(Test Bank) Management Accounting

Eldenburg,Brooks,Oliver,Vesty,Dormer,Murthy, 3

Business

Test Bank

3rd Edition

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Description

Test Bank for Management Accounting, The downloadable file consists of 547 pages, and the total size of the file is 3.27 MB. Purchase now only for highly discounted price.

Author(s): Eldenburg, Brooks, Oliver, Vesty, Dormer, Murthy

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Study Note Preview

Chapter 1: The role of accounting information in management decision making © John Wiley & Sons Australia, Ltd 2017 1.2 Chapter 1: The role of accounting information in management decision making True/False questions 1. A vision statement is a theoretical description of what an organisation should become . *a. True b. False LO 1 2. An organisational vision is a short term plan for maximizing financial results. a. True *b. False LO 1 3. Most organisations have one stakeholder. a. True *b. False LO 1 4. Organisational core competencies unrelated to the organizational vision. a. True *b. False LO 1 5. Organisational strategies are the same as operating plans. a. True *b. False LO 1 Testbank to accompany: Management accounting 3e by Eldenburg et al. © John Wiley & Sons Australia, Ltd 2017 1.3 6. The starting point for managerial decisions is monitoring actual operations. a. True *b. False LO 1 7. Desirable employee behaviour can be motivated by trying employee performance evaluation and pay to long term or short term results. *a. True b. False LO 1 8. Organisational information systems only collect accounting information . a. True *b. False LO 2 9. Cost accounting information is used for both management accounting and financial accounting activities. *a. True b. False LO 2 10. Management accounting is the process of gathering, summarizing and reporting financial and non -financial information used internally to make decisions. *a. True b. False LO 2 Chapter 1: The role of accounting information in management decision making © John Wiley & Sons Australia, Ltd 2017 1.4 11. Intellectual capital is a type of financial resource that is captured by the organisation’s information system. a. True *b. False LO 2 12. It is easy to differentiate between internal and external reports. a. True *b. False LO 2 13. The design of the management accounting system structure is influenced by both external and internal factors. *a. True b. False LO 2 14. Technological advances have allowed management accountants to develop previously infeasible cost and management accounting systems. *a. True b. False LO 2 15. GAAP stands for Generally Agreed Accounting Practices a. True *b. False LO 2 Testbank to accompany: Management accounting 3e by Eldenburg et al. © John Wiley & Sons Australia, Ltd 2017 1.5 16. Only large established organisations require a management accounting function. a. True *b. False LO 2 17. Relevant information helps decision makers evaluate and choose between alternative courses of action. *a. True b. False LO 2 18. Relevant information relates to events that happened in the past and is therefore quantifiable and accurate. a. True *b. False LO 2 19. Higher quality information is more certain, complete, relevant, timely and valuable. *a. True b. False LO 3 20. The use of sophisticated information systems means t hat uncertainty is eliminated. a. True *b. False LO 3 Chapter 1: The role of accounting information in management decision making © John Wiley & Sons Australia, Ltd 2017 1.6 21. Opportunity costs are the benefits forgone when we choose one alternative over the next best alternative. *a. True b. False LO 3 22. Cost-benefit analysis means that all decisions will provide a financial benefit to the organisation. a. True *b. False LO 3 23. Tuition fees are an opportunity cost of earning a university degree. a. True *b. False LO 3 24. High quality information will generally have fewer uncertainties if it is based on viable assumptions. *a. True b. False LO 3 25. Michael Porter was the first person to apply the generic value chain to the wine industry. a. True *b. False LO 4 Testbank to accompany: Management accounting 3e by Eldenburg et al. © John Wiley & Sons Australia, Ltd 2017 1.7 26. The value chain represents the key activities engaged in by an organisation or industry. *a. True b. False LO 4 27. The central feature of the value chain is its focus on activities and processes rather than functions or departments. *a. True b. False LO 4 28. A value chain framework ignores customers and suppliers as it requires the organisation to focus on its interna l processes. a. True *b. False LO 4 29. Value chain analysis can be used in conjunction with other management accounting developments such as Activity Based Costing and strategic cost management. *a. True b. False LO 4 30. Value chain analysis can be used to inform decision such as outsourci ng and strategic alliances. *a. True b. False LO 4 Chapter 1: The role of accounting information in management decision making © John Wiley & Sons Australia, Ltd 2017 1.8 32. Supply chain analysis is incompatible with value chain analysis as supply chain is only concerned with external suppliers. a. True *b. False LO 4 33. Research and de velopment would be considered a downstream activity in value chain analysis. a. True *b. False LO 4 34. Non-value added activities are unnecessary and wasteful activities that can never be eliminated. a. True *b. False LO 4 35. Customers are prepared to pay for value added activities. *a. True b. False LO 4 36. Cost object is anything that costs are measured for. *a. True b. False LO 4 Testbank to accompany: Management accounting 3e by Eldenburg et al. © John Wiley & Sons Australia, Ltd 2017 1.9 37. The manufacturing division of an oil refinery is an example of a cost object. *a. True b. False LO 4 38. Cost objects are the same as cost drivers. a. True *b. False LO 4 39. The inputs or activities that cause total costs to increase or decrease are cost drivers. *a. True b. False LO 4 40. One way of classifying cost drivers is as structural or equivalent. a. True *b. False LO 4 41. Structural costs drivers relate to the underlying economic structure of the organisational. *a. True b. False LO 4 42. Total quality management is an example of a structural cost driver. a. True *b. False LO 4 Chapter 1: The role of accounting information in management decision making © John Wiley & Sons Australia, Ltd 2017 1.10 43. Organisations that are highly decentralized typically have multiple business units and divisions overseen directly by the CEO. a. True *b. False LO 4 Testbank to accompany: