chapt 1

Exam

Name___________________________________

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) The Hola Company held a Christmas party. The company expected attendance of 100 persons andprepared the following budget:

Hotel room rental $500Food 500Entertainment 800Decorations 400

Totals $2,200

After all bills for the party were paid, the total came to $2,315. Details are: $575 for hotel roomrental; $640 for food; $750 for entertainment; and $350 for decorations. One hundred personsattended the party.

What is the total budget variance?

1)

A) $140 unfavorable is the total budget variance.B) $25 favorable is the total budget variance.C) $115 unfavorable is the total budget variance.D) $115 favorable is the total budget variance.

2) Which of the following statements is true? 2)A) Management accounting information tends to be more detailed than financial accounting.B) Management accounting information is used by organization managers at various levels.C) Management accounting plays a vital role in the achievement of a company's goals and

objectives.D) All of these answers are correct.

3) The various stages through which a product passes are called the ________. 3)A) market analysis B) product initiativeC) production plan D) product life cycle

4) The codes of conduct for integrity include all of the following except ________. 4)A) recognizing and communicating professional limitationsB) avoiding actual or apparent conflicts of interestC) communicating information subjectivelyD) refusing any gift that would influence the accountant's actions

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5) The Beta Sorority held a party. The sorority prepared the following budget for 25 expectedattendees:

Room rental $150Food 310Entertainment 150Decorations 75

Totals $685

After all bills for the party were paid, the total came to $760. Details are: $240 for room rental; $320for food; $145 for entertainment; and $75 for decorations. Twenty-five persons attended the party.

Which of the following costs deserves further examination assuming the sorority uses themanagement-by-exception rule?

5)

A) Decorations deserve further examination.B) Room rental deserves further examination.C) Entertainment deserves further examination.D) Food deserves further examination.

6) Stable sales level corresponds to which stage of the product life cycle? 6)A) Product development stage corresponds to a stable sales level.B) Phase-out of product stage corresponds to a stable sales level.C) Introduction to market stage corresponds to a stable sales level.D) Mature market stage corresponds to a stable sales level.

7) All of the following companies had significantly faulty accounting information in the past ten yearsexcept ________.

7)

A) Microsoft B) Xerox C) Enron D) Tyco

8) Nonprofit service organizations are similar to profit-seeking service organizations in that________.

8)

A) output is usually easy to define B) both use labor intensivelyC) major inputs and outputs can be stored D) all of these answers are correct

9) ________ is a formal mechanism for gathering, organizing, and communicating information aboutan organization's activities.

9)

A) Attention directing B) ScorekeepingC) Management accounting D) An accounting system

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10) The Omega Sorority held a Homecoming party. The sorority prepared the following budget for 25expected attendees:


Totals $665


What is the variance in food?

10)

A) $10 favorable is the food variance. B) $35 favorable is the food variance.C) $30 unfavorable is the food variance. D) $70 unfavorable is the food variance.

11) Customer service is the function of a value chain that includes ________. 11)A) the manner by which individuals or groups learn about the value and features of products or

servicesB) the mechanism by which products or services are delivered to the customerC) the support activities provided to the customerD) all of these answers are correct

12) Which of the following is a designation associated with independent auditors? 12)A) The CPA is associated with independent auditors.B) The CMA is associated with independent auditors.C) The IMA is associated with independent auditors.D) The CFM is associated with independent auditors.

13) The Omega Sorority held a Homecoming party. The sorority prepared the following budget for 25expected attendees:


Totals $645


What is the variance in hotel room rental?

13)

A) $30 favorable is the hotel room rental variance.B) $30 unfavorable is the hotel room rental variance.C) $35 favorable is the hotel room rental variance.D) $70 unfavorable is the hotel room rental variance.

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14) According to the Institute of Management Accountants' Statement of Ethical Professional Practice,the standard of confidentiality includes ________.

