Question 1

In terms of the United States EPA 5 tiers of environmental costs, which of the following would be classified as a Tier 1 environmental cost?

Accepted Answer

A)  Purchase cost of monitoring system of air pollution levels from the factory 
B)  Auditing environmental risks 
C)  Costs of occupational health and safety claims 
D)  Losses associated with loss of reputation due to public awareness of the firm's non-environmentally friendly activities. 
A)  Purchase cost of monitoring system of air pollution levels from the factory 
B)  Auditing environmental risks 
C)  Costs of occupational health and safety claims 
D)  Losses associated with loss of reputation due to public awareness of the firm's non-environmentally friendly activities.

Question 2

The results of a survey of Australian companies listed on the ASX and the National Greenhouse Energy Reporting Register revealed that a reason for omitting sustainability costs in capital investment decision making was a belief that:

Accepted Answer

A)  sustainability costs were a corporate-wide issue and not specific to a project. 
B)  sustainability costs were immaterial. 
C)  it was unknown if sustainability costs would be incurred for the project. 
D)  sustainability costs were part of the organisation's general overhead. 
A)  sustainability costs were a corporate-wide issue and not specific to a project. 
B)  sustainability costs were immaterial. 
C)  it was unknown if sustainability costs would be incurred for the project. 
D)  sustainability costs were part of the organisation's general overhead.

Question 3

Which of the following costs is included in the five tiers of environmental costs?

Accepted Answer

A)  External 
B)  Prime 
C)  Hidden 
D)  Conversion 
A)  External 
B)  Prime 
C)  Hidden 
D)  Conversion

Question 4

The International Integrated Reporting (IRR) Framework explains how organisations create value over time. Identify and detail the six different kinds of capital that are defined in the IRR framework.

Accepted Answer

<b>The International Integrated Reportin

Question 5

Intangible benefits associated with environmental sustainability activities are always quite easy to quantify.

Accepted Answer

A) True 
 B)False

Question 6

From the following list of costs, calculate the amount of societal environmental costs.

Accepted Answer

A)  $350 000 
B)  $355 000 
C)  $110 000 
D)  $550 000 
A)  $350 000 
B)  $355 000 
C)  $110 000 
D)  $550 000

Question 7

Which of the following represents the environmental management accounting response to product costing, as compared with the traditional view on recording environmental costs?

Accepted Answer

A)  Environmental costs are spread across all processes and production. 
B)  Environmental costs are not explicitly recorded in the accounts. 
C)  Environmental costs are included in the broader sustainability perspectives. 
D)  Environmental costs are upstream or downstream costs and therefore not included in product costs. 
A)  Environmental costs are spread across all processes and production. 
B)  Environmental costs are not explicitly recorded in the accounts. 
C)  Environmental costs are included in the broader sustainability perspectives. 
D)  Environmental costs are upstream or downstream costs and therefore not included in product costs.

Question 8

Which of the following costs is included in the five tiers of environmental costs?

Accepted Answer

A)  Conversion 
B)  Abnormal spoilage 
C)  Private 
D)  Relationship and image 
A)  Conversion 
B)  Abnormal spoilage 
C)  Private 
D)  Relationship and image

Question 9

From the following list of environmental costs, which is the most difficult to include in an environmental management accounting system?

Accepted Answer

A)  Costs on society generally, resulting from the firm's environmental breaches 
B)  Costs to pay for breaches of environmental rules 
C)  Costs to monitor the environmental impacts of the firm's actions 
D)  Environmental reporting costs 
A)  Costs on society generally, resulting from the firm's environmental breaches 
B)  Costs to pay for breaches of environmental rules 
C)  Costs to monitor the environmental impacts of the firm's actions 
D)  Environmental reporting costs

Question 10

In terms of the five tiers of environmental costs, which of the following costs would be classified as a contingent cost?

Accepted Answer

A)  Recycling of packaging materials from suppliers 
B)  Inspecting processes and products 
C)  Loss of future sales due to public awareness of the firm's non-environmentally friendly activities 
D)  Cost of cleaning up following a chemical spillage in a public waterway 
A)  Recycling of packaging materials from suppliers 
B)  Inspecting processes and products 
C)  Loss of future sales due to public awareness of the firm's non-environmentally friendly activities 
D)  Cost of cleaning up following a chemical spillage in a public waterway

Question 11

An organisation wanting to manage their environmental performance with a focus on measuring, quantifying and reducing greenhouse gases would be most likely to use:

Accepted Answer

A)  ISO 14005. 
B)  ISO 14031. 
C)  ISO 14040. 
D)  ISO 14064. 
A)  ISO 14005. 
B)  ISO 14031. 
C)  ISO 14040. 
D)  ISO 14064.

Question 12

From the following list of costs, calculate the amount of contingent environmental costs.

Accepted Answer

A)  $350 000 
B)  $355 000 
C)  $110 000 
D)  $1 100 000 
A)  $350 000 
B)  $355 000 
C)  $110 000 
D)  $1 100 000

Question 13

Which of the following statements is correct about environmental management systems (EMSs)?

Accepted Answer

A)  They are systems that an organisation puts in place to manage their environmental activities. 
B)  Firms not using EMSs are likely to adopt ISO 14004 for their audit. 
C)  Firms using EMSs may choose to report narrowly (only on costs that affect profits). 
D)  EMSs require environmental performance to be measured against policies, objectives and targets. 
A)  They are systems that an organisation puts in place to manage their environmental activities. 
B)  Firms not using EMSs are likely to adopt ISO 14004 for their audit. 
C)  Firms using EMSs may choose to report narrowly (only on costs that affect profits). 
D)  EMSs require environmental performance to be measured against policies, objectives and targets.

