1. ____ is devoted to providing information for external users.
a. Management accounting
b. Financial accounting
c. Internal accounting
d. Cost accounting
ANSWER: b
2. Management accounting and financial accounting differ in that management accounting information is prepared
a. following prescribed rules.
b. using whatever methods the company finds beneficial.
c. for shareholders.
d. to summarize the whole company with little detail.
ANSWER: b
3. The primary objective of management accounting is
a. to provide shareholders and potential investors with useful information for decision-making.
b. to provide banks and other creditors with information useful in making credit decisions.
c. to provide management with information useful for planning and control of operations.
d. to provide the relevant taxation authorities with information about taxable income.
ANSWER: c
4. Management accounting is the branch of accounting concerned with reporting to
a. internal managers.
b. shareholders.
c. the government.
d. bankers.
ANSWER: a
5. Which of the following characteristics does NOT pertain to management accounting?
a. Provides information and estimates about future activity
b. Generates specific-purpose financial statements and reports
c. Provides financial and operating data multidisciplinary in scope
d. Has externally imposed standards
ANSWER: d
6. Which of the following does NOT describe management accounting?
a. Evaluation of segments or products within the firm
b. Emphasis on the future
c. Externally focused
d. Detailed information
ANSWER: c
7. Management accounting reports are prepared
a. to meet the needs of decision-makers within the firm.
b. whenever shareholders request them.
c. according to guidelines prepared by the shares and Financial Services Authority.
d. according to financial accounting standards.
ANSWER: a
8. Cost accounting
a. is concerned with assigning costs to various cost objects.
b. attempts to satisfy the costing objectives of both financial accounting and management accounting.
c. provides cost information that supports planning, controlling, and decision-making.
d. All of the above descriptions are true.
ANSWER: d
9. Which of the following costing activities is associated with the financial accounting system?
a. Determining the cost of a department
b. Determining the cost of goods sold for financial statements
c. Preparing budgets
d. Determining the cost of a customer
ANSWER: b
10. Which of the following activities is NOT associated with the financial accounting information system?
a. Reporting on the cost of quality
b. Reporting to the shareholders
c. Preparing reports for the tax authorities
d. Preparing a statement of cash flows
ANSWER: a
11. Factors that have led to a global market for manufacturing and service firms are
a. improved transportation and communications systems.
b. improved telemarketing and communications.
c. improved distribution and transportation systems.
d. None of these factors have contributed.
ANSWER: a
12. Total quality management emphasizes
a. zero defects.
b. continual improvement.
c. elimination of waste.
d. all of the above.
ANSWER: d
13. Which of the following emerging themes in cost accounting deals with managers striving to create an environment that will enable workers to manufacture perfect (zero-defect) products?
a. Advances in information technology
b. Time as a competitive element
c. Global competition
d. Total quality management
ANSWER: d
14. Competitive advantage is established by
a. providing more customer products than competitors.
a. Management accounting
b. Financial accounting
c. Internal accounting
d. Cost accounting
ANSWER: b
2. Management accounting and financial accounting differ in that management accounting information is prepared
a. following prescribed rules.
b. using whatever methods the company finds beneficial.
c. for shareholders.
d. to summarize the whole company with little detail.
ANSWER: b
3. The primary objective of management accounting is
a. to provide shareholders and potential investors with useful information for decision-making.
b. to provide banks and other creditors with information useful in making credit decisions.
c. to provide management with information useful for planning and control of operations.
d. to provide the relevant taxation authorities with information about taxable income.
ANSWER: c
4. Management accounting is the branch of accounting concerned with reporting to
a. internal managers.
b. shareholders.
c. the government.
d. bankers.
ANSWER: a
5. Which of the following characteristics does NOT pertain to management accounting?
a. Provides information and estimates about future activity
b. Generates specific-purpose financial statements and reports
c. Provides financial and operating data multidisciplinary in scope
d. Has externally imposed standards
ANSWER: d
6. Which of the following does NOT describe management accounting?
a. Evaluation of segments or products within the firm
b. Emphasis on the future
c. Externally focused
d. Detailed information
ANSWER: c
7. Management accounting reports are prepared
a. to meet the needs of decision-makers within the firm.
b. whenever shareholders request them.
c. according to guidelines prepared by the shares and Financial Services Authority.
d. according to financial accounting standards.
ANSWER: a
8. Cost accounting
a. is concerned with assigning costs to various cost objects.
b. attempts to satisfy the costing objectives of both financial accounting and management accounting.
c. provides cost information that supports planning, controlling, and decision-making.
d. All of the above descriptions are true.
ANSWER: d
9. Which of the following costing activities is associated with the financial accounting system?
a. Determining the cost of a department
b. Determining the cost of goods sold for financial statements
c. Preparing budgets
d. Determining the cost of a customer
ANSWER: b
10. Which of the following activities is NOT associated with the financial accounting information system?
a. Reporting on the cost of quality
b. Reporting to the shareholders
c. Preparing reports for the tax authorities
d. Preparing a statement of cash flows
ANSWER: a
11. Factors that have led to a global market for manufacturing and service firms are
a. improved transportation and communications systems.
b. improved telemarketing and communications.
c. improved distribution and transportation systems.
d. None of these factors have contributed.
ANSWER: a
12. Total quality management emphasizes
a. zero defects.
b. continual improvement.
c. elimination of waste.
d. all of the above.
ANSWER: d
13. Which of the following emerging themes in cost accounting deals with managers striving to create an environment that will enable workers to manufacture perfect (zero-defect) products?
a. Advances in information technology
b. Time as a competitive element
c. Global competition
d. Total quality management
ANSWER: d
14. Competitive advantage is established by
a. providing more customer products than competitors.