(Test Bank) Cost Management Measuring, Monitoring, And Motivating Performance Canadian Edition

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Test Bank for Cost Management Measuring, Monitoring, And Motivating Performance Canadian Edition, The downloadable file consists of 1226 pages, and the total size of the file is 5.86 MB. Purchase now only for highly discounted price.

Author(s): Eldenburg, Wolcott, Hsuan, Gail

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Copyright © 201 6 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited . CHAPTER 1 The Role of Accounting Information in Ethical Management Decision Making CHAPTER LEARNING OBJECTIVES 1. Describe the process of strategic management and decision making. 2. Identify the types of control systems that managers use. 3. Explain the role of accounting information in strategic management. 4. Explain the information systems and information that is relevant for decision making. 5. Describe how business risk affects management decision making. 6. Appreciate how biases affect management decision making. 7. Determine how managers make higher -quality decisions. 8. Explain the importance of ethical decision making. 1 - 2 Test Bank for Cost Management, Third Canadian Edition Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited . TRUE -FALSE STATEMENTS 1. A vision statement is one way to clarify an organization’s basic purpose and ideology. Answer: True Difficulty: Easy Learning Objective: Describe the process of strategic management and decision making. CPA: Management Accounting Bloomcode: Knowledge 2. Most managers follow a standard template and format when writing a vision statement. Answer: False Difficulty: Easy Learning Objective: Describe the process of strategic management and decision making. CPA: Management Accounting Bloomcode: Knowledge 3. A vision statement helps employees understand how to deal with various stakeholder groups. Answer: True Difficulty: Easy Learning Objective: Describe the process of strategic management and decision making. CPA: Management Accounting Bloomcode: Knowledge 4. Organizational core competencies are the tactics that managers use to take advantage of the vision. Answer: False Difficulty: Easy Learning Objective: Describe the process of strategic management and decision making. CPA: Management Accounting Bloomcode: Knowledge 5. Accounting information is the only thing managers need to make financial decisions. Answer: False Difficulty: Easy Learning Objective: Explain the role of accounting information in strategic management. CPA: Management Accounting Bloomcode: Knowledge The Role of Accounting Information in Ethical Management Decision Making 1 - 3 Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited. 6. Accounting information is used to monitor operations by comparing actual results to planned results. Answer: True Difficulty: Easy Learning Objective: Explain the role of accounting information in strategic management. CPA: Management Accounting Bloomcode: Knowledge 7. Accounting information cannot be used to motivate employee behavior. Answer: False Difficulty: Easy Learning Objective: Explain the role of accounting information in strategic management. CPA: Management Accounting Bloomcode: Knowledge 8. Cost accounting information is used for both external reporting and internal decision making. Answer: True Difficulty: Easy Learning Objective: Explain the role of accounting information in strategic management. CPA: Management Accounting Bloomcode: Knowledge 9. Cost accounting information, such as the valuation of ending inventory, is shown on external financial statements. Answer: True Difficulty: Easy Learning Objective: Explain the role of accounting information in strategic management. CPA: Management Acco unting Bloomcode: Knowledge 10. Because accounting information is highly objective and quantitative in nature, it is not subject to uncertainties or management bias. Answer: False Difficulty: Easy Learning Objective: Identify the types of control systems that managers use. Learning Objective: Appreciate how biases affect management decision making. CPA: Management Accounting Bloomcode: Knowledge 1 - 4 Test Bank for Cost Management, Third Canadian Edition Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited . 11. Uncertainty and bias reduce decision quality. Answer: True Difficulty: Easy Learning Objective: Identify the types of control systems that managers use. Learning Objective: Appreciate how biases affect management decision making. CPA: Management Accounting Bloomcode: Knowledge 12. Uncertainties cause decision makers to ignore weaknesses in a preferred course of action. Answer: False Difficulty: Easy Learning Objective: Identify the types of control systems that managers use. CPA: Management Accounting Bloomcode: Knowledge 13. Uncertainties and biases do not affect external financial reports, because they are based on objective standards. Answer: False Difficulty: Easy Learning Objective: Identify the types of control systems that managers use. Learning Objective: Appreciate how biases affect management decision making. CPA: Management Accounting Bloomcode: Knowledge 14. Because we can never completely remove biases and uncertain ty from decision -making, higher -quality decision processes are often imprecise. Answer: True Difficulty: Easy Learning Objective: Identify the types of control systems that managers use. Learning Objective: Appreciate how biases affect management decision making. CPA: Management Accounting Bloomcode: Knowledge 15. Higher -quali ty decisions result from higher -quality