(Test Bank) Managerial Accounting Tools For Business Decision Making, Canadian Edition

Weygandt,Kimmel,Aly, 6

Business

Test Bank

6th Edition

• $15.00 $50.00

---

Description

Test Bank for Managerial Accounting Tools For Business Decision Making, Canadian Edition, The downloadable file consists of 771 pages, and the total size of the file is 5.26 MB. Purchase now only for highly discounted price.

Author(s): Weygandt, Kimmel, Aly

---

---

Study Note Preview

Copyright © 2021 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibite d CHAPTER 1 MANAGERIAL ACCOUNTING SUMMARY OF QUESTION TYPES BY LEARNING OBJECTIVE, BLOOM’S TAXONOMY, LEVEL OF DIFFICULTY, AACSB CODES, AND CPA CODES Item LO BT LOD AACSB CPA Item LO BT LOD AACSB CPA Item LO BT LOD AACSB CPA True -False Statements 1. 1 C E AN MA 3. 2 K E AN MA 5. 4 K E AN MA 2. 1 C E AN MA 4. 2 K E AN MA Multiple Choice Questions 6. 1 K E AN MA 36. 2 K E AN MA 66. 4 C E AN MA 7. 1 K E AN MA 37. 2 C E AN MA 67. 4 K E AN MA 8. 1 K E AN MA 38. 2 K E AN MA 68. 4 K E AN MA 9. 1 C E AN MA 39. 2 K E AN MA 69. 4 C E AN MA 10. 1 K E AN MA 40. 3 C E E MA 70. 4 C E AN MA 11. 1 C E AN MA 41. 3 C E E MA 71. 4 K E AN MA 12. 1 K E AN MA 42. 3 K E AN MA 72. 4 K E AN MA 13. 1 K E AN MA 43. 3 K E AN MA 73. 4 C E AN MA 14. 1 C E AN MA 44. 3 K E AN MA 74. 4 K E AN MA 15. 1 K E AN MA 45. 3 K E AN MA 75. 4 C E AN MA 16. 1 C E AN MA 46. 3 C E AN MA 76. 4 C E AN MA 17. 1 C E AN MA 47. 3 K E AN MA 77. 4 C E AN MA 18. 1 K E AN MA 48. 3 K E AN MA 78. 4 AN M AN MA 19. 1 K E AN MA 49. 3 C E AN MA 79. 4 K E AN MA 20. 1 K E AN MA 50. 3 C E AN MA 80. 4 K E AN MA 21. 1 C E AN MA 51. 3 K E AN MA 81. 4 C E AN MA 22. 1 K E AN MA 52. 3 K E AN MA 82. 4 K E AN MA 23. 1 K E AN MA 53. 4 C E AN MA 83. 4 K E AN MA 24. 1 K E AN MA 54. 4 K E AN MA 84. 4 K E AN MA 25. 1 K E AN MA 55. 4 K E AN MA 85. 4 K E AN MA 26. 2 C E AN MA 56. 4 K E AN MA 86. 4 K E AN MA 27. 2 K E AN MA 57. 4 K E AN MA 28. 2 K E AN MA 58. 4 K E AN MA 29. 2 K E AN MA 59. 4 C E AN MA 30. 2 K E AN MA 60. 4 C E AN MA 31. 2 K E AN MA 61. 4 C E AN MA 32. 2 K E AN MA 62. 4 K E AN MA 33. 2 C E AN MA 63. 4 K E AN MA 34. 2 K E AN MA 64. 4 K E AN MA 35. 2 C E AN MA 65. 4 C E AN MA Bloom’s: AN = Analysis C = Comprehension K = Knowledge LOD: E = Easy M = Medium H = Hard AACSB: AN = Analytic E = Ethics CPA: MA = Management Accounting 1 - 2 Test Bank for Managerial Accounting, Sixth Canadian Edition Copyright © 2021 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibite d. SUMMARY OF QUESTION TYPES BY LEARNING OBJECTIVE, BLOOM’S TAXONOMY, LEVEL OF DIFFICULTY, AACSB CODES, AND CPA CODES (CONT’D) Item LO BT LOD AACSB CPA Item LO BT LOD AACSB CPA Item LO BT LOD AACSB CPA Brief Exercises 87. 1 C E AN MA 90. 3 C E E MA 93. 4 C E AN MA 88. 2 C E AN MA 91. 3 C E E MA 94. 4 K E AN MA 89. 2 C E AN MA 92. 4 K E AN MA 95. 4 C E AN MA Exercises 96. 1 C E AN MA 100. 2 K E AN MA 104. 1,4 AN M AN MA 97. 1,2 AN M AN MA 101. 3 C E AN MA 105. 4 AN M AN MA 98. 2 C E AN MA 102. 3 C E AN MA 99. 2 AN M AN MA 103. 3 C E AN MA Completion Statements 106. 1 K E AN MA 108. 1 K E AN MA 110. 2 K E AN MA 107. 1 K E AN MA 109. 2 K E AN MA 111. 2 K E AN MA Matching 112. 4 K E AN MA Short -Answer Essay 113. 1 C E AN MA 115. 3 AN M AN MA 117. 4 C E AN MA 114. 2 C E AN MA 116. 3 C E AN MA Bloom’s: AN = Analysis C = Comprehension K = Knowledge LOD: E = Easy M = Medium H = Hard AACSB: AN = Analytic E = Ethics CPA: MA = Management Accounting Managerial Accounting 1 - 3 Copyright © 2021 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited. SUMMARY OF LEARNING OBJECTIVES BY QUESTION TYPE Item Type Item Type Item Type Item Type Item Type Item Type Item Type Learning Objective 1 1. TF 10. MC 16. MC 21. MC 96. Ex 113. SAE 2. TF 11. MC 17. MC 22. MC 97. Ex 6. MC 12. MC 18. MC 23. MC 104. Ex 7. MC 13. MC 19. MC 24. MC 106. C 8. MC 14. MC 20. MC 25. MC 107. C 9. MC 15. MC 21. MC 87. BE 108 C Learning Objective 2 3. TF 28. MC 32. MC 36. MC 88. BE 110. C 4. TF 29. MC 33. MC 37. MC 89. BE 111. C 26. MC 30. MC 34. MC 38. MC 97. Ex 114. SAE 27. MC 31. MC 35. MC 39. MC 109. C Learning Objective 3 40. MC 44. MC 48. MC 52. MC 102. Ex 41. MC 45. MC 49. MC 90. BE 103. Ex 42. MC 46. MC 50. MC 91. BE 115. SAE 43. MC 47. MC 51. MC 101. Ex 116. SAE Learning Objective 4 5. TF 59. MC 66. MC 73. MC 80. MC 92. BE 117. SAE 53. MC 60. MC 67. MC 74. MC 81. MC 93. BE 54. MC 61. MC 68. MC 75. MC 82. MC 94. BE 55. MC 62. MC 69. MC 76. MC 83. MC 95. BE 56. MC 63. MC 70. MC 77. MC 84. MC 104. Ex 57. MC 64. MC 71. MC 78. MC 85. MC 105. Ex 58. MC 65. MC 72. MC 79. MC 86. MC 112. Ma Note: TF = True-False C = Completion BE = Brief Exercise MC = Multiple Choice Ex = Exercise SAE = Short -Answer Essay Ma = Matching 1 - 4 Test Bank for Managerial Accounting, Sixth Canadian