Question 14

Which of the following statements about traditional management accounting systems is true?

Accepted Answer

A)  Where environmental costs exist, it is common to find some reporting of environmental costs at the lower levels (tiers 1 and 2). 
B)  Where environmental costs exist, there is very little reporting of environmental costs at the lower levels (tiers 1 and 2). 
C)  Where environmental costs exist, there is very little reporting of environmental costs at the higher levels (tiers 3, 4 and 5). 
D)  Where environmental costs exist, it is common to find some reporting of environmental costs at the lower levels (tiers 1 and 2) AND where environmental costs exist, there is very little reporting of environmental costs at the higher levels (tiers 3, 4 and 5). 
A)  Where environmental costs exist, it is common to find some reporting of environmental costs at the lower levels (tiers 1 and 2). 
B)  Where environmental costs exist, there is very little reporting of environmental costs at the lower levels (tiers 1 and 2). 
C)  Where environmental costs exist, there is very little reporting of environmental costs at the higher levels (tiers 3, 4 and 5). 
D)  Where environmental costs exist, it is common to find some reporting of environmental costs at the lower levels (tiers 1 and 2) AND where environmental costs exist, there is very little reporting of environmental costs at the higher levels (tiers 3, 4 and 5).

Question 15

An example of a contingent environmental cost is:

Accepted Answer

A)  provisions for a potential oil-spill cleanup. 
B)  when a firm produces a product that is difficult to dispose of safely. 
C)  lost business because of adverse television publicity. 
D)  equipment to prevent environmental damage. 
A)  provisions for a potential oil-spill cleanup. 
B)  when a firm produces a product that is difficult to dispose of safely. 
C)  lost business because of adverse television publicity. 
D)  equipment to prevent environmental damage.

Question 16

All tiers defined by the United States Environmental Protection Agency are classified as private costs of the organisation.

Accepted Answer

A) True 
 B)False

Question 17

From the following list, calculate the total environmental appraisal costs.

Accepted Answer

A)  $75 000 
B)  $80 000 
C)  $60 000 
D)  $70 000 
A)  $75 000 
B)  $80 000 
C)  $60 000 
D)  $70 000

Question 18

Which of the following tiers of environmental costs relates to consumer perceptions?

Accepted Answer

A)  Tier 1 - Conventional costs 
B)  Tier 3 - Contingent costs 
C)  Tier 4 - Relationship and image costs 
D)  Tier 2 - Hidden costs 
A)  Tier 1 - Conventional costs 
B)  Tier 3 - Contingent costs 
C)  Tier 4 - Relationship and image costs 
D)  Tier 2 - Hidden costs

Question 19

Which of the following costs is included in the five tiers of environmental costs?

Accepted Answer

A)  Conventional 
B)  External 
C)  Internal 
D)  Conversion 
A)  Conventional 
B)  External 
C)  Internal 
D)  Conversion

Question 20

The international standard of environmental performance indicators include:

Accepted Answer

A)  operational performance, community satisfaction indicators and employee performance indicators. 
B)  employee performance indicators, management performance and environmental condition indicators. 
C)  operational performance, management performance and environmental condition indicators. 
D)  management performance, supplier rating indicators and community satisfaction indicators. 
A)  operational performance, community satisfaction indicators and employee performance indicators. 
B)  employee performance indicators, management performance and environmental condition indicators. 
C)  operational performance, management performance and environmental condition indicators. 
D)  management performance, supplier rating indicators and community satisfaction indicators.

Exam 17: Sustainability and Management Accounting

In terms of the United States EPA 5 tiers of environmental costs, which of the following would be classified as a Tier 1 environmental cost?

The results of a survey of Australian companies listed on the ASX and the National Greenhouse Energy Reporting Register revealed that a reason for omitting sustainability costs in capital investment decision making was a belief that:

Which of the following costs is included in the five tiers of environmental costs?

The International Integrated Reporting (IRR) Framework explains how organisations create value over time. Identify and detail the six different kinds of capital that are defined in the IRR framework.

Intangible benefits associated with environmental sustainability activities are always quite easy to quantify.

From the following list of costs, calculate the amount of societal environmental costs.

Which of the following represents the environmental management accounting response to product costing, as compared with the traditional view on recording environmental costs?

Which of the following costs is included in the five tiers of environmental costs?

From the following list of environmental costs, which is the most difficult to include in an environmental management accounting system?

In terms of the five tiers of environmental costs, which of the following costs would be classified as a contingent cost?

An organisation wanting to manage their environmental performance with a focus on measuring, quantifying and reducing greenhouse gases would be most likely to use:

From the following list of costs, calculate the amount of contingent environmental costs.

Which of the following statements is correct about environmental management systems (EMSs)?

Which of the following statements about traditional management accounting systems is true?

An example of a contingent environmental cost is:

All tiers defined by the United States Environmental Protection Agency are classified as private costs of the organisation.

From the following list, calculate the total environmental appraisal costs.

Which of the following tiers of environmental costs relates to consumer perceptions?

Which of the following costs is included in the five tiers of environmental costs?

The international standard of environmental performance indicators include:

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

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