14)

A) disclosing all relevant informationB) the ongoing development of the accountant's knowledge and skillsC) avoiding actual or apparent conflicts of interestD) all of these answers are correct

15) Management accountants are similar to certified public accountants (CPAs) in that they ________. 15)A) adhere to codes of conductB) give opinions on financial statementsC) are licensed by the state board of public accountancyD) are independent of the company for which they work

16) Research and development is the function of a value chain that includes ________. 16)A) the generation of, and experimentation with, ideas related to new products, services, or

processesB) the detail and engineering of productsC) the manner by which individuals or groups learn about the value and features of products or

servicesD) the coordination and assembly of resources to produce a product or deliver a service

17) ________ is (are) the accounting system's effect on the decision of managers. 17)A) The cost-benefit balance B) Behavioral implicationsC) Computerization D) Simplicity

18) Below is a statement from the Institute of Management Accountants' Statement of EthicalProfessional Practice.

"Communicate information fairly and objectively."

It is an example of ________.

18)

A) competence B) integrity C) confidentiality D) objectivity

19) During the product development stage of the product life cycle, companies typically experience________.

19)

A) revenues without costs B) costs without revenuesC) both costs and revenues D) neither costs nor revenues

20) The Institute of Management Accountants has adopted a set of standards of ethical conduct, whichincludes codes of conduct regarding all of the following except ________.

20)

A) independence B) integrity C) competence D) confidentiality

21) According to the Financial Executives Institute, one function of controllership is ________. 21)A) investmentsB) reporting and interpreting financial informationC) short-term financingD) provision of capital

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22) ________ is the field of accounting that develops information for external decision makers such asstockholders, suppliers, banks, and government regulatory agencies.

22)

A) Tax accounting B) AuditingC) Financial accounting D) Management accounting

23) Which scorecard function is associated with the accumulation of data? 23)A) Scorekeeping is associated with the accumulation of data.B) Problem solving is associated with the accumulation of data.C) Attention directing is associated with the accumulation of data.D) None of these answers is correct.

24) Staff authority may be exerted ________. 24)A) laterally and upward, but not downwardB) downward and laterally, but not upwardC) downward, upward, and laterallyD) upward and downward, but not laterally

25) Timken Industries held a Christmas party. Timken expected attendance of 100 persons andprepared the following budget:


Totals $2,200


What is the variance in hotel room rental?

25)

A) $25 favorable is the hotel room rental variance.B) $70 favorable is the hotel room rental variance.C) $70 unfavorable is the hotel room rental variance.D) $140 unfavorable is the hotel room rental variance.

26) According to the Financial Executives Institute, one function of the treasurer is ________. 26)A) government reportingB) short-term financingC) reporting and interpreting financial informationD) tax administration

27) An example of a staff department at a clothes manufacturer is the ________. 27)A) sales department B) cutting departmentC) pressing department D) maintenance department

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28) Performance reports ________. 28)A) ignore areas that are presumed to be running smoothlyB) are deviations from a planC) are quantitative expressions of action plansD) provide feedback by comparing results with plans and by highlighting deviations from plans

29) Which scorecard function is associated with planning and control? 29)A) Problem solving is associated with planning and control.B) Scorekeeping is associated with planning and control.C) Attention directing is associated with planning and control.D) None of these answers is correct.

30) The largest U.S. association of professional accountants whose major interest ismanagement accounting is the ________.

30)

A) Institute of Management AccountantsB) American Institute of Certified Public AccountantsC) American Accounting AssociationD) Government Accounting Institute

31) Below is a statement from the Institute of Management Accountants' Statement of EthicalProfessional Practice.

"Refrain from disclosing confidential information acquired in the course of their work exceptwhen authorized, unless legally obligated to do so."

It is an example of ________.

31)

A) objectivity B) integrity C) competence D) confidentiality

32) Distribution is the function of a value chain that includes ________. 32)A) the support activities provided to the customerB) the mechanism by which products or services are delivered to the customerC) the manner by which individuals or groups learn about the value and features of products or

servicesD) all of these answers are correct

33) ________ is mainly concerned with the company's operating matters. 33)A) The chairman of the board B) The treasurerC) The controller D) The chief executive officer (CEO)

34) Department performance reports can be used to help department heads determine ________.: 34)A) who is primarily responsible for any deviations from plansB) how efficiently the department is operatingC) how effectively the department is operatingD) how effectively and efficiently the department is operating

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35) The Bluto Fraternity held a Homecoming party. The fraternity prepared the following budget for25 expected attendees:


Totals $625


What is the total budget variance?