Edition Copyright © 2021 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibite d. CHAPTER LEARNING OBJECTIVES 1. Explain the distinguishing features of managerial accounting. Managerial accounting is needed in all types of businesses —service, merchandising, and manufacturing. It also applies to all f orms of business organization —proprietorships, partnerships, and corporations. Managerial accounting is needed in not -for-profit entities, as well as in profit -oriented enterprises. Managerial accounting provides tools that help management make decisions a nd evaluate the effectiveness of those decisions. The distinguishing features of managerial accounting are ∙ the primary users of reports —internal users, who are officers, department heads, managers, and supervisors in the company; ∙ the type and frequency of reports —internal reports that are issued as frequently as needed; ∙ the purpose of reports —to provide special -purpose information for a particular user for a specific decision; ∙ the content of reports —pertains to subunits of the business and may be ve ry detailed and may extend beyond the double -entry accounting system; the reporting standard is relevant to the decision being made; and ∙ the verification of reports —no independent audits. 2. Identify the three broad functions of management and the role of management accountants in an organizational structure. The three functions are planning, directing, and controlling. Planning requires management to look ahead and to establish objectives. Directing involves coordinating a company’s diverse activities and human resources to produce a smoothly running operation. Controlling is the process of keeping the activities on track. Management accountants serve as staff members in an organization and play an important role in providing the required inf ormation for decision making. 3. Explain the importance of business ethics. All employees in an organization are expected to act ethically in their business activities. In Canada, the professional accounting organization promotes high standards of ethics in the accounting profession. These standards of ethics can be used as guidelines in dealing with the public and the organizations’ members. In the United States, the Institute of Management Accountants’ Statement of Ethical Professional Practice provides the codes of conduct. Moreover, companies are now evaluating their performance with regard to their corporate social responsibility. 4. Identify changes and trends in managerial accounting. Managerial accounting has experienced many changes in recent year s. Among these are a shift toward meeting the needs of service companies and improving practices to better meet the needs of managers. Improved practices include a focus on managing the value chain through techniques such as just -in-time inventory and tech nological applications such as enterprise resource planning (ERP). In addition, techniques have been developed to improve decision - making, such as the theory of constraints and activity -based costing (ABC). Finally, many companies now use the balanced sco recard and data analytics in order to have a more comprehensive view of the company’s operations. Data analytics is important in business to understand problems facing an organization, and to use data to both predict and influence customer behaviour. Managerial Accounting 1 - 5 Copyright © 2021 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited. In Canada, the accounting profession has recently been reorganized by the founding of CPA Canada (Chartered Professional Accountants of Canada) in 2013, into which the three legacy accounting bodies —Chartered Accountants (CA), Certified Management Accountants (CMA), and Certified General Accountants (CGA) —were merged. 1 - 6 Test Bank for Managerial Accounting, Sixth Canadian Edition Copyright © 2021 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibite d. TRUE -FALSE STATEMENTS 1. Management accounting and financial accounting, while in the same field, are mutually exclusive disciplines. 2. Given the decision to employ straight -line amortization or a usage -based amortization method, the management accountant’s need to report the most relevant economic information to external users will determine which method is used. 3. Decision making is an integral part of the planni ng, directing, and motivating functions, but not of the controlling function. 4. Employees with staff positions serve other employees, while those with line positions work directly in line with the company’s revenue generating goals. 