30.4 set of policies, procedures and approaches to business to produce long-term success is termed a. critical success factor. competitive position. mission. strategy. aos CHAPTER 2 Multiple Choice L means reporting and interpreting information that helps managers to focus on operating problems, imperfections, inefficiencies, and opportunities. a. Scorekeeping b. Attention directing c Problem solving d. None of the above 2. Management accounting is considered successful when it a. helps creditors evaluate the company's performance. b. helps managers improve their decisions. c — isaccurate. 4d. — isrelevantand reported annually. 3. The Institute of Management Accountants (IMA) a. isaprofessional organization of management accountants. is a professional organization of financial accountants. ¢. issues standards for management accounting. d. issues standards for financial accounting. 4, Line management includes manufacturing managers. human-resource managers. information-technology managers. management-accounting managers. aoge 5, Staff management includes manufacturing managers. hhuman-resource managers. purchasing managers, distribution managers. pose 6. Responsibility of a CFO include all EXCEPT.a. providing financial reports to shareholders. b. managing short-term and long-term financing, c investing in new equipment. a preparing tax returns. 7. The Standards of Ethical Conduct for management accountants include concepts related to a. _competence, performance, integrity, and reporting, b. competence, confidentiality, integrity and objectivity. © experience, integrity, reporting, and objectivity. d. none of the above as ethical issues do not affect management accountants. 8. Ethical challenges for management accountants include a. whether to accept gifts from suppliers, knowing it is an effort to indirectly influence decisions. b. whether to report unfavorable department information that may result in unfavorable consequences for a friend. c. whether to file a tax return this year. d, both (a) and (b). 9. If a financial manager /management accountant has a problem in identifying unethical behavior or resolving an ethical conflict, the first action (s)he should normally take is to a. consult the board of directors b, discuss the problem with his/her immediate superior. notify the appropriate law enforcement. resign from the company. 10. Katrina is a financial manager who has discovered that her company is violating environmental regulations. If her immediate superior is involved, her appropriate action isto a, donothing since she has a duty of loyalty to the organization. b. consult the audit committee. © present the matter to the next higher managerial level. d. confront her immediate superior. 11. If financial manager/management accountant discovers unethical conduct in his/her organization and fails to act, (s)he will be in violation of which ethical standard(s)? a. "Actively or passively subvert the attainment of the organization's legitimate and ethical objectives.” b, "Communicate unfavorable as well as favorable information." c."Condone the commission of such acts by others within their organizations.” 4. All of the answers are correct. 12, Corporate social responsibility is a. effectively enforced through the controls envisioned by classical economics. b. the obligation to shareholders to earn a profit.c. the duty to embrace service to the public interest. 4. the obligation to serve long-term, organizational interests. 13. A common argument against corporate involvement in socially responsible behavior is that a. it encourages government intrusio b. as a legal person, a c it creates goodwill d. in a competitive market, such behavior incurs costs that place the company at a disadvantage. decision making. corporation, is accountable for its conduct. 14, Integrity is an ethical requirement for all financial managers/management accountants. One aspect of integrity requires a, performance of professional duties in accordance with applicable law: b. avoidance of conflict of interest. © refraining from improper use of inside information. d, maintenance of an appropriate level of professional competence. 15. A financial manager /management accountant discovers a problem that could mislead users of the firm's financial data and has informed his/her immediate superior. (She should report the circumstances to the audit committee and/or the board of directors only if a. the immediate superior, who reports to the chief executive officer, knows about the situation but refuses to correct it. b. the immediate superior assures the financial manager /management accountant that the problem will be resolved. the immediate superior reports the situation to his/her superior. d. the immediate superior, the firm's chief executive officer, knows about the situation but refuses to correct it. 16. In which situation is a financial manager/management accountant permitted to communicate confidential information to individuals or authorities outside the firm? a. There is an ethical conflict and the board has refused to take action b, Such communication is legally prescribed. c. The financial manager/management accountant knowingly communicates the information indirectly through a subordinate. d. An officer at the financial manager/management accountant's bank has requested information on a transaction that could influence the firm's stock price. 