35)

A) $10 unfavorable is the total budget variance.B) $35 unfavorable is the total budget variance.C) $70 unfavorable is the total budget variance.D) $10 favorable is the total budget variance.

36) ________ refers to accounting information developed for managerswithin an organization.

36)

A) Managerial accounting B) Internal auditingC) Tax accounting D) Financial accounting

37) All of the following are service organizations, except ________. 37)A) a public accounting firm B) a manufacturer of sporting goodsC) a dry cleaners D) a real estate brokerage

38) Management by exception ________. 38)A) focuses on areas that are presumed to be running smoothlyB) is a summary report of plan resultsC) is the quantitative expression of action plansD) provides feedback by comparing results with plans and by highlighting deviations from

plans

39) Which scorecard function is associated with making nonroutine decisions? 39)A) Attention directing is associated with making nonroutine decisions.B) Scorekeeping is associated with making nonroutine decisions.C) Problem solving is associated with making nonroutine decisions.D) None of these answers is correct.

40) Variances ________. 40)A) are deviations from a planB) ignore areas that are presumed to be running smoothlyC) are quantitative expressions of action plansD) provide feedback by comparing results with plans and by highlighting deviations from plans

41) A management audit would be performed by all of the following except ________. 41)A) a sneaker manufacturer B) a hospitalC) the General Accounting Office D) all of these answers are correct

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42) A clerk records a transaction in the accounting system. This activity would be classified as________.

42)

A) planning B) scorekeepingC) attention directing D) problem solving

43) The benefits of e-procurement are realized through ________. 43)A) reduced transaction cost and reduced transaction time from request to deliveryB) reduced transaction costC) reduced transaction time from delivery to saleD) reduced transaction time from request to delivery

44) A supplier to your company offers to let you, a management accountant, use the supplier'scondominium in Cancun for your vacation. Accepting the supplier's offer violates the ethicalstandard of ________.

44)

A) confidentiality B) competence C) objectivity D) integrity

45) The Bluto Fraternity held a Homecoming party. The fraternity prepared the following budget for25 expected attendees:


Totals $625

After all bills for the party were paid, the total came to $760. Details are: $140 for room rental; $320for food; $125 for entertainment; and $175 for decorations. Twenty-five persons attended theparty.

What is the main reason for the unfavorable total budget variance?

45)

A) Entertainment is the main reason. B) Room rental is the main reason.C) Food is the main reason. D) Decorations are the main reason.

46) Which of the following products have a product life cycle of a few months? 46)A) Planes have a product life cycle of a few months.B) Automobiles have a product life cycle of a few months.C) Electric stoves have a product life cycle of a few months.D) Fashion clothing has a product life cycle of a few months.

47) Complexity in accounting systems ________. 47)A) is desirable if it reflects the complexity of the underlying businessB) is necessary to manage the behavioral implications of the accounting systemC) frequently generates costs of gathering and interpreting data that often exceed prospective

benefitsD) can usually be justified on a cost-benefit basis

48) Buying manufacturing or operating inputs electronically is a type of ________. 48)A) B2C transaction B) B2B transaction C) A2B transaction D) C2B transaction

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49) Budgets ________. 49)A) ignore areas that are presumed to be running smoothlyB) are quantitative expressions of action plansC) are deviations from a planD) provide feedback by comparing results with plans and by highlighting deviations from plans

50) Broad concepts or guidelines and detailed practices that together make up accepted accountingpractice at a given time are referred to as ________.

