Question 1

Which of the following best represents a characteristic of managerial accounting?

Accepted Answer

A)  Information is historically based and reported annually. 
B)  Information is based on estimates and is bounded by relevance and timeliness. 
C)  Information is regulated by the Securities and Exchange Commission. 
D)  Information is characterized by reliability and objectivity. 
A)  Information is historically based and reported annually. 
B)  Information is based on estimates and is bounded by relevance and timeliness. 
C)  Information is regulated by the Securities and Exchange Commission. 
D)  Information is characterized by reliability and objectivity.

Question 2

Managerial accounting information is limited or restricted by which of the following authorities or principles?

Accepted Answer

A)  Securities and Exchange Commission 
B)  Generally Accepted Accounting Principles 
C)  Managerial Accounting Standards Board 
D)  Value-Added Principle 
A)  Securities and Exchange Commission 
B)  Generally Accepted Accounting Principles 
C)  Managerial Accounting Standards Board 
D)  Value-Added Principle

Question 3

A company that uses a just-in-time inventory system:

Accepted Answer

A)  has finished goods inventory on hand at all times in order to speed up shipments of customer orders. 
B)  may find that having less inventory actually leads to increased customer satisfaction. 
C)  assesses its value chain to create new value-added activities. 
D)  adopts a systematic, problem-solving attitude. 
A)  has finished goods inventory on hand at all times in order to speed up shipments of customer orders. 
B)  may find that having less inventory actually leads to increased customer satisfaction. 
C)  assesses its value chain to create new value-added activities. 
D)  adopts a systematic, problem-solving attitude.

Question 4

Assuming that the number of units produced exceeds the number of units sold,misclassifying period costs as product costs will overstate net income relative to what net income would be without this error.

Accepted Answer

A) True 
 B)False

Question 5

What is a value chain? And what relationship is there between the value chain and activity-based management?

Accepted Answer

The value chain is the sequence of activ

Question 6

Identify the false statement regarding how product costs in a manufacturing company differ from product costs in a service or merchandising company.

Accepted Answer

A)  Both manufacturing companies and service companies incur costs for supplies. 
B)  Manufacturing companies accumulate product costs in inventory accounts, while service companies do not. 
C)  Products of service companies such as restaurants are consumed immediately. 
D)  Most labor costs for merchandising companies are treated as product costs. 
A)  Both manufacturing companies and service companies incur costs for supplies. 
B)  Manufacturing companies accumulate product costs in inventory accounts, while service companies do not. 
C)  Products of service companies such as restaurants are consumed immediately. 
D)  Most labor costs for merchandising companies are treated as product costs.

Question 7

Match between columns
                        Premises:  An inventory flow system that minimizes the amount of inventory on hand
 The organization established by the accounting profession to develop accounting standards
 The area of accounting designed to meet information needs of internal users
 The government agency authorized to establish and regulate public company reporting practices
 Assessing the value chain to create new value-added activities
 Tasks that do not contribute to a product's ability to satisfy customer needs
 Costs incurred before the manufacturing process begins
 The process of changing an organization's production and delivery systems to make the organization more competitive
 The ongoing process through which employees become more effective and learn to work more efficiently
 The term used for the amount of product costs expensed in the current period

Accepted Answer

The Answer of Continuous improvement and Cost of goods sold is...

Question 8

Because management accountants prepare and analyze financial information used by company decision-makers,they are considered to be at the forefront of corporate governance.

Accepted Answer

A) True 
 B)False

Question 9

What are period costs? How does the accounting for period costs differ from the accounting for product costs?

Accepted Answer

Period costs include general,selling,and

Question 10

Howard Lumber Company mistakenly classified a product cost as an expense that totaled $20,000.The company produced 2,000 units of product and sold 1,000 of them during the year.Management is paid a bonus equal to 2% of net income.In the year in which the mistake was made:

Accepted Answer

A)  product costs were overstated. 
B)  management bonuses were underpaid. 
C)  the company's income statement portrayed a more favorable position than actually existed. 
D)  the company's net income was overstated. 
A)  product costs were overstated. 
B)  management bonuses were underpaid. 
C)  the company's income statement portrayed a more favorable position than actually existed. 
D)  the company's net income was overstated.

