(Test Bank) Managerial Accounting Canadian Edition

Braun, 4

Business

Test Bank

4th Edition

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Test Bank for Managerial Accounting Canadian Edition, The downloadable file consists of 1634 pages, and the total size of the file is 30.2 MB. Purchase now only for highly discounted price.

Author(s): Braun

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1 Copyright © 2021 Pearson Canada, Inc. Managerial Accounting, 4ce (Braun) Chapter 1 Introduction to Managerial Accounting 1.1 Identify managers' four primary responsibilities. 1) Controlling means overseeing the company's day-to-day operations. Answer: FALSE Diff: 1 Type: TF LO: 1-1 Bloom's Taxonomy: Remember 2) Managerial accounting gathers, summarizes, and reports the cost and revenue data relevant to decisions. Answer: TRUE Diff: 1 Type: TF LO: 1-1 Bloom's Taxonomy: Remember 3) Managerial accounting focuses on providing shareholders and creditors with the information they need to make investment and lending decisions. Answer: FALSE Diff: 1 Type: TF LO: 1-1 Bloom's Taxonomy: Remember 4) Financial accounting focuses on providing internal management with the information it needs to run an organization efficiently and effectively. Answer: FALSE Diff: 1 Type: TF LO: 1-1 Bloom's Taxonomy: Remember 5) Evaluating the results of business operations against a plan and then making adjustments to that plan is called budgeting. Answer: FALSE Diff: 1 Type: TF LO: 1-1 Bloom's Taxonomy: Remember 6) The four primary responsibilities of managers are planning, directing, controlling, and decision making. Answer: TRUE Diff: 1 Type: TF LO: 1-1 Bloom's Taxonomy: Remember 2 Copyright © 2021 Pearson Canada, Inc. 7) Managerial accounting develops reports that help internal parties effectively and efficiently run the company. Answer: TRUE Diff: 1 Type: TF LO: 1-1 Bloom's Taxonomy: Remember 8) Directing means setting goals and objectives for the company and determining how to achieve them. Answer: FALSE Diff: 1 Type: TF LO: 1-1 Bloom's Taxonomy: Remember 9) Budgets are the quantitative expression of management's plans. Answer: TRUE Diff: 1 Type: TF LO: 1-1 Bloom's Taxonomy: Remember 10) Making adjustments to keep the company moving forward is related to the management responsibility of controlling. Answer: TRUE Diff: 1 Type: TF LO: 1-1 Bloom's Taxonomy: Remember 11) Planning involves which of the following activities? A) Setting goals and objectives for the company B) Overseeing the company's day-to-day operations C) Evaluating the results of operations D) Getting feedback on results Answer: A Diff: 2 Type: MC LO: 1-1 Bloom's Taxonomy: Understand 12) When management compares the budget to actual results, which of the following is being fulfilled? A) Directing B) Controlling C) Decision-making D) Planning Answer: B Diff: 1 Type: MC LO: 1-1 Bloom's Taxonomy: Remember 3 Copyright © 2021 Pearson Canada, Inc. 13) Which of the following management responsibilities are being fulfilled when management uses feedback to take corrective action on the budgets? A) Directing and planning B) Planning and decision-making C) Controlling and decision-making D) Planning and controlling Answer: C Diff: 2 Type: MC LO: 1-1 Bloom's Taxonomy: Remember 14) Which one of the following manager responsibilities encompasses the other three? A) Decision-making B) Feedback C) Planning D) Controlling Answer: A Diff: 3 Type: MC LO: 1-1 Bloom's Taxonomy: Understand 15) Using product cost information to determine sales prices is an example of A) controlling, planning, and decision-making. B) directing, controlling, and planning. C) directing, planning, and decision-making. D) controlling, directing, and planning. Answer: C Diff: 3 Type: MC LO: 1-1 Bloom's Taxonomy: Understand 16) Using hourly sales reports to determine the level of staffing needed to service customers fulfills which of management's four primary responsibilities? A) Directing, planning, and decision-making B) Directing, controlling, and planning C) Controlling, planning, and decision-making D) Analyzing, directing, and planning Answer: A Diff: 3 Type: MC LO: 1-1 Bloom's Taxonomy: