Managerial Accounting Tenth Canadian Edition Test Bank

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1Student: ___________________________________________________________________________1.Day-to-day decision making is most common to which of the following activities managers areexpected to carry on in organizations?A.Strategyformulation.B.Directing and motivating.C.Planning.D.Budgeting.2.Identifying alternatives and selecting the best among them is part of which of the followingactivities which managers carry on in organizations?A.Controlling.B.Directing.C.Planning.D.Motivating.3.Budgeting is part of which of the following activities managers perform in organizations?A.Controlling.B.Directing.C.Planning.D.Motivating.4.Obtaining feedback is generally identified most directly with which of these functions ofmanagement?A.Planning.B.Directing and motivating.C.Controlling.D.Decision making.

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5.Which of the following best describes the role of astaff position in an organization?A.It relates directly to the carrying out of the basic objectives of the organization.B.It is supportive in nature, providing service and assistance to other parts of the organization.C.It issuperior in authority to a line position.D.It receives assistance from other parts of organization It relates directly to achieve the basicobjectives of organization embedded in them and it is superior in authority to a line position.6.Which of the following positions does the controller occupy in an organization?A.A line position.B.A staff position.C.Neither a line nor a staff position, since the accounting department must be independent.D.Both a line and a staffposition.7.Which of the following best describes the function of managerial accounting within anorganization?A.It has its primary emphasis on the future.B.It is required by regulatory bodies such as the Ontario SecuritiesCommission.C.It focuses on the organization as a whole, rather than on the organization's segments.D.It places more emphasis on precision of data than financial accounting does.8.Upon which of the following does managerialaccounting place considerable weight?A.Generally accepted accounting principles.B.The financial history of the entity.C.Ensuring that all transactions are properly recorded.D.Detailed segment reports about departments, products, and customers.9.For internal uses, managers are more concerned with receiving information that achieves whichof the following standards?A.Completely objective and verifiable.B.Completely accurate and precise.C.Relevant,flexible, and timely.D.Relevant, completely accurate, and precise.

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10.Which of the following would be an example of a performance report?A.An income statement reporting actual results for the past month.B.An income statementshowing the amounts budgeted for the past month.C.A balance sheet showing the actual financial position at the end of the past month.D.A production report showing budgeted and actual production for the past month.11.Which of the following isNOTone of the three major customer value propositions discussed inthe text?A.Customer intimacyB.Discount pricingC.Operational excellenceD.Product leadership12.Which of the following isNOTa topic relating to managing and improving business processes?A.Lean Production.B.Corporate Governance.C.Enterprise Systems.D.Risk Management.13.The delegation of decision makingthroughout an organization by providing managers at variousoperating levels with the authority to make key decisions relating to their area of responsibility iswhich of the following?A.Risk management.B.Corporate socialresponsibility.C.Decentralization.D.A staff position.14.Which one of the following isNOTan activity in the planning and control cycle?A.Comparing actual to planned performance.B.Raw materials are released toproduction far in advance of being needed to ensure nointerruptions in work flows due to shortages of raw materials.C.Formulating long and short-term plans.D.Measuring performance.

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15.Which of the following isNOTan example of a business risk?A.Products harming customers.B.A website malfunctioning.C.A customer value proposition.D.An employee accessing unauthorized information.16.All three major professional accounting groups inCanada require their members to undertakeprofessional development and/or continuing education. This practice is intended to directly satisfywhich of these rules of ethical conduct in line with other code of ethics?A.Integrity.B.Objectivity.C.Competence.D.Confidentiality.17.Samantha Galloway is a managerial accountant in the accounting department of MustangIndustries, Inc. Samantha has just discovered evidence that some of the corporation's marketingmanagers have beenwrongfully inflating their expense reports in order to obtain higherreimbursements from the firm. According to the Institute of Management Accountants' Standardsof Ethical Conduct, what should Samantha do upon discovering this evidence?A.Notify the controller.B.Notify the marketing managers involved.C.Notify the president of the corporation.D.Ignore the evidence because she is not part of the Marketing Department.18.Both financial and managerial accounting rely on the sameunderlying financial data but there aremajor differences. Managerial Accounting:A.emphasizes financial consequences of past activities.B.emphasizes precision.C.emphasizes relevance.D.must follow GAAP.

