429 C. $1,023,529 D. $1,450,000
24) Knothole Company sells desks at $480 per desk. The costs associated with each desk are as follows: Direct materials $195 Direct labor 126 Variable factory overhead 51 Total fixed costs for the period are $456,840. The break-even volume in dollars is _____. A. $1,573,560 B. $2,030,400 C. none of these answers is correct D. $456,840
25) The _____ method of measuring cost functions is the least reliable. A. visual fit B. simple least squares regression C. multiple least squares regression D. high low
26) In relation to a cost function, the term reliability means_____. A. whether the cost function conforms to a given mathematical model B. how well the cost function predicts future costs C. how well the cost function explains past cost behavior D. whether the costs and activities can be easily observed
27) _____ is a method of approximating cost functions. A. Transaction analysis B. Product analysis C. Account analysis D. Cost driver analysis
28) _____ is a name for a system that first accumulates overhead costs for each of the activities of an organization, and then assigns the costs of activities to the products, services, or other cost objects that caused that activity. A. Cost driver accounting B. Transaction based accounting C. Transaction costing D. Activity based costing
29) _____ is an example of the external financial reporting purpose of the cost management systems. A. Budget reporting B. The amount of inventory that should appear on the balance sheet C. The product mix to optimize profitability D. The cost of a manufacturing process
30) The change from traditional costing to activity-based costing may reveal that _____. A. both high and low volume products are undercosted B. both high and low volume products are overcosted C. low volume products are overcosted D. high volume products are overcosted