Understand 4 Copyright © 2021 Pearson Canada, Inc. 17) Budgets are the way that managers can express their A) plans. B) decision-making. C) control. D) hiring practices. Answer: A Diff: 1 Type: MC LO: 1-1 Bloom's Taxonomy: Remember 18) Comparing actual results to budgets is an example of the management function of A) controlling. B) decision-making. C) directing. D) planning. Answer: A Diff: 1 Type: MC LO: 1-1 Bloom's Taxonomy: Remember 19) Overseeing the day-to-day operations of a company is an example of the management function of A) controlling. B) decision-making. C) directing. D) planning. Answer: C Diff: 1 Type: MC LO: 1-1 Bloom's Taxonomy: Remember 20) Preparing budgets is an example of the management function of A) controlling. B) decision-making. C) directing. D) planning. Answer: D Diff: 1 Type: MC LO: 1-1 Bloom's Taxonomy: Remember 21) Evaluating results against the plan is an example of the management function of A) controlling. B) decision-making. C) directing. D) planning. Answer: A Diff: 1 Type: MC LO: 1-1 Bloom's Taxonomy: Remember 5 Copyright © 2021 Pearson Canada, Inc. 22) Management accounting A) helps managers make decisions. B) is useful for external and internal users. C) creates technical reports that require external audit for verification. D) is the same as cost accounting. Answer: A Diff: 2 Type: MC LO: 1-1 Bloom's Taxonomy: Understand 23) The budgetary control function may include evaluating the difference A) between current operating costs and last year's operating costs. B) between budgeted amounts and actual results. C) between the original budget and the final adjusted budget. D) between the historical cost and the current cost. Answer: B Diff: 2 Type: MC LO: 1-1 Bloom's Taxonomy: Understand 24) What are the four primary responsibilities of managers as described in Chapter 1? Give an example of each type of responsibility. Answer: The following are managers' four primary responsibilities: a. Planning: An example of planning is when the manager of a local McDonald's restaurant makes the schedule of employee work hours for the upcoming week. b. Directing: An example of directing is when the manager of the local McDonald's adjusts the menu to reflect local tastes and preferences. c. Controlling: An example of controlling is when the manager of the local McDonald's compares the actual number of hamburger patties used over the past week to the budgeted number of hamburger patties. d. Decision-making: The owners of the local McDonald's franchise analyze the potential of the current location and decide to open a second location five miles away in a popular shopping plaza. Note that student examples of each type of responsibility may vary. Diff: 2 Type: ES LO: 1-1 Bloom's Taxonomy: Understand 6 Copyright © 2021 Pearson Canada, Inc. Match the following: A) Decision making B) Controlling C) Planning D) Directing 25) Setting goals and objectives. Diff: 1 LO: 1-1 Type: MA Bloom's Taxonomy: Remember 26) The process in which management engages while it plans directs and controls operations. Diff: 1 Type: MA LO: 1-1 Bloom's Taxonomy: Remember 27) Evaluating results of business operations. Diff: 1 Type: MA LO: 1-1 Bloom's Taxonomy: Remember 28) Determining how to achieve company goals. Diff: 1 Type: MA LO: 1-1 Bloom's Taxonomy: Remember 29) Overseeing the company's day to day operations. Diff: 1 Type: MA LO: 1-1 Bloom's Taxonomy: Remember Answers: 25) C 26) A 27) B 28) C 29) D 7 Copyright © 2021 Pearson Canada, Inc. Match the following: A) Controlling B) Planning C) Directing D) Decision making 30) Setting a 20% increase in sales as goal for the next fiscal period. Diff: 1 Type: MA LO: 1-1 Bloom's Taxonomy: Understand 31) Streamline company procedures to reduce the time required per unit of product produced. Diff: 1 Type: MA LO: 1-1 Bloom's Taxonomy: Understand 32) Selecting the best corporate website design from a number of proposals. Diff: 1 Type: MA LO: 1-1 Bloom's Taxonomy: Understand 33) Monitor both voluntary and involuntary employee turnover. Diff: 1 Type: MA LO: 1-1 Bloom's Taxonomy: Understand 34) Making a determination about the appropriate level of advertising expenditures. Diff: 