MAS Basic Concepts - Bobadilla

8/12/2019 MAS Basic Concepts - Bobadilla

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MODULE 1

BASIC CONCEPTS IN MANAGEMENT ACCOUNTING

1. The major functions of management is (are): A. strategic management and long-range planning.B. planning and decision making.C. identifying threats and opportunities for the firm.D. all of the above. Bobadilla

2. The process of identifying, measuring, analyzing, interpreting, and communicating informationin pursuit of an organization's goals is called A. managerial accounting C. managementB. financial accounting D. promotional activities Bobadilla

3. The primary objective of management accounting is A. to provide stockholders 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 supervising government agencies with information about the company’s

management affairs. Bobadilla

4. Management accounting information

A. uses historical cost as the basis for reports to managers who are making decisionsabout future courses of action.

B. should be developed and provided only if its benefits exceed its costs.C. does not reflect the financial criteria of verifiability or consistency.D. should serve the basic needs of investors and creditors. Bobadilla

5. Which of the following is included in the day-to-day work of the management team? A. decision making C. controllingB. planning D. all of the above Bobadilla

6. Paying rent, purchasing supplies, and purchasing inventory are which of the day-to-day workactivities of the management team? A. decision making C. directing operational activitiesB. planning D. only A and B Bobadilla

7. Which of the following statements is true when comparing managerial accounting to

financial accounting? A. Managerial accounting places more emphasis on precision than finaB. Both are highly dependent on timely information.C. Both rely on the same accounting information system.D. Managerial accounting is concerned with external decision makers.

8. Which of the following is true of managerial accounting rather than financ A. The outputs of this accounting system are the primary financial statemB. The methods of this accounting system are established by an overse

C. The accounting methods are standardized to allow comparisons amoD. The accounting system would be unique to each company.

9. Management accounting’s role in the control processes is to provide A. managers with information that can be used t o determine customer B. investors and creditors information on the financial stability of the coC. managers with relevant information to compare with expectations.D. input to managers on the best ways to achieve continuous

production process.

10. Which of the following statements are true regarding financial and managI. Both are mandatory.II. Both rely on the same underlying financial data.III. Both emphasize the segments of an organization, rather than j

organization as a whole.IV. Both are geared to the future, rather than to the past. A. I, II, III, and IV C. Only II and IIIB. Only II, III and IV D. Only II

11. Managerial accounting activity adds value to an organization by pursuing which include A. providing information for decision making and planning.B. measuring the performance of activities within an organization.C. assisting managers in directing and controlling operational activities.D. all of them

12. Managerial accounting places considerable weight on: A. generally accepted accounting principles.

B. the financial history of the entity.C. ensuring that all transactions are properly recorded.



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D. detailed segment reports about departments, products, and customers. Bobadilla

13. Which of the following statement is FALSE? A. Managerial accounting need not conform to GAAP.B. Financial accounting reports focus on subunits of the organization.C. Managerial accounting is not requiredD. Managerial accounting focuses on the needs of internal users. Bobadilla

14. For internal uses, managers are more concerned with receiving information that is:

A. completely objective and verifiable.B. completely accurate and precise.C. relevant, flexible, and immediately available.D. relevant, completely accurate, and precise. Bobadilla

15. Which of the following statements is correct? A. A certified public accountant can readily render management advisory services to the

public.B. A CPA with MBA and DBM degrees is automatically qualified to render management

advisory services.C. Competence as a standard in the rendition of management advisory services by a CPA

may be equated to having excellent scholarly preparation to include the usualbaccalaureate degree, an MBA and other post graduate studies.

D. Adequate training and experience in both the analytical approach and process in a

particular undertaking are requisites for the CPA to be involved in a managementadvisory service engagement. (RPCPA)

16. The following characterize management advisory services except A. It involves decision for the futureB. It broader in scope and varied in natureC. It utilizes more junior staff than senior members of the firmD. It relates to specific problems where expert help is required Bobadilla

17. Which of the following statements is incorrect? A. CPAs provide management advisory services to go around the ethical constraints as

mandated by the Accountancy Law.B. Businesses hire management consultants to help define specific problems and develop

solutions.

C. CPAs who are performing management advisory services may be considered to be inthe practice of management consulting.

D. Included in the practice of consulting is the provision of confidentialidentity of the client is concealed.

18. The primary purpose of management advisory services is A. To conduct special studies, preparation of recommendations, devel

programs, and provision of advice and assistance in their implemenB. To provide services or to fulfill some social needs.C. To improve the client’s use of its capabilities and resources to achi

the organization.

D. To earn the best rate of return on resources entrusted to its investment being taken into account and consistent with firmresponsibilities.

