Question 1

Which of the following illustrate how environmental management accounting (EMA)assists managers to manage resources more effectively?

Accepted Answer

A)  EMA makes managers more accountable. 
B)  Managers forced to identify costs of disposing of waste will consider cost reduction alternatives such as reprocessing waste. 
C)  EMA allows the inclusion of both financial and non-financial environmental data in the firm's management information system. 
D)  EMA highlights both private and public environmental costs. 
A)  EMA makes managers more accountable. 
B)  Managers forced to identify costs of disposing of waste will consider cost reduction alternatives such as reprocessing waste. 
C)  EMA allows the inclusion of both financial and non-financial environmental data in the firm's management information system. 
D)  EMA highlights both private and public environmental costs.

Question 2

The major purpose of setting environmental performance indicators is to enable managers to:

Accepted Answer

A)  improve profitability by reducing environmental costs 
B)  improve environmental performance by setting environmental targets and monitoring their effectiveness in meeting those targets 
C)  establish both financial and non-financial measures of performance 
D)  improve environmental performance by monitoring management's efficiency in relationship to environmental targets 
A)  improve profitability by reducing environmental costs 
B)  improve environmental performance by setting environmental targets and monitoring their effectiveness in meeting those targets 
C)  establish both financial and non-financial measures of performance 
D)  improve environmental performance by monitoring management's efficiency in relationship to environmental targets

Question 3

From the following list,calculate the total of environmental internal failure costs.

Accepted Answer

A)  $45 000 
B)  $40 000 
C)  $145 000 
D)  $140 000 
A)  $45 000 
B)  $40 000 
C)  $145 000 
D)  $140 000

Question 4

An example of a hidden environmental cost is:

Accepted Answer

A)  monitoring costs 
B)  provisions for potential oil-spill cleanup 
C)  when a firm produces a product that is difficult to dispose of safely 
D)  equipment to prevent environmental damage 
A)  monitoring costs 
B)  provisions for potential oil-spill cleanup 
C)  when a firm produces a product that is difficult to dispose of safely 
D)  equipment to prevent environmental damage

Question 5

Why are Tier-2 costs called 'hidden' environmental costs?

Accepted Answer

A)  They are hidden in the accounts so that stakeholders are unaware of the potential environmental risks of the firm. 
B)  They tend to be included in other accounts such as overhead,and therefore are not easily identifiable. 
C)  They are uncertain because it is not possible to show them in a separate account. 
D)  Environmental costs cannot be estimated with any degree of certainty. 
A)  They are hidden in the accounts so that stakeholders are unaware of the potential environmental risks of the firm. 
B)  They tend to be included in other accounts such as overhead,and therefore are not easily identifiable. 
C)  They are uncertain because it is not possible to show them in a separate account. 
D)  Environmental costs cannot be estimated with any degree of certainty.

Question 6

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 7

From the following list of costs,calculate the amount of conventional 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 8

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

Accepted Answer

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

Question 9

Which of the following is an example of a 'remediation' environmental cost?

Accepted Answer

A)  Inspecting waste-handling procedures 
B)  Clean-up costs (both on- and off-site) 
C)  Staff training-waste reduction techniques 
D)  Improving production design to reduce toxic waste 
A)  Inspecting waste-handling procedures 
B)  Clean-up costs (both on- and off-site) 
C)  Staff training-waste reduction techniques 
D)  Improving production design to reduce toxic waste

Question 10

In terms of the 'quality' framework,which of the following would be classified as a cost of prevention activity?

Accepted Answer

A)  Cost of supplies used in testing and monitoring. 
B)  Depreciation-air-cleaning system attached to an exhaust fan in manufacturing equipment. 
C)  Cost of cleaning up plant following a leakage. 
D)  Cost of cleaning up polluted sites. 
A)  Cost of supplies used in testing and monitoring. 
B)  Depreciation-air-cleaning system attached to an exhaust fan in manufacturing equipment. 
C)  Cost of cleaning up plant following a leakage. 
D)  Cost of cleaning up polluted sites.

Question 11

Reports to stakeholders of a firm's performance on environmental and social issues (sustainability)are called:

Accepted Answer

A)  social audits 
B)  environmental reports 
C)  triple bottom line reports 
D)  All of the given answers 
A)  social audits 
B)  environmental reports 
C)  triple bottom line reports 
D)  All of the given answers

Question 12

Management performance indicators such as the number of cases of non-compliance with regulations,measure the efforts of management to improve the environmental performance of the organisation.