50)

A) Internal Revenue Systems regulationsB) Generally Accepted Accounting Principles (GAAP)C) accounting rules and regulationsD) accounting conventions

51) ________ is (are) the primary consideration in choosing among accounting systems and methods. 51)A) Computerization B) The cost-benefit balanceC) Simplicity D) Behavioral implications

52) Launching a new product line is an example of ________. 52)A) decision making B) planningC) organization D) controlling

53) According to the Institute of Management Accountants' Statement of Ethical Professional Practice,the standard of competence includes:

53)


54) Production is the function of a value chain that includes ________. 54)A) the generation of, and experimentation with, ideas related to new products, services, or

processesB) the manner by which individuals or groups learn about the value and features of products or

servicesC) the coordination and assembly of resources to produce a product or deliver a serviceD) the detail and engineering of products

55) Internal auditors should have as their primary responsibilities ________. 55)A) attention directing and problem solving B) problem solving and scorekeepingC) problem solving only D) scorekeeping and attention directing

56) Organizing workers into departments and assigning activities to those departments is an exampleof ________.

56)

A) controlling B) planning C) analyzing D) budgeting

57) Ethical accountants are important to society because ________. 57)A) they pay their taxesB) they will not go to prison and waste taxpayers' moneyC) the information produced is reliableD) none of these answers is correct

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58) The greatest impact of the Foreign Corrupt Practices Act on the accounting system is that it________.

58)

A) specifies how to account for transactions with foreign countriesB) prohibits unethical practices by foreign investorsC) requires documentation of the adequacy of internal accounting controlsD) forbids bribery

59) All service organizations are similar in that ________. 59)A) major inputs and outputs can be stored B) output is usually difficult to defineC) there is very little labor D) they are capital intensive

60) Key Bank held an Independence Day party. Key Bank expected attendance of 100 persons andprepared the following budget:


Totals $2,100


What is the variance in food?

60)

A) $70 favorable is the food variance. B) $25 favorable is the food variance.C) $70 unfavorable is the food variance. D) $240 unfavorable is the food variance.

61) The Flintstone Company held a Groundhog Day party. The company expected attendance of 100persons and prepared the following budget:


Totals $2,200


Which of the following costs deserves further examination assuming the Flintstone Company usesthe management-by-exception rule?

61)

A) Hotel room rental deserves further examinationB) Entertainment deserves further examination.C) Food deserves further examination.D) Decorations deserve further examination.

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62) According to the Institute of Management Accountants' Statement of Ethical Professional Practice,the standard of objectivity includes ________.

62)


63) A company should be especially concerned that revenues are balanced with costs during whichstage of the product life cycle?

63)

A) Phase-out of product is the stage where a company should be especially concerned thatrevenues are balanced with costs.

B) Product development is the stage where a company should be especially concerned thatrevenues are balanced with costs.

C) Mature market is the stage where a company should be especially concerned that revenuesare balanced with costs.

D) Introduction to market is the stage where a company should be especially concerned thatrevenues are balanced with costs.

64) The just-in-time (JIT) philosophy attempts to reduce costs by reducing: 64)A) the number of products manufactured B) value-added activitiesC) manufacturing time D) all of these answers are correct

65) Which of the following items should be considered in addition to simplicity bymanagers when designing accounting systems?

65)

A) Cost-benefit balances should be considered.B) Cost-benefit balances and behavior implications should be considered.C) Behavior implications should be considered.D) None of these answers is correct.

66) Your close friend is a shareholder of the company that employs you, a management accountant.The friend asks you for information that is typically available only to company management.Sharing this information with your friend violates the ethical standard of ________.

66)

A) confidentiality B) objectivity C) competence D) integrity

67) Marketing is the function of a value chain that includes ________. 67)A) the manner by which individuals or groups learn about the value and features of products or

servicesB) the coordination and assembly of resources to produce a product or deliver a serviceC) the generation of, and experimentation with, ideas related to new products, services, or

processesD) the detail and engineering of products

68) A company earns most product revenue during which stages of the product life cycle? 68)A) Most product revenue is earned during the mature market and product development stages.B) Most product revenue is earned during the introduction to market and mature market stages.C) Most product revenue is earned during the phase-out of product and mature market stages.D) Most product revenue is earned during the product development and introduction to market

stages.

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69) ________ is a review to determine whether the policies and procedures specified by topmanagement have been implemented.