Question 11

The following information relates to Marshall Manufacturing's current accounting period: $$\begin{array} { l r } 
\text { Raw materials used } &\$ 34,000 \
\text { Direct labor wages } & 66,000 \
\text { Sales salaries and commissions } & 50,000 \
\text { Depreciation on production equipment } & 6,000 \
\text { Rent on marufacturing facilities } & 4,000 \
\text { Adrninistrative supplies ard utilities } & 10,000 \
\text { Sales revenue } & 210,000 \
\text { Units produced } & 10,000 \
\text { Units sold } & 10,000
\end{array}$$ Based on this information,what is the company's net income?

Accepted Answer

A)  $40,000 
B)  $70,000 
C)  $30,000 
D)  $42,000 
A)  $40,000 
B)  $70,000 
C)  $30,000 
D)  $42,000

Question 12

Select the incorrect statement regarding upstream and downstream costs.

Accepted Answer

A)  Companies normally incur significant downstream costs. 
B)  To be profitable, companies must recover the total cost of developing, producing, and delivering products. 
C)  Pricing decisions must consider both upstream and downstream costs in addition to manufacturing costs. 
D)  Upstream and downstream costs are reported as product costs on the income statement. 
A)  Companies normally incur significant downstream costs. 
B)  To be profitable, companies must recover the total cost of developing, producing, and delivering products. 
C)  Pricing decisions must consider both upstream and downstream costs in addition to manufacturing costs. 
D)  Upstream and downstream costs are reported as product costs on the income statement.

Question 13

Manufacturing costs that cannot be traced to specific units of product in a cost-effective manner include:

Accepted Answer

A)  depreciation on production equipment. 
B)  direct material. 
C)  indirect labor. 
D)  both depreciation on production equipment and indirect labor. 
A)  depreciation on production equipment. 
B)  direct material. 
C)  indirect labor. 
D)  both depreciation on production equipment and indirect labor.

Question 14

Which of the following statements concerning product costs versus general,selling,and administrative costs is false?

Accepted Answer

A)  Product costs incurred during the period will initially appear as inventory on the balance sheet. 
B)  General, selling, and administrative costs are always expensed when paid. 
C)  Product costs may be divided between the balance sheet and income statement. 
D)  General, selling, and administrative costs never appear as inventory on the balance sheet. 
A)  Product costs incurred during the period will initially appear as inventory on the balance sheet. 
B)  General, selling, and administrative costs are always expensed when paid. 
C)  Product costs may be divided between the balance sheet and income statement. 
D)  General, selling, and administrative costs never appear as inventory on the balance sheet.

Question 15

Managerial accounting focuses primarily on the performance of the company as a whole.

Accepted Answer

A) True 
 B)False

Question 16

Assuming that the inventory on hand at the end of the period is sold during the following period,misclassifying a period cost as a product cost during a period will usually correct itself in the following period.

Accepted Answer

A) True 
 B)False

Question 17

Who are the primary users of financial accounting information? Who are the primary users of managerial accounting information?

Accepted Answer

Financial accounting information is used

Question 18

Kirsten believes her company's overhead costs are driven (affected)by the number of direct labor hours because the production process is very labor intensive.During the period,the company produced 5,000 units of Product A requiring a total of 1,600 labor hours and 2,500 units of Product B requiring a total of 400 labor hours.What allocation rate should be used if the company incurs overhead costs of $20,000?

Accepted Answer

A)  $10 per labor hour 
B)  $2.67 per unit 
C)  $12.50 per labor hour for Product A and $50 per labor hour for Product B 
D)  None of these 
A)  $10 per labor hour 
B)  $2.67 per unit 
C)  $12.50 per labor hour for Product A and $50 per labor hour for Product B 
D)  None of these

Question 19

Select the incorrect statement regarding costs and expenses.

Accepted Answer

A)  Some costs are initially recorded as expenses while others are initially recorded as assets. 
B)  Expenses are incurred when assets are used to generate revenue. 
C)  Manufacturing-related costs are initially recorded as expenses. 
D)  Non-manufacturing costs should be expensed in the period in which they are incurred. 
A)  Some costs are initially recorded as expenses while others are initially recorded as assets. 
B)  Expenses are incurred when assets are used to generate revenue. 
C)  Manufacturing-related costs are initially recorded as expenses. 
D)  Non-manufacturing costs should be expensed in the period in which they are incurred.

Question 20

Certified Management Accountants (CMA)must complete a specified number of continuing professional education credits each reporting period.Which of the four standards of ethical conduct issued by the Institute of Management Accountants likely motivated this requirement?