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19.After carefulplanning, Jammu Manufacturing Corporation has decided to switch to a just-in-timeinventory system as a component of the lean thinking model. At the beginning of this switch,Jammu has 30 units of product in inventory. Jammu has 2,000 labour hours available in the firstmonth of this switch. These hours could produce 500 units of product. Customer demand for thisfirst month is 400 units. If just-in-time principles are correctly followed, how many units shouldJammu plan to produce in the first month of theswitch?A.370B.400C.430D.47020.Which of the following facets of the lean thinking model is often called just-in-time production?A.Identify value in specific products/services.B.Identify the business process thatdelivers value.C.Create a pull system that responds to customer orders.D.Organize work arrangements around the flow of the business process.21.Which of the following groups should be the focal point of a company's strategy?A.EmployeesB.Board of directorsC.ShareholdersD.Target customers22.The purpose of IFRS is:A.To encourage Strategic planning.B.To enhance the comparability and clarity of financial information on a global basis.C.Toencourage disclosure of Non-Financial data.D.To change how management accountants prepare reports.

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23.In Canada, the manager in charge of the Accounting Department is usually known as the:A.CFOB.ControllerC.Vice-President OperationsD.President24.Which of the following is the stakeholder group whose interests are to be directly and formallyprotected by effective corporate governance?A.CustomersB.CreditorsC.ShareholdersD.Suppliers25.An important part of planning is to identify alternatives and then to select from among thealternatives the one that best meets the organization's objectives.TrueFalse26.The controller occupies a staff position in an organization.TrueFalse27.Persons occupying staff positions provide support and assistance to other parts of theorganization.TrueFalse28.Informal relationships and channels of communication often develop that do not appear on theorganization chart.TrueFalse29.Managerial accounting places less emphasis on precision and more emphasis on timeliness ofdata than financial accounting does.TrueFalse30.Managerial accounting isNOTgoverned by generally accepted accounting principles (GAAP).TrueFalse

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31.In general, accounting data serve both financial accounting and managerial accountingpurposes.TrueFalse32.Top management make most of the decisions in decentralizedorganizations.TrueFalse33.Managerial accounting plays a critical role in providing information to management to facilitateimplementing and monitoring strategy.TrueFalse34.Business codes of ethics prescribe minimum acceptable behaviours for all employeesexceptemployees belonging to one of the three major professional accounting groups in Canada.TrueFalse35.Emphasis on the future is given equal weight by both managerial accounting and financialaccounting.TrueFalse36.A strategy is a game plan that enables a company to attract customers by distinguishing itselffrom competitors.TrueFalse37.Both the controller and CFO are staff positions.TrueFalse38.A customer value proposition is essentially a reason for customers to choose a company'sproducts over its competitors' products.TrueFalse39.Customer value propositions tend to fall into three broadcategories--customer intimacy,operational excellence, and product leadership.TrueFalse

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40.Companies that adopt a customer intimacy strategy are in essence saying to their targetcustomers, "The reason you should choose us is because we understand and respond to yourindividual needs better than our competitors."TrueFalse41.Companies that choose an operational excellence strategy are in essence saying to theircustomers, "Choose us rather than our competitors because we strive for zero defects."TrueFalse42.Corporate governance is the legal framework that allows managers to control and direct lower-level workers on the job.TrueFalse43.A value chain consists of the major business functions that add value to the company's productsand services.TrueFalse44.Managerial accounting is not mandatory.TrueFalse45.Many customers seek to purchase products and services from socially responsible companies.TrueFalse46.Leanproduction is often called just-in-time production.TrueFalse

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47.You have recently been hired by a manufacturing company. Two days ago, you met with the topmanagement of the company to discuss future strategies for the firm. During the meeting, thepresident of the company expressed concern about the profitability of the company and thecompany's ability to compete effectively in the future. You responded to the president's concernsby mentioning some articles you had read in professional accounting journals regarding the leanthinking model. The president responded toyour comments by saying that although the leanthinking model sounded interesting, no one in the company was knowledgeable about it. Thepresident then requested that you prepare a brief summary of the lean thinking model for the nextstrategic planning meeting.Required:a. Describe the lean thinking model and how it differs from traditional manufacturing methodsb. List some of the benefits of the lean thinking model.48.How much it costs a company to manufacture a particular product is one of the many questionsthat reports typically provided by managerial accountants help to answer.Required:Comment on the usefulness of a unit product costinformation in the preparation of a set offinancial statements?