information, reports, and decision -making processes. Answer: True Difficulty: Easy The Role of Accounting Information in Ethical Management Decision Making 1 - 5 Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited. Learning Objective: Determine how managers make higher -quality decisions. CPA: Management Accounting Bloomcode: Knowledge 16. Few management decisions can be made with absolute certainty. Answer: True Difficulty: Easy Learning Objective: Determine how managers make higher -quality decisions. CPA: Management Accounting Bloomcode: Knowledge 17. Open -ended problems are not often seen in business. Answer: False Difficulty: Easy Learning Objective: Determine how managers make higher -quality decisions. CPA: Management Accounting Bloomcode: Knowledge 18. When learning cost accounting, it is sufficient to learn the mechanics of applying cost accounting methods. Answer: False Difficulty: Easy Learning Objective: Determine how managers make higher -quality decisions. CPA: Management Accounting Bloomcode: Knowledge 19. Incremental cash flows are relevant for decision -making. Answer: True Difficulty: Easy Learning Objective: Explain the information systems and information that is relevant for decision making. CPA: Management Accounting Bloomco de: Knowledge 20. Incremental cash flows are the same as unavoidable cash flows. Answer: False Difficulty: Easy 1 - 6 Test Bank for Cost Management, Third Canadian Edition Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited . Learning Objective: Explain the information systems and information that is relevant for decision making. CPA: Management Accounting Bloomcode: Knowledge 21. Relevant information for decisions can focus both on learning from the past and anticipating the future. Answer: True Difficulty: Easy Learning Objective: Explain the information systems and information that is relevant for decision making. CPA: Management Accounting Bloomcode: Knowledge 22. The cost of your old automobile is relevant in the decision to purchase a new automobile. Answer: False Difficulty: Easy Learning Objective: Explain the information systems and information that is relevant for decision making. CPA: Management Accounting Bloomcode: Knowledge 23. Ethical behavio ur is an individual obligation, but not an organizational obligation. Answer: False Difficulty: Easy Learning Objective: Explain the importance of ethical decision making. CPA: Management Accounting /Professional and Ethical Behaviour Bloomcode: Knowledge 24. Employees will always make ethical decisions if they act in the best interests of shareholders. Answer: False Difficulty: Easy Learning Objective: Explain the importance of ethical decision making. CPA: Management Accounting /Professional and Ethical Behaviour Bloomcode: Knowledge 25. Ethical behavio ur is required of every employee within an organization. Answer: True The Role of Accounting Information in Ethical Management Decision Making 1 - 7 Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited. Difficulty: Easy Learning Objective: Explain the importance of ethical decision making. CPA: Management Accounting /Professional and Ethical Behaviour Bloomcode: Knowledge 1 - 8 Test Bank for Cost Management, Third Canadian Edition Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited . MULTIPLE CHOICE QUESTIONS 26. Which of the following influences organizational strategies? a) Organizational vision b) Financial statement results c) Computer software d) Number of employees Answer: a Difficulty: Easy Learning Objective: Describe the process of strategic management and decision making. CPA: Strategy and Governance Bloomcode: Knowledge 27. Which of the following statements regarding organizational vision is false? a) Organizational vision means the same as core competencies b) Organizational vision is one tool for expressing an organization’s main purpose c) Organizational vision should be communicated to all employees d) Managers sometimes divide the organizational vision into one or more written statements Answer: a Difficulty: Easy Learning Objective: Descr ibe the process of strategic management and decision making. CPA: Strategy and Governance Bloomcode: Knowledge 28. An organizational vision is sometimes broken down into: I. Mission statement II. Core values statement III. Code of conduct a) I only b) I and II only c) I, II, and III d) II and III only Answer: c Difficulty: Easy Learning Objective: Describe the process of strategic management and decision making. CPA: Strategy and Governance Bloomcode: Knowledge 29. Organizational core competencies can include: The Role of Accounting Information in Ethical Management Decision Making 1 - 9 Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited. a) A mission statement b) Patents, copyrights, and special legal protections c) A code of conduct d) An operating plan Answer: b Difficulty: Easy Learning Objective: Describe the process of strategic management and decision making. CPA: Strategy and Governance Bloomcode: Knowledge 30. How are organizational strategies related to core competencies? a) Competencies are the tactics managers use to take advantage of strategies b) Competencies and strategies are an integral part of organizational vision c) Strategies help managers exploit competencies d) Strategies and competencies are actually two ways of expressing the same idea Answer: c Difficulty: Easy Learning Objective: Describe the process of strategic management and decision making. CPA: Strategy and Governance Bloomcode: Comprehension 31. Organizational strategies: a) Are reconsidered on a daily basis b) Should