Review Questions and Problems a.

Line position
b. Staff position
1. This consists of identifying alternatives, selecting from among the
c. Chief Financial Officer
alternatives the one that is the best for the organization, and specifying
d. Controller
what actions will be taken to implement the chosen alternative.
6. A detailed report to management comparing budgeted data to actual
a. Controlling
data for specific time is called a ___.
b. Planning
a. Budget
c. Directing
b. Planning report
d. Motivating
c. Performance report
2. The accounting and other reports coming to the management that are
d. Controller’s report
used in controlling the organization are called _____.
7. A member of the top management team who is responsible for
a. Feedback
providing timely and relevant data to support planning and control
b. Performance Report
activities and for preparing financial statements for external users.
c. Budget
a. Chief Financial Officer
d. Financial Accounting
b. Controller
3. The delegation of decision-making authority throughout an
c. Management Accountant
organization by allowing managers at various operating levels to make
d. Treasurer
key decisions relating to their area of responsibility is called ____.
8. Managerial accounting places less emphasis on ___ and more
a. Planning
emphasis on ___ than financial accounting.
b. Directing
a. Planning; Nonmonetary data
c. Control
b. Budgets; Estimated data
d. Decentralization
c. Precision; Nonmonetary data
4. A position in the organization chart that is directly related to achieving
d. Estimates; Actual data
the basic objectives of an organization is called ___.
9. The manager in charge of the accounting department in an
a. Line position
organization.
b. Staff position
a. Chief Financial Officer
c. Chief financial officer
b. Treasurer
d. Controller
c. Controller
5. A _____ provides service or assistance to other parts of the
d. Vice President- Finance
organization and does not directly achieve the basic objectives of the
organization.

Management Advisory Services, Comprehensive CPA Reviewer, Cabrera, 2017 Edition

 10. The phase of accounting concerned with providing information to a. Actively or passively subvert the attainment of the organization’s
managers for use in planning and controlling operations and decision- legitimate and ethical objectives
making. b. Communicate unfavorable as well as favorable information
a. Financial accounting c. Condone the commission of such acts by others within their
b. Managerial accounting organization
c. Cost accounting d. All the answers are correct
d. Corporate accounting 15. Corporate social responsibility is___.
11. An activity that consumes resources or takes time but does not add a. Effectively enforced through the controls envisioned by classical
value for which customers are willing to pay. economics
a. Constraint b. Defined as the obligation to shareholders to earn a profit
b. Non-value-added activity c. More than the obligation to shareholders to earn a profit
c. Non-constraint d. Defined as the obligation to serve long term, organizational
d. Value-added activity interests
12. A visual diagram of a firm’s organizational structure that depicts formal 16. A common argument against corporate involvement in socially
lines of reporting, communication, and responsibility between responsible behavior is that__.
managers. a. It encourages government intrusion in decision making
a. Performance report b. As a legal person, a corporation is accountable for its conduct
b. Budget c. It creates goodwill
c. Cycle diagram d. In a competitive market, such behavior incurs costs that place
d. Organization Chart the company at a disadvantage
13. If a financial manager/management accountant has a problem in 17. The code of Ethics for Management Accountants requires a financial
identifying unethical behavior or resolving an ethical conflict, the first manager/management accountant to follow the established policies of
action he should normally take to is to __. the organization when faced with an ethical conflict. If these policies do
a. Consult the board of directors not resolve the conflict, the financial manager/management accountant
b. Discuss the problem with his/her immediate superior should
c. Notify the appropriate law enforcement agency a. Consult the board of directors immediately
d. Resign from the company b. Discuss the problem with the immediate superior if he/she is
14. Sam is a financial manager who has discovered that her company is involved in the conflict
violating environmental regulations. If her immediate superior is c. Communicate the problem to authorities outside the
involved, her appropriate action is to__. organization

Management Advisory Services, Comprehensive CPA Reviewer, Cabrera, 2017 Edition

 d. Contact the next higher managerial level if initial presentation to
the immediate superior does not resolve the conflict
18. Financial managers/management accountants are obligated to
maintain the highest standards of ethical conduct. Accordingly, the
Code of Ethics for Management Accountants explicitly requires that
they
a. Obtain sufficient competent evidence when expressing an
opinion
b. Not condone violations by others
c. Comply with generally accepted auditing standards
d. Adhere to generally accepted accounting principles
19. 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 laws
b. Avoidance of conflict of interest
c. Refrain from improper use of inside information
d. Maintenance of appropriate level of professional competence
20. Under the express terms of the Code of Ethics for Management
accountants, management accountants may not
a. Advertise
b. Encroach on the practice of another financial
manager/management accountant
c. Disclose confidential information unless authorized or legally
obliged
d. Accept other employment while serving as a financial
manager/management accountant
21. 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. He/she should report the circumstances to
the audit committee and/or the board of directors only if
Management Advisory Services, Comprehensive CPA Reviewer, Cabrera, 2017 Edition
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.
c. The immediate superior reports the situation to his/her superior.
d. The immediate superior, the firm’s executive officer, knows
about the situation, but refuses to correct it.
22. In which situation is a financial manager/management accountant
permitted to communicate confidential information to individuals or
authorities outside the firm?
a. There is ethical conflict, and the board has refused to act.
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.
23. The Code of Ethics for Management Accountants includes an integrity
standard, which requires the financial manager/management
accountant to
a. Identify and make known anything that may hinder his/her
judgement or prevent satisfactory completion of any duties
b. Report any relevant information that could influence users of
financial statements
1. B 21. D
2. A 22. B
3. D 23. A
4. A
5. B
6. C
7. A
8. C
9. C
10. B
11. B
12. D
13. B
14. D
15. C
16. D
17. D
18. B
19. B
20. C

Management Advisory Services, Comprehensive CPA Reviewer, Cabrera, 2017 Edition