Management accounting 3e by Eldenburg et al. © John Wiley & Sons Australia, Ltd 2017 1.11 Multiple -choice questions 44. Which of the following influences organisational strategies? a. Tax rates b. Financial statement results *c. Organisational vision d. Number of employees LO 1 45. Which of the following statements regarding organisational vision is false? *a. Organisational vision is the same as operating plans b. Organisational vision is one tool for expressing an organisation’s main purpose c. Organisational vision should be com municated to all employees d. Managers sometimes divide the organisational vision into one or more written statements LO 1 46. An organisational vision is sometimes broken down into : I Mission statement II Core values statement III Code of conduct IV Statement of Stakeholders a. I only b. I and II only *c. I, II, and III d. I, II and I V only LO 1 47. Organisational core competencies can include : a. A mission statement b. Favourable economic conditions in the external environment c. A code of conduct *d. An innovative product design LO 1 Chapter 1: The role of accounting information in management decision making © John Wiley & Sons Australia, Ltd 2017 1.12 48. How are organisational strategies related to core competencies? a. Competencies are the tactics managers use to take advantage of strategies b. Broad based organisational strat egies are the same as the core competencies. *c. Strategies help managers exploit competencies d. Strategies and competencies are actually two ways of expressing the same idea LO 1 49. Organisational strategies are: *a. A key influence on the structure of the organisational information system b. Secondary to operating plans c. Reconsidered quarterly d. Unrelated to long term goals LO 1 50. Which of the following is an element of an operating plan? a. Developing an organisational mission b. Preparing financial statements c. Defining core values *d. Outlining specific performance objectives LO 1 51. Types of decisions that managers make include all of the following except : a. Choosing which products to sell. b. Designing performance evaluation systems *c. Setting tax rates d. Hiring employees LO 1 Testbank to accompany: Management accounting 3e by Eldenburg et al. © John Wiley & Sons Australia, Ltd 2017 1.13 52. The term c ost accounting is : *a. The precursor to management accounting b. Commonly used to refer to financial accounting. c. Encompasses b oth financial and management reporting d. The same as budgeting LO 2 53. An example of cost accounting information that is used in financial accounting is: a. staff absentee rates b. quality assurance processes *c. valuation of ending inventory d. machine break down hours LO 2 54. Which of the following is a type of internal report produced by an organisation’s information system? a. News release *b. Analysis of potential acquisition c. Credit report d. Tax return LO 2 55. Which of the following is true: *a. Internal reports present information for use within an organisation b. Internal reports present information predominantly for use outside an organisation. c. Internal reports are always for one time use only d. Internal reports are also used for reporting to government LO 2 Chapter 1: The role of accounting information in management decision making © John Wiley & Sons Australia, Ltd 2017 1.14 56. Which of the following is the best example of an internal report that might come from an organisation’s information system? a. Environmental Protection Agency regulatory report *b. Cash flow plan c. Income tax returns d. Credit rating agency report LO 2 57. Financial statements are : a. Internal reports produced from an organisation’s information system b. Never used for internal decision making c. Only true when they are audited *d. Necessary to meet external reporting requirements LO 2 58. Information gathered outside the organisation includes : *a. Customer preferences b. Product design specifications c. Product mix plans d. Number of employees hired LO 2 59. The following are all stages found in a management accounting system except for: a. Processing b. Output *c. Outcome d. Input LO 2 Testbank to accompany: Management accounting 3e by Eldenburg et al. © John Wiley & Sons Australia, Ltd 2017 1.15 60. Influences on the nature of the management accounting system include all of the following except: a. organisational structure *b. geographical location c. organisational culture and vision d. types of decisions managers are confronted with LO 2 61. The routine measuring, monitoring and feedback processes to managers relating to operations is: *a. part of the management accounting system’s role b. not re quired in organisations with only one product c. required for long term strategic decision making d. an organisational core competency LO 2 62. Cost accounting practices has been influenced by all of the following except: a. Increased competition b. Technological innovation c. Changing organisational environments *d. Conformance to GAAP LO 2 63. Start up internet companies have no need for a management accounting function because: *a. Even start up internet companies’ need management accounting. b. They have innovative profit offerings. c. Their financial structure is uniform. d. They have no physical product. LO 2 Chapter 1: The role of accounting information in management decision making © John Wiley & Sons Australia, Ltd 2017 1.16 64. Relevant information: a. Does not vary with the decision taken. b. Is only useful if there are only two alternative courses of action c. Considers past costs. *d. Is always dependent on the decision and other factors. LO 2 65. Identify the irrelevant information in the following scenario: Eve is choosing between two part time jobs. Job A offers a high hourly wage but is located out of town and she will have to pay for public transport to get there. Job B is based locally and Eve can walk from home. The second job pays a lower hourly rate but there is more opportunity to pick up extra hours. The first job has a set number of hours. Last month Eve purchased a monthly gym pass for $80 for a gym located near Job B . a. Hourly pay rates. b. Number or working hours. *c. Cost of the gym pass. d. Public transport cost. LO 2 66. Higher quality decisions result from : a. Higher quality information b. Higher quality reports c. Higher quality decision making processes *d. All of the above LO 3 67. Which of the following are NOT associated with higher quality decisions: a. Timely information b. Unbiased decision making processes *c. Ignoring uncertainties d. Available and understandable reports LO 3