19. Managerial accounting information: A. pertains to the entity as a whole and is highly aggregated.B. pertains to subunits of the entity and may be very detailed.C. is prepared only once a year. D. is constrained by the requirements of generally accepted accounting

20. Managerial accounting is primarily concerned with: A. segments of a company rather than the company as a whole.B. the data needs of stockholders and creditors.C. meeting the requirements of generally accepted accounting principle

D. the company as a whole rather than a segment of the organization.

21. The major reporting standard for presenting managerial accounting inform A. relevanceB. generally accepted accounting principlesC. the cost principleD. the current tax law

22. With respect to the time dimension, how does managerial decision coperformance evaluation?

Bobadilla A. B. C.

Managerial Decision Making Past Past Future External Performance Past Future Past

23. Managerial accounting differs from financial accounting in that it is A. more concerned with segments of a company.



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B. less constrained by rules and regulations.C. more concerned with the future.D. all of the above. Bobadilla

24. The distinction between traditional accounting and cost management is A. the focus of the former on accounting matters and the latter in support to management in

making the right decisions for staying on a competitive positionB. the emphasis of former on record keeping and the latter on reportingC. the focus of the former on cost cutting and the latter on product differentiation

D. the focus of the former on efficiency and the latter on quality. Bobadilla

25. Which of the following activities is not usually performed by a management accountant? A. Assisting managers to interpret data in managerial accounting reports.B. Designing systems to provide information for internal and external reports.C. Gathering data from sources other than the accounting system.D. Deciding the best level of inventory to be maintained. Bobadilla

26. Which of the foll owing statements correctly distinguishes fin ancial and managerialaccounting? A. managerial accounting reports on the whole organizationB. financial accounting is oriented toward the futureC. financial accounting is primarily concerned with providing information for internal usersD. managerial accounting is oriented more toward the planning and control aspects of

management Bobadilla

27. How does managerial decision making compare with external performance evaluation?Managerial Decision Making External Performance Evaluation

A. Detailed DetailedB. Detailed More aggregatedC. More aggregated DetailedD. More aggregated More aggregated

Bobadilla

28. Management accountants would not A. assist in budget planning.B. prepare reports primarily for external users.C. determine cost behavior.

D. be concerned with the impact of cost and volume on profits. Bobadilla

29. In the contemporary business environment, cost management focus is on A. financial reporting and cost analysis.B. common emphasis on standardization and standard costs.C. development and implementation of the business strategy.D. all of the above.

30. Management accounting is similar to financial accounting in that A. both are governed by generally accepted accounting principles.B. both deal with economic events.

C. both concentrate on historical data.D. both classify reported information in the same manner.

31. How frequent is management accounting report when compared to repoManagement Accounting Report External Re

A. More frequent Less frequB. More frequent More frequC. Less frequent Less frequD. Less frequent More frequ

32. Managerial accounting differs from financial accounting in that financial A. more oriented toward the future.B. primarily concerned with external financial reporting.

C. concerned with nonquantative information.D. heavily involved with decision analysis and implementation of decis

33. Managerial accounting provides data for all of the following major objectiv A. planning and control of costsB. supporting management planningC. compliance with SEC reporting requirementsD. determining the costs of products

34. Which statement is false? Managerial accounting information: A. involves planning for the futureB. should be requested and used by management even if it is very

analyzeC. helps managers make financing decisions

D. need not comply with generally accepted accounting principles



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35. Internal reports must be communicated A. daily C. annuallyB. monthly D. as needed Bobadilla

36. Which of the following does not apply to the content of managerial reports? A. Reporting standard is relevant to the decision to be m ade.B. May extend beyond double-entry accounting system.C. Pertain to subunits of the entity and may be very detailed.D. Pertains to the entity as a whole and is highly aggregated. Bobadilla

37. Which consideration influences the frequency of an internal report? A. The wishes of the managers receiving the report.B. The frequency with which decisions are made that require the information in the report.C. The cost of preparing the report.D. All of the above. Bobadilla

38. Which of the following statements about internal reports is not true? A. The content of internal reports may extend beyond the double-entry accounting system.B. Internal reports may show all amounts at market values.C. Internal reports may discuss prospective events.D. Most internal reports are summarized rather than detailed. Bobadilla

39. Management accountants help develop and maintain reporting systems that are aligned with

organizational structures and that provide useful information on an organization’sperformance. Management decision processes fall into three categories that consist of A. Nonrepetitive, nonprogrammed, and nonstrategic.B. Repetitive, nonprogrammed, and strategic.C. Repetitive, programmed, and strategic.D. Nonrepetitive, nonprogrammed, and strategic. Bobadilla

40. Internal reports are generally A. aggregated C. regulatedB. detailed D. unreliable Bobadilla

41. Managerial accounting reports can be described as: A. general-purpose C. classified financial statementsB. special purpose D. macro-report Bobadilla

42. The informational needs of internal users/management:

A. are historical in natureB. emphasize the company as a wholeC. emphasize accuracy over timelinessD. may require more customized reports than external financial stateme

43. The role of the managerial accountant in today’s corporate world includeexcept: A. interpreting financial information C. financial modelingB. financial planning D. bookkeeping

44. Which of the following is most associated with managerial accounting? A. Must follow generally accepted accounting principles.B. May rely on estimates and forecasts.C. Is prepared for users outside the organization.D. Always reports on the entire entity.