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49.Provide three examples of common business risks faced by companies.

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1Key1.Day-to-day decision making is most common to which of thefollowing activities managers areexpected to carry on in organizations?A.Strategy formulation.B.Directing and motivating.C.Planning.D.Budgeting.Accessibility: Keyboard NavigationBlooms: UnderstandCPA Competency: 3.1.1Evaluates management information requirements.Difficulty: MediumGarrison-Chapter 01 #1Learning Objective: 01-01 Describe the functions performed by managers.Topic: 01-02 Identify the major differences and similarities between financial and managerial accounting.2.Identifying alternatives and selecting the best among them is part of which of the followingactivities which managers carry on in organizations?A.Controlling.B.Directing.C.Planning.D.Motivating.Accessibility: Keyboard NavigationBlooms: UnderstandCPA Competency: 3.1.1 Evaluates management information requirements.Difficulty: MediumGarrison-Chapter 01 #2Learning Objective: 01-01 Describe the functions performed by managers.Topic: 01-01 Planning.3.Budgeting is part of which of the following activities managers perform in organizations?A.Controlling.B.Directing.C.Planning.D.Motivating.Accessibility: Keyboard NavigationBlooms: UnderstandCPACompetency: 3.1.1 Evaluates management information requirements.Difficulty: EasyGarrison-Chapter 01 #3

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Learning Objective: 01-01 Describe the functions performed by managers.Topic: 01-01 Planning.4.Obtaining feedback is generallyidentified most directly with which of these functions ofmanagement?A.Planning.B.Directing and motivating.C.Controlling.D.Decision making.Accessibility: Keyboard NavigationBlooms: UnderstandCPA Competency: 3.1.1Evaluates management information requirements.Difficulty: EasyGarrison-Chapter 01 #4Learning Objective: 01-01 Describe the functions performed by managers.Topic: 01-03 Controlling.5.Which of the following best describes the role of a staffposition in an organization?A.It relates directly to the carrying out of the basic objectives of the organization.B.It is supportive in nature, providing service and assistance to other parts of theorganization.C.It is superior in authority to a line position.D.It receives assistance from other parts of organization It relates directly to achieve the basicobjectives of organization embedded in them and it is superior in authority to a line position.Accessibility:Keyboard NavigationBlooms: RememberCPA Competency: 3.1.2 Evaluates the types of information systems used and the role they play in an organization.Difficulty: EasyGarrison-Chapter 01 #5Learning Objective: 01-03 Describe the role of management accountants in an organization.Topic: 01-14 Line and Staff Relationships.6.Which of the following positions does the controller occupy in an organization?A.A line position.B.A staff position.C.Neither a line nor a staff position,since the accounting department must be independent.D.Both a line and a staff position.Accessibility: Keyboard NavigationBlooms: RememberCPA Competency: 3.1.2 Evaluates the types of information systems used and the role they play in anorganization.Difficulty: EasyGarrison-Chapter 01 #6Learning Objective: 01-03 Describe the role of management accountants in an organization.Topic: 01-14 Line and Staff Relationships.