17. Which ethical standard is most clearly violated if a financial manager/management accountant knows of a problem that could mislead users but does nothing about it? a. Competence Objectivity b. Legality Confidentiality 18. produces information that helps workers, managers, and executives in organizations make better decisions. a Governmental accountingb, Management accounting c Auditing Financial accounting 19. is the recognition and evaluation of business transactions and other economic events for appropriate accounting action. a. Identification ©. Communication b. Analysis d. Evaluating 20. is the quantification of business transactions or other economic events that have occurred or forecasts of those that may occur. a Accumulation b. External reporting Measurement d. Internal reporting 21. is a determination of the reasons for the reported activity and its relationship with other economic events and circumstances. a. Analysis b, Measurement c Evaluation Accumulation 22. includes strategic, tactical and operating aspects. a Controlling b, Communication © Planning d. Evaluating 23. judges implications of historical and expected events and helps to choose the optimum course of action, a Controlling b. Communication Planning a Evaluating 24. Which of the following is a basic feature of a financial accounting system? a. Internal audience b. Historical data © Subjective information d.—_Disaggregate information 25. Which of the following is NOT a basic feature of a financial accounting system? a. objective information b, reports on past performance c _ future oriented reports highly aggregated data26. Which of the following is a basic feature of a managerial accounting system? a. external audience b. reports are current and future oriented © objective data only d. reports on the entire organization 27. Which of the following is NOT a basic feature of a managerial accounting system. a. financial measures only b, subjective information c _ internal audience informs local decision and actions 28. Which of the is a basic feature of a managerial accounting system? a, The scope tends to be highly aggregate. b, There are no regulations governing the reports. The reports are generally delayed and historical. The audience tends to be stockholders, creditors and tax authorities. 29, Which of the following groups would be LEAST likely to receive detailed management accounting reports? a management accountants b. scientists and engineers © stockholders a |. managers 30. indicate whether the organization is creating long-term value and profitability. a. Strategic information c. Net income b. ROI d, Critical success factors 31. is when a firm compares itself with the best practice of competitors or other comparable organizations. a. Process improvement b. Benchmarking c __ Employee empowerment Total quality philosophy 32. Which of the following is NOT a function of a management accounting system? a, operating control b. product and customer costing management control financial reporting 33. Which of the following functions provides feedback information about the efficiency of tasks performed? a operating controlb, product and customer costing © management control financial reporting 34, Which of the following functions provides information on the performance managers and operating units? a operating control b. product and customer costing © management control d. financial reporting 35. Which of the following is NOT a role of management accounting information operating control? a. to provide feedback information about quality b. to provide feedback information about timeliness © to provide feedback information about the efficiency of tasks performed d. to provide performance measures for decentralized organizational units 36. Which of the following is NOT a role of management accounting information product and customer costing? a, to measure the cost of resources used to produce a service of in b. to assess the profitability of the organization's services by linking resources generated C. to provide feedback information about the quality, timeliness, and efficiency of tasks performed d, to assess customer profitability for a particular segment 37. An organization develops a code of ethics because a. itis required by law. b. the Chief Executive Officer demands it. c misunderstandings. d. it wishes to punish those whose ethical standards are different from its own wishes to reduce ethical conflicts by avoiding ambiguity or 38. If an individual faces a conflict between the organization's stated and practiced values experts recommend that a. the individual resign immediately and call the media b. the individual call the media. ¢ delay action and work with respected leaders in the organization. d. delay action and hope the problem goes away. 39, The elements of an ethical control system include the following EXCEPT a reward system for turning in those who violate the ethical code a statement of the organization's values and code of ethics. an ongoing internal audit of the ethical control system. a statement of the employee's ethical responsibilities. pose40. Certified Management Accountants are required to adhere to the following ethical standards, EXCEPT a competence. b. ingenuity c integrity. d. objectivity. 41. A study of organiz particular task tion that are among the best in the world at performing a a. Business process b, Benchmarking © Control a Feedback 42, An activity that consumes resources or takes time out that does not add value for which customers are willing to pay a. Non-value added activity b. Value-added activity © Process reengineering d. Total quality management 43, Accounting and other reports that help managers monitor performance and focus on problems and/or opportunities that might otherwise go unnoticed a. Feedback Financial accounting b, Performance report d Managerial accounting CHAPTER 3 Muttiple Choice 1. The strategic approach to management requires integrative thinking, ie., the ability to identity and solve problems: a. from a cross-functional view. b, without using accounting data. ©. quickly and decisively. d, under considerable stress. 2. Firms have responded to the recent changes in business in all but which one of the following ways? a. down-sizing the workforce b. developing smaller structures ©. outsourcing service functions d, promoting more effective policies