Accepted Answer

A)  Confidentiality 
B)  Competence 
C)  Integrity 
D)  Objectivity 
A)  Confidentiality 
B)  Competence 
C)  Integrity 
D)  Objectivity

Which of the following best represents a characteristic of managerial accounting?

Managerial accounting information is limited or restricted by which of the following authorities or principles?

A company that uses a just-in-time inventory system:

Assuming that the number of units produced exceeds the number of units sold,misclassifying period costs as product costs will overstate net income relative to what net income would be without this error.

What is a value chain? And what relationship is there between the value chain and activity-based management?

Identify the false statement regarding how product costs in a manufacturing company differ from product costs in a service or merchandising company.

Because management accountants prepare and analyze financial information used by company decision-makers,they are considered to be at the forefront of corporate governance.

What are period costs? How does the accounting for period costs differ from the accounting for product costs?

Howard Lumber Company mistakenly classified a product cost as an expense that totaled $20,000.The company produced 2,000 units of product and sold 1,000 of them during the year.Management is paid a bonus equal to 2% of net income.In the year in which the mistake was made:

Select the incorrect statement regarding upstream and downstream costs.

Manufacturing costs that cannot be traced to specific units of product in a cost-effective manner include:

Which of the following statements concerning product costs versus general,selling,and administrative costs is false?

Managerial accounting focuses primarily on the performance of the company as a whole.

Assuming that the inventory on hand at the end of the period is sold during the following period,misclassifying a period cost as a product cost during a period will usually correct itself in the following period.

Who are the primary users of financial accounting information? Who are the primary users of managerial accounting information?

Select the incorrect statement regarding costs and expenses.

Certified Management Accountants (CMA)must complete a specified number of continuing professional education credits each reporting period.Which of the four standards of ethical conduct issued by the Institute of Management Accountants likely motivated this requirement?

Cost Behavior, operating Leverage, and Profitability Analysis

Analysis of Cost, volume, and Pricing to Increase Profitability

Cost Accumulation,tracing,and Allocation

Cost Management in an Automated Business Environment: ABC, ABM, and TQM

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Responsibility Accounting

Planning for Capital Investments

Product Costing in Service and Manufacturing Entities

Job-Order, process, and Hybrid Costing Systems

Financial Statement Analysis

Statement of Cash Flows

Filters

Exam 1: Management Accounting and Corporate Governance

Which of the following best represents a characteristic of managerial accounting?

Managerial accounting information is limited or restricted by which of the following authorities or principles?

A company that uses a just-in-time inventory system:

Assuming that the number of units produced exceeds the number of units sold,misclassifying period costs as product costs will overstate net income relative to what net income would be without this error.

What is a value chain? And what relationship is there between the value chain and activity-based management?

Identify the false statement regarding how product costs in a manufacturing company differ from product costs in a service or merchandising company.

Because management accountants prepare and analyze financial information used by company decision-makers,they are considered to be at the forefront of corporate governance.

What are period costs? How does the accounting for period costs differ from the accounting for product costs?

Howard Lumber Company mistakenly classified a product cost as an expense that totaled $20,000.The company produced 2,000 units of product and sold 1,000 of them during the year.Management is paid a bonus equal to 2% of net income.In the year in which the mistake was made:

Select the incorrect statement regarding upstream and downstream costs.

Manufacturing costs that cannot be traced to specific units of product in a cost-effective manner include:

Which of the following statements concerning product costs versus general,selling,and administrative costs is false?

Managerial accounting focuses primarily on the performance of the company as a whole.

Assuming that the inventory on hand at the end of the period is sold during the following period,misclassifying a period cost as a product cost during a period will usually correct itself in the following period.

Who are the primary users of financial accounting information? Who are the primary users of managerial accounting information?

Select the incorrect statement regarding costs and expenses.

Certified Management Accountants (CMA)must complete a specified number of continuing professional education credits each reporting period.Which of the four standards of ethical conduct issued by the Institute of Management Accountants likely motivated this requirement?

Cost Behavior, operating Leverage, and Profitability Analysis

Analysis of Cost, volume, and Pricing to Increase Profitability

Cost Accumulation,tracing,and Allocation

Cost Management in an Automated Business Environment: ABC, ABM, and TQM

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Responsibility Accounting

Planning for Capital Investments

Product Costing in Service and Manufacturing Entities

Job-Order, process, and Hybrid Costing Systems

Financial Statement Analysis

Statement of Cash Flows

Filters