never be reconsidered once they are determined c) Are reconsidered quarterly d) Are reconsidered periodically in response to changes in the organization or environment Answer: d Difficulty: Easy Learning Objective: Describe the process of strategic management and decision making. CPA: Strategy and Governance Bloomcode: Knowledge 32. Which of the following is an element of an operating plan? a) Developing an organizational mission b) Preparing financial statements c) Defining core values d) Budgeting employee costs Answer: d Difficulty: Easy 1 - 10 Test Bank for Cost Management, Third Canadian Edition Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited . Learning Objective: Describe the process of strategic management and decision making. CPA: Management Accounting Bloomcode: Knowledge 33. Jane is considering opening her own business, now that she has retired from her regular job. Her business idea is a reminder and shopping service, in which clients submit lists of birthdays, anniversaries and other important dates. Jane sends her clients remin ders for those dates, and shops for special gifts at the client’s request. She plans to do all of the work herself rather than hiring and managing additional employees. “Providing excellent, reliable customer service at reasonable prices” best describes wh ich of the following for Jane ’s business? a) Core competency b) Vision c) Operating plan d) Actual operations Answer: b Difficulty: Easy Learning Objective: Describe the process of strategic management and decision making. CPA: Strategy and Governance Bloomcode: Comprehension 34. Jane is considering opening her own business, now that she has retired from her regular job. Her business idea is a reminder and shopping service, in which clients submit lists of birthdays, anniversar ies and other important dates. Jane sends her clients reminders for those dates, and shops for special gifts at the client’s request. She plans to do all of the work herself rather than hiring and managing additional employees. Jane ’s core competencies are most likely to include: a) An annual budget b) The ability to deduct business expenses on her tax return c) The first year’s actual results d) Her knowledge of potential gifts and the local shops Answer: d Difficulty: Easy Learning Objective: Describe the process of strategic management and decision making. CPA: Management Accounting Bloomcode: Application 35. Jane is considering opening her own business, now that she has retired from her regular job. Her business idea is a reminder and shopping service, in which clients submit lists of birthdays, anniversa ries and other important dates. Jane sends her clients remin ders for those dates, and shops for special gifts at the client’s request. She plans to do all of the work herself rather than hiring and managing additional employees. Jane ’s organizational strategy is most likely to include: a) Her knowledge of local st ores b) Operating her business from her home to keep costs low c) Leasing equipment The Role of Accounting Information in Ethical Management Decision Making 1 - 11 Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited. d) Mailing flyers to potential clients Answer: b or c Difficulty: Easy Learning Objective: Describe the process of strategic management and decision making. CPA: Strategy and Governance /Management Accounting Bloomcode: Application 36. Jane is considering opening her own business, now that she has retired from her regular job. Her business idea is a reminder and shopping service, in which clients submit lists of b irthdays, anniversa ries and other important dates. Jane sends her clients reminders for those dates, and shops for special gifts at the client’s request. She plans to do all of the work herself rather than hiring and managing additional employees. Jane ’s actual operations would probably include: a) Establishing a sales strategy b) Purchasing advertisements in local media c) Identifying her core competencies d) Developing a budget Answer: b Difficulty: Easy Learning Objective: Describe the process of strategic management and decision making. CPA: Strategy and Governance /Management Accounting Bloomcode: Application 37. Jane is considering opening her own business, now that she has retired from her regular job. Her business idea is a reminder and shopping service, in which clients submit lists of birthdays, anniversaries and oth er important dates. Jane sends her clients reminders for those dates, and shops for special gifts at the client’s request. She plans to do all of the work herself rather tha n hiring and managing additional employees. Which of the following statements is true for Jane ’s business regarding measuring and monitoring performance? a) Jane does not need a system to measure and monitor performance because her company is a sole propr ietorship b) Jane needs audited financial statements every year c) Jane can track cash flows on a monthly basis d) Jane only needs to reconcile her accounts every few years Answer: c Difficulty: Easy Learning Objective: Describe the process of strategic management and decision making. CPA: Management Accounting Bloomcode: Application 38. Accounting information: I. Can be used to guide organizational vision 1 - 12 Test Bank for Cost Management, Third Canadian Edition Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited . II. Is a core competency for most companies III. Can be used to motivate performance a) I only b) I and II only c) I, II, and III d) I and III only Answer: d Difficulty: Easy Learning Objective: Describe the process of strategic management