69)

A) The Foreign Corrupt Practices ActB) Generally Accepted Accounting Principles (GAAP)C) The Robinson-Patman ActD) A management audit

70) Certified public accountants are ________. 70)A) management accountants B) external auditorsC) government employees D) internal auditors

71) One advantage of the management-by-exception approach is that it ________. 71)A) allows managers to ignore aspects of the business outside their area of expertiseB) allows managers to ignore day-to-day concerns so they can focus on crisesC) takes advantage of computerizationD) frees managers from needless concern over operations that are running smoothly

72) The primary users of management accounting information are ________. 72)A) bankers B) suppliersC) internal decision makers D) governmental regulatory authorities

73) Which of the following is not a major factor causing changes in management accounting today? 73)A) Increasing importance of the service sector of the economy is not a major factor.B) Declining work ethic is not a major factor.C) E-commerce is not a major factor.D) Increased global competition is not a major factor.

74) All of the following are reasons to study management accounting except ________. 74)A) a person will become a better managerB) to help a person become a chartered accountant in the United StatesC) there will be more career opportunitiesD) none of these answers is correct

75) Product life cycles ________. 75)A) have nothing to do with product profitabilityB) are computerized bicyclesC) must be considered to effectively plan for productionD) are the same for all products

76) Reviewing the output of the department is an example of ________. 76)A) budgeting B) controlling C) planning D) analyzing

77) Which of the following statements is not true? 77)A) Management accounting information is used throughout the life cycle of products and

services.B) Management accounting information is used across the entire value chain of activities.C) Management accounting does not play a vital role in the achievement of a company's goals

and objectives.D) External accountants are expected to adhere to standards of ethical conduct.

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78) An accountant earns the designation of certified public accountant (CPA) by ________. 78)A) meeting an education requirementB) passing an examinationC) meeting a qualifying experience requirementD) all of these answers are correct

79) The Hola Company held a Christmas party. The company expected attendance of 100 persons andprepared the following budget:


Totals $2,200


What is the main reason for the unfavorable total budget variance?

79)

A) Decorations are the main reason. B) Hotel room rent is the main reason.C) Food is the main reason. D) Entertainment is the main reason.

80) A company can best reduce the life cycle costs of product and services by managing the revenuesand costs associated with which function of the value chain?

80)

A) Support is the best function to reduce the life cycle costs of product and services.B) Customer service is the best function to reduce the life cycle costs of product and services.C) Production is the best function to reduce the life cycle costs of product and services.D) Design is the best function to reduce the life cycle costs of product and services.

81) Systems that use computer-aided design and computer-aided manufacturing, togetherwith robots and computer-controlled machines, are called:

81)

A) robotic-computer systemsB) just-in-time (JIT) systemsC) computer-integrated manufacturing systems (CIM)D) manufacturing-robotic systems

82) At a clothing manufacturer, which department head holds line authority? 82)A) The head of the receiving department holds line authority.B) The head of the assembly department holds line authority.C) The head of the shipping department holds line authority.D) All of these answers are correct.

83) The acronym GAAP is most closely connected with ________. 83)A) the IRSB) financial accountingC) management accountingD) both management accounting and financial accounting

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84) Product and service process design is the function of a value chain that includes ________. 84)A) the generation of, and experimentation with, ideas related to new products, services, or

processesB) the manner by which individuals or groups learn about the value and features of products or

servicesC) the coordination and assembly of resources to produce a product or deliver a serviceD) the detail and engineering of products

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Answer KeyTestname: CHAPT 1

1) C2) D3) D4) C5) B6) D7) A8) B9) D

10) C11) C12) A13) A14) A15) A16) A17) B18) D19) B20) A21) B22) C23) A24) C25) A26) B27) D28) D29) C30) A31) D32) B33) C34) D35) B36) A37) B38) D39) C40) A41) D42) C43) A44) D45) D46) D47) C48) B49) B50) B

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Answer KeyTestname: CHAPT 1

51) B52) A53) B54) C55) A56) B57) C58) C59) B60) D61) C62) C63) A64) C65) B66) A67) A68) B69) D70) B71) D72) C73) B74) B75) C76) B77) C78) D79) C80) D81) C82) B83) B84) D

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chapt 1

Documents

c entertainment

d food

following budget

b room rental

total budget variance

b phaseout of product

c introduction

stored d