Managerial Accounting: Tools for Business Decision-Making 6th Canadian Edition by Jerry J. Weygandt

 
e)    The Corporate Controller must ensure that both internal and external information is adjusted to reflect these changes on the company’s data systems.

 
EXERCISES
 
 
Exercise 96
Financial accounting information and managerial accounting information have a number of distinguishing characteristics:
___      1.     Reporting standard is relevant to the decision to be made
___      2.     Classified financial statements
___      3.     Reports generally pertain to the company as a whole
___      4.     Reports generally pertain to subunits
___    5.     Reports issued quarterly or annually
___      6.     General-purpose reports
___      7.     Reports are used internally
___      8.     Prepared in accordance with generally accepted accounting principles
___      9.     Special purpose reports
___    10.     Limited to historical cost data
 
Instructions
For each of the characteristics listed, indicate which characteristics are more closely related to financial accounting by placing the letter "F" in the space to the left of the item and indicate those characteristics which are more closely associated with managerial accounting by placing the letter "M" to the left of the item
 
Solution 96 (4–5 min.)
1.    M
 
2.    F
 
3.    F
 
4.    M
 
5.    F
 
6.    F
 
7.    M
 
8.    F
 
9.    M
 
10.  F
 
 
Exercise 97
Are planning and controlling synonymous terms? Explain why or why not.
 
Solution 97
In everyday usage of the terms, they are often synonymous. In the accounting, budgeting, and business context they are distinct functions.
Planning requires management to look ahead and to establish objectives. These objectives are often diverse: maximizing short-term profits and market share, maintaining a commitment to environmental protection, and contributing to social programs. A key objective of management is to add value to the business under its control. Value is usually measured by the trading price of the company’s shares and by the potential selling price of the company.
Controlling is the process of keeping the company’s planned activities on track. In controlling operations, managers determine whether planned goals are being achieved. When there are deviations from targets, managers must decide how to remedy the situation.
 
Exercise 98 What are the responsibilities of the controller in an organization?
 
Solution 98
The controller’s responsibilities include (1) maintaining the accounting records; (2) maintaining an adequate system of internal control; and (3) preparing financial statements, tax returns, and internal reports.
 
 
Exercise 99
How do the roles of financial vice president, controller, and treasurer differ?
 
Solution 99
The financial VP reports to the president of the company, and supervises both the controller and treasurer. The treasurer supervises the financing function, has custody of physical assets, and manages the company’s cash and investments. The controller supervises the inputs and outputs of the accounting information system.
 
 
Exercise 100
Explain the differences between a staff position and a line position.
 
Solution 100
A line position works directly to perform the basic revenue objectives of a company so that it can generate revenues and stay in business, an example would include the role of a salesperson. A staff position has indirect responsibility for the company’s basic objectives and provides necessary support functions for other employees in their line functions, an example would include the role of a human resources professional.
 
 
Exercise 101
Your manager asks you to help him prepare the budget for your division. He estimates that total expenses will equal $100,000, but he reports $120,000. He argues that it will make it easier to keep costs within budget, and that everyone does it. What is the ethical issue in this case?