1 Type: MA LO: 1-1 Bloom's Taxonomy: Understand 35) Increasing marketing efforts. Diff: 1 Type: MA LO: 1-1 Bloom's Taxonomy: Understand 36) Implement an employee training program to improve moral. Diff: 1 Type: MA LO: 1-1 Bloom's Taxonomy: Understand 37) Setting a target level of employee turnover. Diff: 1 Type: MA LO: 1-1 Bloom's Taxonomy: Understand 38) Determine that R & D costs should be increased by 10% in the upcoming fiscal quarter. Diff: 2 Type: MA LO: 1-1 Bloom's Taxonomy: Understand 8 Copyright © 2021 Pearson Canada, Inc. 39) Set prices at a competitive level. Diff: 2 Type: MA LO: 1-1 Bloom's Taxonomy: Understand 40) Improve the design of the corporate website. Diff: 2 Type: MA LO: 1-1 Bloom's Taxonomy: Understand 41) Monitor web traffic through the use of an online counting device. Diff: 2 Type: MA LO: 1-1 Bloom's Taxonomy: Understand Answers: 30) B 31) C 32) D 33) A 34) D 35) C 36) C 37) B 38) B 39) C 40) C 41) A 1.2 Distinguish financial accounting from managerial accounting. 1) The design of a management accounting system should consider how reports affect employees' behaviour. Answer: TRUE Diff: 2 Type: TF LO: 1-2 Bloom's Taxonomy: Remember 2) International Financial Reporting Standards (IFRS) must be followed when managerial accounting reports are prepared. Answer: FALSE Diff: 1 Type: TF LO: 1-2 Bloom's Taxonomy: Remember 3) Accounting Standards for Private Enterprise (ASPE) must be followed when managerial accounting reports are prepared. Answer: FALSE Diff: 1 Type: TF LO: 1-2 Bloom's Taxonomy: Remember 4) Management accounting requires independent audits of the firm's books. Answer: FALSE Diff: 1 Type: TF LO: 1-2 Bloom's Taxonomy: Remember 9 Copyright © 2021 Pearson Canada, Inc. 5) The primary purpose of managerial accounting information is to help external users make investing and lending decisions. Answer: FALSE Diff: 1 Type: TF LO: 1-2 Bloom's Taxonomy: Remember 6) The primary users of managerial accounting information are internal users such as managers. Answer: TRUE Diff: 1 Type: TF LO: 1-2 Bloom's Taxonomy: Remember 7) The primary managerial accounting product is the company's audited financial statements. Answer: FALSE Diff: 1 Type: TF LO: 1-2 Bloom's Taxonomy: Remember 8) Managerial accounting information emphasizes relevance, more than reliability and objectivity. Answer: TRUE Diff: 1 Type: TF LO: 1-2 Bloom's Taxonomy: Remember 9) Managerial accounting information tends to report on segments of the business. Answer: TRUE Diff: 1 Type: TF LO: 1-2 Bloom's Taxonomy: Remember 10) Managerial accounting reports are always prepared on a quarterly and annual basis. Answer: FALSE Diff: 1 Type: TF LO: 1-2 Bloom's Taxonomy: Remember 11) Managerial information is always based on historical transactions with external parties. Answer: FALSE Diff: 1 Type: TF LO: 1-2 Bloom's Taxonomy: Remember 12) Employee behaviour is one of the factors that must be considered when designing the managerial accounting control system. Answer: TRUE Diff: 1 Type: TF LO: 1-2 Bloom's Taxonomy: Remember 10 Copyright © 2021 Pearson Canada, Inc. 13) Which of the following statements is TRUE about managerial accounting information? A) It is prepared annually and quarterly. B) It is audited. C) It emphasizes relevance. D) It must be prepared in conformity with generally accepted accounting principles (GAAP). Answer: C Diff: 2 Type: MC LO: 1-2 Bloom's Taxonomy: Remember 14) Management accounting focuses on A) external reporting. B) internal reporting. C) tax preparation. D) auditing. Answer: B Diff: 1 Type: MC LO: 1-2 Bloom's Taxonomy: Remember 15) The person MOST likely to use ONLY financial accounting information would be the A) bank loan officer. B) plant manager. C) vice president of plant operations. D) product manager. Answer: A Diff: 2 Type: MC LO: 1-2 Bloom's Taxonomy: Understand 16) Which of the following persons or groups would be LEAST likely to receive detailed managerial accounting reports? A) Plant managers B) Current shareholders C) Sales territory managers D) CEO Answer: B Diff: 2 Type: MC LO: 1-2 Bloom's Taxonomy: Understand 11 Copyright © 2021 Pearson Canada, Inc. 17) Which of the