Toreja, Ben Ryan M.

BSA 2205

QUIZ 1

1. The IMA definition of management accounting states that:

ANSWER: C.

a. Management accounting is the process of gathering, reporting, and analyzing information for
management decision making.
b. Management accounting is a profession that involves preparation and analysis of cost
information, budgeting, and performance measurement and analysis to assist managers in
decision making.
c. Management accounting involves partnering in management decision making, planning, and
performance measurement to assist in the formulation and implementation of an organization’s
strategy.
d. Management accounting is a set of practices in which accountants, working within companies,
help managers to make better decisions based on accurate fi nancial information.
2. Which of the following is the correct sequence in which cost management information is developed and
used?

ANSWER: D.

a. Business events, data, information, analysis, decisions

b. Business events, data, analysis, information, decisions
c. Business events, information, analysis, knowledge, decisions
d. Business events, data, information, knowledge, decisions
3. Cost management uses the expertise of the management accountant to

ANSWER: B.

a. Improve quality and reduce cost

b. Implement a strategy of cost leadership or differentiation
c. Implement a strategy of customer value and shareholder value
d. Improve business processes and lean operations
e.
4. The cost management professionals in an organization probably report directly to the

ANSWER: A.

a. Controller c. Chief executive offi cer (CEO)

b. Treasurer d. Chief fi nancial offi cer (CFO)
5. Walmart, Costco, and Dollar General are retailers that compete on the basis of

ANSWER: C.

a. Quality and customer service c. Low prices

b. Product differentiation d. Desirable locations
6. Cost management has evolved from a focus on measurement to one of identifying those measures that
are critical to the organization’s success. Given this new focus, indicate which one of the following types
of cost management systems cost managers are likely to be striving for.

ANSWER: D.

a. Basic transaction reporting systems

b. A system that focuses on reliable financial reports
c. A system that tracks key operating data and uses more accurate and relevant cost information
for decision making
d. A system in which strategically relevant cost management information is an integral part

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7. A management method in which managers and employees commit to a process of continuous
improvement is best described as

ANSWER: B.

a. Total quality management c. Lean accounting

b. Business process improvement d. The theory of constraints
8. Professional certifications are issued by the American Institute of Certified Public Accountants (AICPA),
the Institute of Management Accountants (IMA), The Chartered Institute of Management Accountants
(CIMA), and the Society of Management Accountants in Canada (CMA-Canada), among other
professional accounting organizations. The Certificate in Management Accounting (CMA) is issued by
the

ANSWER: B.

a. CIMA
b. IMA
c. CMA-Canada
d. AIC

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9. To determine whether a particular action is professionally ethical or not, using the Institute of
Management Accountants Statement of Ethical Professional Practice, it is necessary to know:

ANSWER: B.

a. Whether the act is legal in your jurisdiction

b. The intent and the business context of the act
c. The amount of the fraud or theft that is involved
d. Whether the management accountant is certified or not
10. Firms that want to grow quickly in the global marketplace often employ the cost leadership strategy
because:

ANSWER: B.

a. This produces favorable customs rates and import duties.

b. Manufacturers around the world adopt lean manufacturing methods to bring their costs down.
c. This allows them to employ and benefi t from enterprise management systems.
d. There are relatively few product variations across different countries.
11. The strategy map can be compared to the balanced scorecard (BSC) in that

ANSWER: C.

a. The strategy map is a subset of the BSC.

b. The strategy map deals with the strategy component of the BSC.
c. The strategy map provides a guide to implementing the BSC by linking the critical success
factors.
d. The strategy map and the BSC are unrelated.
12. The IMA ethical standard that requires the management accountant to mitigate conflicts of interest:

ANSWER: A.

a. Requires the management accountant to act with integrity

b. Is not a part of the IMA Statement of Ethical Professional Practice
c. Is necessary to ensure that the management accountant’s credibility is not impaired
d. Is necessary to ensure that the management accountant does not violate the standard regarding
confidentiality

13. Name the 13 contemporary management techniques and describe each briefly.

1. The Balanced Scorecard (BSC) and Strategy Map – helps with determining the broad scope of
factors, financial or not, that affects the business’ aim to achieve its goals.

2. The Value Chain – a tool used to determine which steps to take to give a more profitable product
than competitors.

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 3. Business Intelligence – this technique makes use of methods such as regression or correlation analysis
to understand the performance of the business.

4. Benchmarking – A technique that compares critical success factors of their business with its
competitors and then create changes to improve and overtake the competition.

5. Activity-Based Costing and Management – ABC is used for tracing costs back to the product or to
customers. ABM is used by managers to help increase competitiveness.

6. Target Costing – Is used in highly competitive industries and forces companies to be more
competitive and fiercer in the current market.

7. Life-Cycle Costing - Is a technique that monitors the costs of a product throughout its life cycle.

8. Business Process Improvement – a management technique where managers and workers commit on
continuous improvement.

9. Sustainability – Is a technique that focuses on reducing costs and improving profitability while
complying with social and environmental regulations.

10. The Theory of Constraints – A management technique that focuses on the improvement of a
business’ cycle time.

11. Enterprise Risk Management – Is a technique that prioritizes the identification and mitigation of risks
that may affect the business.

12. Lean Accounting – uses value streams along with a manufacturing firm that uses lean manufacturing.

13. Total Quality Management – where the management creates policies that make sure that the
quality of their products or service exceed customer expectations.

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