BAC 3102 BASIC CONSIDERATIONS 14.

Management accountants should attempt to

1. The primary objective of management accounting is to resolve ethical issues by first
provide a. discussing the problem with a person in authority
a. stockholders and potential investors with useful b. reporting the problem to an external authority
information for decision making c. clarifying the issues through a confidential discussion with
b. banks and other creditors with information useful in making an objective advisor d. any of the above
credit decisions 15. How does the management accounting
c. management with information useful for planning and information system differ from the financial
control of operations accounting system?
d. the Internal Revenue with information about taxable a. the management accounting information system produces
income information for external users; the financial accounting
2. Management accounting is concerned with which kind system produces information for internal users
of decision? b. the management accounting information system uses
a. product costing and pricing c. financial control rules promulgated by the SEC; the financial accounting
b. continuous operation improvement d. all of these system uses rules promulgated by the ASC
3. Which of the following is not an output of the c. the management accounting information system uses
management accounting information system? objective information; the financial accounting system uses
a. budgets c. performance reports subjective information
b. customer cost information d. financial statements d. none of the above
4. Investigating production variances and adjusting the 16. Accounting information that users can depend
production process is an example of on to represent the economic condition or events
a. planning c. internal auditing that it purports to represent best defines
b. control d. directing a. relevance c. feedback
5. Evaluating the performance of a segment of the b. timeliness d. reliability
company is an example of 17. The personnel, procedures, devices and
a. planning c. internal auditing records used by an entity to develop accounting
b. control d. directing information and to communicate to decision makers
6. Setting the selling price of a company’s product is an is known as:
example of a. Responsibility accounting system c. Internal control system
a. planning c. decision making b. Practice of accounting d. Accounting system
b. control d. coordinating 18. The controller of a company or other organization is
7. Developing a company strategy for responding to a. a staff manager. C. an accountant, not a manager.
anticipated new markets is an example of b. an operating manager. D. a natural manager.
a. planning c. decision making 19. Which item is NOT an IMA Standard for Ethical
b. control d. coordinating Conduct?
8. Which of the following does not describe management a. Integrity. C. Loyalty
accounting? b. Competence. D. objectivity
a. internally focused c. externally focused 20. Which activity is NOT normally performed by
b. emphasis on the future d. detailed information managerial accountants?
9. The chief accounting officer of an organization is the a. Assisting managers to interpret data in managerial
a. vice-president of finance c. treasurer accounting reports.
b. internal auditor d. controller b. Designing systems to provide information for internal and
external reports.
10. The finance function within an organization is
the responsibility of the c. Gathering data from sources other than the accounting
system.
a. chief executive officer c. treasurer
d. Deciding the best level of inventory to be maintained.
b. internal auditor d. controller
21. In which of the following points does
11. The internal auditor performs a
managerial accounting similar to financial
a. line function c. production function accounting?
b. staff function d. finance function a. In the use of cost data.
12. A person in a staff position b. In the manner costs are used in matching.
a. has direct responsibility for achieving the basic objective of c. In the application of the convention of materiality.
the organization d. In the application of the standard of neutrality.
b. provides support for the line function 22. A type of managerial accounting which refers
c. is not employed by the company to the tracing of costs to the responsibility centers to
d. has low education and skill levels pinpoint accountability and evaluate performance.
13. Which of the following would be considered a a. differential accounting c. responsibility accounting
line function? b. full cost accounting d. profitability accounting
a. Production c. public relations 23. Which of the following characteristics does not
b. Maintenance d. administrative services relate to managerial accounting?
a. accounting reports may include non-monetary information
b. it is subject to restrictions imposed by GAAP
c. reports are often based on estimates and are seldom
useful for anything other than the purpose for which they
are prepared
d. it provides data for internal users within the business
organization
24. Which of the following is not a characteristic of
management services?
a. a wider variety of assignments are encountered in MAS
than in audit.
b. MAS engagements are recurring
c. MAS pinpoint actions to be taken, the benefits of which will
be received in the future
d. in MAS engagements, the nature of work involved requires
a lesser need for junior assistance.
25. Which of the following characteristics relate to
financial accounting?
a. it is generally non-recurring
b. data may be both historical and estimates
c. it must be adhere to the generally accepted accounting
principles.
d. it provides relevant information needed by management in
making decisions
26. Which of the following will NOT impair
independence of an MAS practitioner?
a. The CPA performs decision making services for the
client
b. The CPA performs services wherein he is effect, acting
as an employee of the company
c. The CPA loses his objectivity and acts in a manner as if
he is advocating for the interest of the client company
d. The CPA does not extend his services beyond the
representation of recommendations or giving of advice
27. Which of the following is a line manager?
a. Dean of the School of Business at a University
b. Chief Legal Officer of a national chain of supermarkets
c. Treasurer of an automobile manufacturer
d. None of these
28. Controllers are ordinarily not concerned with
a. preparation of tax returns
b. establishment of internal control
c. investor relations
d. reliability of accounting and other records
29. A treasurer is usually not concerned with
a. Financial reporting
b. Short term financing
c. Cash custody and banking
d. Investments risk Management
30. The primary purpose of MAS is
a. to conduct special studies, prepare recommendations,
develop plans and programs, provide advice and
assistance in their implementation;
b. to provide services or fulfill social needs;
c. to improve client’s use of its capabilities and resources
to achieve the objectives of the organization;
d. to earn the best rate of return on resources entrusted to
its care with safety of investment
FINANCIAL AND MANAGEMENT ACCOUNTING
I. Consider the descriptors that follow.
1. Is heavily involved with the recordkeeping and
reporting of assets, liabilities, and stockholders’
equity. FA
2. Focuses on planning, control, decision making, and
performance evaluation. MA
3. Is heavily regulated. FA
4. A field that is becoming more "cross-functional" in
nature. MA
5. Much of the field is based on costs and benefits. MA
6. Is involved almost exclusively with past transactions
and events. FA
7. Much of the information provided is directed toward
stockholders, financial analysts, creditors, and other
external parties. FA
8. Tends to focus more on subunits within an entity
rather than the organization as a whole. MA
9. May become involved with measures of customer
satisfaction, and the amount of actual cost incurred
vs. budgeted targets. MA
10. Generally problem solving in nature MA
II. True-False
1. Published financial statements show costs classified
by behavior. False
2. Generally accepted accounting principles govern
financial accounting but not managerial accounting.
True
3. Economic events are the raw data for both financial
and managerial accounting. True
4. Internal financial statements must be prepared using
generally accepted accounting principles. True
(False- answer online)
5. The form and content of reports can influence
decisions made by managers. True
6. Management-by-objectives and management-by-
exception are two names for the same general
management principle. False
7. The treasurer is normally in charge of preparing
reports for tax purposes. False
8. Some managerial accounting reports contain costs
not incorporated in the basic accounting system.
True
9. A professional examination exists to test the
competence of financial accountants, but not of
managerial accountants. False
10. Managerial accountants should, but have no
obligation to, maintain their professional skills. False