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Topic: 01-15 The Controller.7.Which of the following best describes the function of managerial accounting within anorganization?A.It has its primary emphasis on the future.B.It is required by regulatory bodies such as the Ontario Securities Commission.C.It focuses on the organization as awhole, rather than on the organization's segments.D.It places more emphasis on precision of data than financial accounting does.Accessibility: Keyboard NavigationBlooms: RememberCPA Competency: 3.1.1 Evaluates management informationrequirements.Difficulty: EasyGarrison-Chapter 01 #7Learning Objective: 01-02 Identify the major differences and similarities between financial and managerial accounting.Topic: 01-07 Emphasis on the Future.8.Upon which of the following doesmanagerial accounting place considerable weight?A.Generally accepted accounting principles.B.The financial history of the entity.C.Ensuring that all transactions are properly recorded.D.Detailed segment reports about departments, products, and customers.Accessibility: Keyboard NavigationBlooms: UnderstandCPA Competency: 3.1.1 Evaluates management information requirements.Difficulty: EasyGarrison-Chapter 01 #8Learning Objective: 01-02 Identify the majordifferences and similarities between financial and managerial accounting.Topic: 01-10 Segments of an Organization.9.For internal uses, managers are more concerned with receiving information that achieveswhich of the following standards?A.Completely objective and verifiable.B.Completely accurate and precise.C.Relevant, flexible, and timely.D.Relevant, completely accurate, and precise.Accessibility: Keyboard NavigationBlooms: UnderstandCPA Competency: 3.1.1Evaluates management information requirements.Difficulty: EasyGarrison-Chapter 01 #9Learning Objective: 01-02 Identify the major differences and similarities between financial and managerial accounting.Topic: 01-08 Relevance of Data.

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10.Which of the following would be an example of a performance report?A.An income statement reporting actual results for the past month.B.An income statement showing the amounts budgeted for the past month.C.A balance sheet showing the actual financial position at the end of the past month.D.A production report showing budgeted and actual production for the past month.Accessibility: Keyboard NavigationBlooms: UnderstandCPA Competency: 3.1.1 Evaluates managementinformation requirements.Difficulty: HardGarrison-Chapter 01 #10Learning Objective: 01-01 Describe the functions performed by managers.Topic: 01-03 Controlling.11.Which of the following isNOTone of the three major customer value propositions discussed inthe text?A.Customer intimacyB.Discount pricingC.Operational excellenceD.Product leadershipAccessibility: Keyboard NavigationBlooms: UnderstandCPA Competency: 3.1.1 Evaluates management informationrequirements.Difficulty: MediumGarrison-Chapter 01 #11Learning Objective: 01-01 Describe the functions performed by managers.Topic: 01-06 Strategy.12.Which of the following isNOTa topic relating to managing and improving businessprocesses?A.Lean Production.B.Corporate Governance.C.Enterprise Systems.D.Risk Management.Accessibility: Keyboard NavigationBlooms: UnderstandCPA Competency: 3.1.2Evaluates the types of information systems used and the role they play in an organization.Difficulty: EasyGarrison-Chapter 01 #12Learning Objective: 01-04 Explain the basic concepts of lean production; enterprise systems; and risk management.Topic: 01-16 Lean Production.Topic: 01-17 Enterprise Systems.Topic: 01-18 Risk Management.

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13.The delegation of decision making throughout an organization by providing managers atvarious operating levels with the authority to make key decisionsrelating to their area ofresponsibility is which of the following?A.Risk management.B.Corporate social responsibility.C.Decentralization.D.A staff position.Accessibility: Keyboard NavigationBlooms: UnderstandCPACompetency: 3.1.2 Evaluates the types of information systems used and the role they play in an organization.Difficulty: HardGarrison-Chapter 01 #13Learning Objective: 01-03 Describe the role of management accountants in an organization.Topic: 01-13 Decentralization.14.Which one of the following isNOTan activity in the planning and control cycle?A.Comparing actual to planned performance.B.Raw materials are released to production far in advance of being needed to ensure nointerruptions in work flows due to shortages of raw materials.C.Formulating long and short-term plans.D.Measuring performance.Accessibility: Keyboard NavigationBlooms: UnderstandCPA Competency: 3.1.1 Evaluates management information requirements.Difficulty: MediumGarrison-Chapter 01 #14Learning Objective: 01-01 Describe the functions performed by managers.Topic: 01-04 Decision Making.Topic: 01-05 The Planning and Control Cycle.15.Which of the following isNOTan example of a business risk?A.Products harming customers.B.A website malfunctioning.C.A customer value proposition.D.An employee accessing unauthorized information.Accessibility: KeyboardNavigationBlooms: UnderstandCPA Competency: 3.1.2 Evaluates the types of information systems used and the role they play in an organization.Difficulty: MediumGarrison-Chapter 01 #15Learning Objective: 01-04 Explain the basic concepts of leanproduction; enterprise systems; and risk management.Topic: 01-19 Identifying and Controlling Business Risks.

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