Accepted Answer

A) True 
 B)False

Question 13

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 14

Just as stakeholders have an interest in a company's performance,this same group of stakeholders also have an influence over an organisation's environmental and social practices.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements about the cost of climate change and carbon accounting is incorrect?

Accepted Answer

A)  A carbon tax effectively converts some of the Tier 5 costs (based on the EPA framework)into Tier 1 costs. 
B)  The cost of climate change is relevant to the retail industry. 
C)  Direct emissions resulting from the production process of a business falls under 'Scope 1' category of measurement. 
D)  Carbon emissions relating to the transportation of purchased materials falls under 'Scope 2' category of measurement. 
A)  A carbon tax effectively converts some of the Tier 5 costs (based on the EPA framework)into Tier 1 costs. 
B)  The cost of climate change is relevant to the retail industry. 
C)  Direct emissions resulting from the production process of a business falls under 'Scope 1' category of measurement. 
D)  Carbon emissions relating to the transportation of purchased materials falls under 'Scope 2' category of measurement.

Question 16

From the following list,calculate the total of 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 17

An example of a societal environmental cost is:

Accepted Answer

A)  monitoring costs 
B)  provisions for potential oil-spill cleanup 
C)  when a firm produces a product that is difficult to dispose of safely 
D)  buying equipment to prevent environmental damage 
A)  monitoring costs 
B)  provisions for potential oil-spill cleanup 
C)  when a firm produces a product that is difficult to dispose of safely 
D)  buying equipment to prevent environmental damage

Question 18

Private environmental costs are:

Accepted Answer

A)  environmental costs that directly affect the profit of the organisation 
B)  environmental costs for which the organisation can be held legally accountable 
C)  environmental costs that can be quantitatively measured 
D)  Both A and B 
A)  environmental costs that directly affect the profit of the organisation 
B)  environmental costs for which the organisation can be held legally accountable 
C)  environmental costs that can be quantitatively measured 
D)  Both A and B

Question 19

Climate change entails many potential costs to businesses.One example is the cost of collecting information about carbon emissions for the purpose of external accreditation.Based on the EPA framework,this is an example of:

Accepted Answer

A)  Tier 1 cost 
B)  Tier 2 cost 
C)  Tier 3 cost 
D)  Tier 4 cost 
A)  Tier 1 cost 
B)  Tier 2 cost 
C)  Tier 3 cost 
D)  Tier 4 cost

Question 20

Under ISO14031,which of the following is an environmental condition indicator?

Accepted Answer

A)  Percentage of raw materials that are from recycled sources 
B)  Air quality surrounding a company's main factories 
C)  The dollar amount spent on developing staff environmental awareness training programs 
D)  Percentage of suppliers checked for corruption charges 
A)  Percentage of raw materials that are from recycled sources 
B)  Air quality surrounding a company's main factories 
C)  The dollar amount spent on developing staff environmental awareness training programs 
D)  Percentage of suppliers checked for corruption charges

Exam 17: Sustainability and Management Accounting

Which of the following illustrate how environmental management accounting (EMA)assists managers to manage resources more effectively?

The major purpose of setting environmental performance indicators is to enable managers to:

From the following list,calculate the total of environmental internal failure costs.

An example of a hidden environmental cost is:

Why are Tier-2 costs called 'hidden' environmental costs?

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

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

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

Which of the following is an example of a 'remediation' environmental cost?

In terms of the 'quality' framework,which of the following would be classified as a cost of prevention activity?

Reports to stakeholders of a firm's performance on environmental and social issues (sustainability)are called:

Management performance indicators such as the number of cases of non-compliance with regulations,measure the efforts of management to improve the environmental performance of the organisation.

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

Just as stakeholders have an interest in a company's performance,this same group of stakeholders also have an influence over an organisation's environmental and social practices.

Which of the following statements about the cost of climate change and carbon accounting is incorrect?

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

An example of a societal environmental cost is:

Private environmental costs are:

Climate change entails many potential costs to businesses.One example is the cost of collecting information about carbon emissions for the purpose of external accreditation.Based on the EPA framework,this is an example of:

Under ISO14031,which of the following is an environmental condition indicator?

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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