following types of accounting is designed to meet the needs of decision-makers inside a company? A) Audit accounting B) Financial accounting C) Managerial accounting D) Tax accounting Answer: C Diff: 1 Type: MC LO: 1-2 Bloom's Taxonomy: Remember 18) The primary goal of managerial accounting is to provide information to A) shareholders. B) creditors. C) internal decision-makers. D) both shareholders and creditors. Answer: C Diff: 1 Type: MC LO: 1-2 Bloom's Taxonomy: Remember 19) Which of following is TRUE? A) Management accounting focuses on historical transactions. B) Financial accounting uses the cash basis for recording transactions. C) Financial accounting focuses on future data. D) Management accounting focuses on relevant data. Answer: D Diff: 2 Type: MC LO: 1-2 Bloom's Taxonomy: Remember 20) Which of the following statements is FALSE? A) Financial accounting provides sufficient information for managers to effectively plan and control operations. B) Financial accounting reports help creditors make decisions. C) Financial accounting helps investors make decisions. D) Financial accounting provides external reports. Answer: A Diff: 2 Type: MC LO: 1-2 Bloom's Taxonomy: Remember 12 Copyright © 2021 Pearson Canada, Inc. 21) Which of the following is TRUE? A) Managerial accounting reports are audited by professional accountants. B) Managerial accounting reports provide detailed internal information. C) Managerial accounting reports aid potential investors. D) Managerial accounting reports must follow GAAP. Answer: B Diff: 2 Type: MC LO: 1-2 Bloom's Taxonomy: Remember 22) Which of the following are the internal decision-makers of a company? A) Vendors B) Customers C) Managers D) Shareholders Answer: C Diff: 1 Type: MC LO: 1-2 Bloom's Taxonomy: Remember 23) For a publicly traded company, which of the following reports must be audited by an outside agency? A) Annual financial statements B) Monthly financial statements C) Annual financial budgets D) Budgets Answer: A Diff: 2 Type: MC LO: 1-2 Bloom's Taxonomy: Remember 24) Which of the following groups are most likely to use a company's budget information? A) Managers B) Customers C) Creditors D) Suppliers Answer: A Diff: 1 Type: MC LO: 1-2 Bloom's Taxonomy: Remember 25) Owners of a company are its A) creditors. B) customers. C) managers. D) shareholders. Answer: D Diff: 1 Type: MC LO: 1-2 Bloom's Taxonomy: Remember 13 Copyright © 2021 Pearson Canada, Inc. 26) Information for external parties about past performance is provided by A) budget reports. B) financial accounting reports. C) managerial accounting reports. D) planning reports. Answer: B Diff: 1 Type: MC LO: 1-2 Bloom's Taxonomy: Remember 27) In what way do managers benefit from the use of a management information system? A) Data can be entered at numerous input terminals within the organization. B) The managers would not be completely responsible for the information that is entered into the database system. C) The managers could combine or adjust data to answer the questions from particular internal and external users. D) Managers can store old documents in hard copy. Answer: C Diff: 2 Type: MC LO: 1-2 Bloom's Taxonomy: Understand 28) Managerial accounting (select all that apply) A) focuses on the future and includes activities such as preparing next year's operating budget. B) must comply with IFRS/ASPE. C) reports include detailed information on the various operating segments of the business such as product lines or departments. D) must be audited by an independant auditor. Answer: A, C Diff: 1 Type: MC LO: 1-2 Bloom's Taxonomy: Remember 29) Financial accounting A) focuses on the future and includes activities such as preparing next year's operating budget. B) must comply with IFRS/ASPE. C) reports include detailed information on the various operating segments of the business such as product lines or departments. D) is prepared for the use of department heads and other employees. Answer: B Diff: 1 Type: MC LO: 1-2 Bloom's Taxonomy: Remember 14 Copyright © 2021 Pearson Canada, Inc. 30) Discuss at least four differences between financial accounting and managerial accounting. Answer: Item Managerial