45. Which statement about the extent of detail in a management accounting A. It may depend on the frequency of the report.B. It depends on the type of manager receiving the report.C. It depends on the level of the manager receiving the report.D. All of the above.

46. Managerial accounting information

A. pertains to the entity as a whole and is highly aggregated.B. pertains to subunits of the entity and may be very detailed.C. is prepared only once a year. D. is constrained by the requirements of generally accepted accounting

47. Which of the following characteristics is inherent to management accou A. Reporting of historical informationB. Compliance to generally accepted accounting principlesC. Contribution approach income statementD. External users of financial report

48. In order to be useful to managers, management accounting reports shofollowing characteristics except: A. Provide objective measures of past operations and subjective es

decisions.B. Be prepared in accordance with generally accepted accounting prin



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73. Which of the following is not a separate management function? A. Motivating C. ControllingB. Planning D. Decision-making Bobadilla

74. Total quality management emphasizes A. zero defects C. elimination of wasteB. continual improvement D. all of the above Bobadilla

75. Automation of the manufacturing process increases A. the quantity of informati on C. the number of production employeesB. the timeliness of information D. both a and b Bobadilla

76. Which of the following emerging themes in cost accounting deals with managers striving tocreate and environment which will enable workers to manufacture perfect (zero defect)products? A. customer orientation C. total quality management BobadillaB. global competition D. advance in information technology

77. Managerial accounting creates value by: A. by forcing managers to analyze historical figures and interpret the resultsB. by eliminating all pricing and costing errorsC. by focusing managers attention on the relationship between financial and non-financial

factorsD. all of the above Bobadilla

78. Systems implemented to reduce defects in finished products with the goal of achievingzero defects are A. activity-based costing systems.B. enterprise resource planning systems.C. value chain systems.D. total quality management systems. Bobadilla

79. Which of the following functions is most directly related to management by objective? A. Reporting C. ControlB. Decision making D. Planning Bobadilla

80. The setting of objectives and the identification of methods to achieve those objectives iscalled

A. planning C. decision makingB. controlling D. performance evaluati

81. Which of the following best describes what performance evaluation should A. Modify goal and objectives each month C. Compare actual resuB. Establish sales goals and targets D. Establish blame

82. In the planning and control process, what is the proper sequence of event A. Set goals, set objectives, develop plans, implement plans, evaluate p

B. Establish a master budget, set standard costs, develop variance anaC. Develop engineered costs, develop pricing targets, calculate contribuD. Identify variable costs, identify fixed costs, project the sales mix, dete

83. Which of the following is a staff position? A. vice-president of production C. vice-president of finaB. vice-president of marketing D. plant foreman

84. Which management position is responsible for raising capital? A. Internal auditor C. ControllerB. Treasurer D. CFO

85. All of the following would be considered staff functions EXCEPT: A. the vice-president of finance

B. the vice-president of corporate planningC. the vice-president of research and developmentD. the vice president of marketing

86. Management accountants generally exercise which type of authority? A. Company. C. Line.B. Functional. D. Staff.

87. The treasurer function is usually not concerned with A. investor relations.B. financial reports.C. short-term financing.D. credit extension and collection of bad debts.

88. Which of the following duties is usually assigned to the controller? A. directing the granting of credit t o clients



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104. Obtaining feedback is generally identified most directly with which of the functions ofmanagement? A. Planning C. ControllingB. Directing and motivating D. Decision making Bobadilla

105. A staff position: A. relates directly to the carrying out of the basic objectives of the organization.B. is supportive in nature, providing service and assistance to other parts of the

organization.C. is superior in authority to a line position.D. none of these. Bobadilla

106. The controller occupies: 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. Bobadilla

107.“Racing with no finish” refers to A. developing the best selling product.B. research and development.

C. benchmarking and continuous improvement.D. designing the highest quality product in a given segmented market. Bobadilla

108. A company’s value chain reflects the A. organizational levels of authority and responsibility.B. stages of production from raw materials to finished goods.C. linked set of activities that increase the value of products or services.D. sales distribution network for the company’s products and services. Bobadilla

109.The process of comparing, investigating, and evaluating the comp any’s processes orproducts against the best level of performance is known as A. attestation. C. product review.B. feedback. D. benchmarking. Bobadilla

110.Benchmarking allows managers to: A. determine who in the industry performs similar processes most effectively.

B. determine the processes that have high value-to-cost relationships.C. compare certain internal processes, services and activities to those

in order to identify strengths and weaknesses.D. reproduce another company’s pr oduct design and manufacturing pr

competitive advantage.

MAS Basic Concepts - Bobadilla

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