and decision making. CPA: Management Accounting Bloomcode: Knowledge 39. Cost accounting information i s used for: a) Financial reporting only b) Management reporting only c) Both financial and management reporting d) Neither financial nor management reporting Answer: c Difficulty: Easy Learning Objective: Explain the role of accounting information in strategic management. CPA: Management Accounting Bloomcode: Knowledge 40. Which of the following is a type of external report produced by an organization? a) Cash flow plan b) Analysis of potential acquisition c) News release d) Bonus computations Answer: c Difficulty: Easy Learning Objective: Explain the information systems and information that is relevant for decision making. CPA: Management Accounting Bloomcode: Comprehension 41. Which of the following is least likely to be an external report? a) Credit report b) Supplier’s inventory report c) Tax return d) Analysis of supplier quality The Role of Accounting Information in Ethical Management Decision Making 1 - 13 Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited. Answer: d Difficulty: Easy Learning Objective: Explain the information systems and information that is relevant for decision making. CPA: Bloomcode: Comprehension 42. Which of the following is the best example of an internal report that might come from an organization’s information system? a) Environmental Protection Agency regulator y report b) Operating budget c) Income tax returns d) Medicare cost report Answer: b Difficulty: Easy Learning Objective: Explain the information systems and information that is relevant for decision making. CPA: Management Accounting Bloomcode: Comprehension 43. Financial statements are: a) External reports produced from an organization’s information system b) Never used for internal decision making c) Only true when they are audited d) Unimportant reports for most organizations Answer: a Difficulty: Easy Learning Objective: Explain the information systems and information that is relevant for decision making. CPA: Management Accounting Bloomcode: Knowledge 44. Information gathered outside the organization includes: a) Customer preferences b) Product design specifications c) Taxable income d) Number of employees hired Answer: a Difficulty: Easy 1 - 14 Test Bank for Cost Management, Third Canadian Edition Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited . Learning Objective: Explain the information systems and information that is relevant for decision making. CPA: Management Accounting Bloomcode: Comprehension 45. Which of the following is not true about information in an organization’s databases? a) Information may be collected formally or informally b) Access to database information is oft en restricted to specific individuals c) Intellectual capital is usually captured in database information d) The benefits of generating information should exceed the costs Answer: c Difficulty: Easy Learning Objective: Explain the information systems and information that is relevant for decision making. CPA: Management Accounting Bloomcode: Comprehension 46. Uncertainties: a) Are issues about which managers have doubts b) Do not impact accounting information, which is highly objective and reliable c) Are preconceived notions developed without careful thought d) Are rarely a problem in business decision making Answer: a Difficulty: Easy Learning Objective: Identify the types of control systems that managers use. CPA: Management Accounting Bloomcode: Knowledge 47. Biases: a) Are issues about which managers have doubts b) Do not impact accounting information, which is highly objective and reliable c) Are preconceived notions developed without careful thought d) Are ra rely a problem in business decision making Answer: c Difficulty: Easy Learning Objective: Appreciate how biases affect management decision making. CPA: Management Accounting Bloomcode: Knowledge The Role of Accounting Information in Ethical Management Decision Making 1 - 15 Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited. 48. WestJet has several non -stop flights daily between Toronto and Vancouver. Which of the following is an uncertainty associated with this operation? a) The exact number of flights flown the previous day b) The average number of passengers on each flight the previo us week c) The average number of empty seats for flights next month d) The number of ticket agents scheduled for each shift for the next day Answer: c Difficulty: Easy Learning Objective: Identify the types of control systems that managers use. CPA: Management Accounting Bloomcode: Comprehension 49. Ramada Hotels operates hotels throughout Canada. Which of the following is the best example of a potential bias associated with its operations? a) Managers assume that most travelers are interested in c onducting business, rather than vacationing b) Managers learn that guests rarely stay longer than a week c) Managers find that last year’s profits were below the industry average d) Managers are concerned because employee turnover increased during the last year Answer: a Difficulty: Easy Learning Objective: Appreciate how biases affect management decision making. CPA: Management Accounting Bloomcode: Comprehension 50. Uncertainties and biases can affect: I. Organizational vision II. Core competencie s III. Operating plans a) I only b) II only c) I and III only d) I, II, and III Answer: c Difficulty: Easy Learning Objective: Appreciate how biases affect management decision making. CPA: Management Accounting Bloomcode: Knowledge 51. Which of the following statement about biases is true?