Accounting Financial Accounting Primary Users Internal Users External Users (shareholders, creditors and regulators) Purpose of Information To help managers plan, direct, control and make decisions To help external users make investing and lending decisions Primary Product Any internal report deemed worthwhile by management Financial Statements What must be included/how it should be formatted Determined by management Standards must be chosen, IFRS or ASPE Underlying basis Focus on the future Historical transactions What information characteristic is emphasized Relevance Reliable and objective Business unit Segments of the business The company as a whole Frequency of reports Determined by management Annually and quarterly Verification No independent audits required Publicly traded companies must be audited by independent CPA Required by outside agency No Yes - securities commissions Concerns over the impact on employees' behaviour Management should consider behavioural implications Primary concern is adequacy of disclosure Diff: 3 Type: ES LO: 1-2 Bloom's Taxonomy: Understand 31) Is financial accounting or managerial accounting more useful to a plant (factory) manager? Explain your answer. Answer: Managerial accounting is likely to be much more useful to a plant manager than financial accounting. Financial accounting typically gives financial information for the company as a whole; the plant manager would find very little information in the financial accounting reports which relate directly to the plant environment and the performance of the plant itself. Managerial accounting, on the other hand, could provide the plant manager with information relating to just the plant. Examples of some types of information provided by managerial accounting are: a. comparison of budgeted costs versus actual costs. b. tracking of safety incidents. c. quality costs. d. product line profitability. e. profitability by shift. (Student examples may vary.) Diff: 3 Type: ES LO: 1-2 Bloom's Taxonomy: Evaluate 15 Copyright © 2021 Pearson Canada, Inc. 32) Describe management accounting and financial accounting. Answer: Management accounting provides information to internal decision makers of the business such as top executives, managers, sales representatives, and production supervisors. Its purpose is to help managers predict and evaluate future results. Reports are generated often and usually broken down into smaller reporting divisions such as department or product line. There are no rules to be complied with since these reports are for internal use only. Management accounting embraces more extensively such topics as the development and implementation of strategies and policies, budgeting, special studies and forecasts, influence on employee behaviour, and nonfinancial as well as financial information. Financial accounting, by contrast, provides information to external decision makers such as investors and creditors. Its purpose is to present a fair picture of the financial condition of the company. Reports are generated quarterly or annually and report on the company as a whole. The financial statements must comply with IFRS/ASPE. A CPA audits, or verifies, that the IFRS/ASPE are being followed. Diff: 2 Type: ES LO: 1-2 Bloom's Taxonomy: Understand 1.3 Describe organizational structure and the roles and skills required of management accountants within the organization. 1) The CFO of a company is responsible for the day-to-day running of the company. Answer: FALSE Diff: 1 Type: TF LO: 1-3 Bloom's Taxonomy: Remember 2) The treasurer and the controller report directly to the CFO. Answer: TRUE Diff: 1 Type: TF LO: 1-3 Bloom's Taxonomy: Remember 3) The internal audit department reports directly to the subcommittee of the board of directors called the audit committee. Answer: TRUE Diff: 1 Type: TF LO: 1-3 Bloom's Taxonomy: Remember 4) The internal audit department reports directly to the CFO. Answer: FALSE Diff: 1 Type: TF LO: 1-3 Bloom's Taxonomy: Remember 5) In most companies, managerial accountants no longer perform routine mechanical accounting tasks. Answer: TRUE Diff: 1 Type: TF LO: 1-3 Bloom's Taxonomy: Remember