5. Activity -based costing is a method of allocating overhead costs to products. Managerial Accounting 1 - 7 Copyright © 2021 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited. ANSWERS TO TRUE -FALSE STATEMENTS Item Ans. Item Ans. Item Ans. Item Ans. Item Ans. 1. F 2. F 3. F 4. T 5. T 1 - 8 Test Bank for Managerial Accounting, Sixth Canadian Edition Copyright © 2021 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibite d. MULTIPLE CHOICE QUESTIONS 6. Managerial accounting a) information generally pertains to an entity as a whole and is very detailed. b) applies only to manufacturing companies. c) focuses primarily on reports for both internal and external users. d) provides tools that help management make decisions and evaluate the effect iveness of those decisions. 7. Reports scrutinized by managerial accountants a) do not include those focused on business subunits. b) do not include non -financial data relevant to business decision making. c) are highly aggregated. d) are special purpose for specific decisions. 8. Managerial accounting a) is concerned with costing products. b) is governed by generally accepted accounting principles. c) pertains to the entity as a whole and is highly aggregated. d) places emphasis on special -purpo se information. 9. Managerial accounting information is generally prepared for a) shareholders. b) managers. c) regulatory agencies. d) investors. 10. Managerial accounting information a) pertains to the entity as a whole and is highly aggregated. b) must be prepared according to generally accepted accounting principles. c) pertains to subunits of the entity and may be detailed. d) is prepared only once a year. 11. The major reporting standard for management accounting is a) the Standa rds of Ethical Conduct for Practitioners of Management Accounting and Financial Management. b) the Sarbanes -Oxley Act of 2002. c) relevance to decisions. d) generally accepted accounting principles. 12. Managerial accounting applies to which of the follow ing forms of business organizations? a) sole proprietorship b) partnership c) corporation Managerial Accounting 1 - 9 Copyright © 2021 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited. d) all forms of business organizations 13. Which of the following is false in terms of the reason companies replace a CEO with a management commit tee? a) To enhanc e decision -making b) To improve collaboration. c) To avoid disruption associated with replacing a CEO. d) To reduce management continuity. 14. Managerial accounting is also called a) inside reporting. b) cost accounting. c) management accounting. d) strategic management. 15. Which of the following is not an internal user? a) corporate officers b) staff employees c) stockholders d) department manager 16. Which of the following is not part of managerial accounting? a) determining whether planned goals are being met b) reporting financial information to the shareholders c) calculating product costs d) controlling costs 17. Which of the following uses managerial accounting? a) manufact uring and service entities, but not merchandising b) profit -oriented businesses only c) service, manufacturing, and merchandising entities d) only manufacturing entities 18. Which one of the following tasks would not be performed by a management accountant? a) being concerned with the impact of cost and volume on profits b) strategic cost management c) assisting in budget planning d) preparing reports primarily for externa l users 19. How often are internal managerial reports communicated? a) as frequently as needed b) annually c) during every audit by the company’s CPA d) monthly 1 - 10 Test Bank for Managerial Accounting, Sixth Canadian Edition Copyright © 2021 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibite d. 20. Which description identifies financial statements that are prepared for external users? a) external reports b) special purpose c) user -specific d) general -purpose 21. Which term describes managerial accounting reports? a) GAAP reports b) special purpose c) general -purpose d) regulatory reports 22. Which of the following statements about internal reports is true? a) Most internal reports are summarized rather than detailed. b) Internal reports focus on general -purpose needs of users. c) The content of internal reports extends beyond the double -entry accounting system. d) Internal reports are often very general. 23. Which one of the following describes internal reports? a) They are often audited by C PAs. b) They must be prepared according to GAAP. c) They are aggregated. d) They are detailed. 24. Which of the following r eports would management find useful in decision making? a) monthly reports on activities to the Board of Directors b) quarterly reporting to the Toronto Stock Exchange c) specific purpose statements on services delivered d) audited financial information in the annual report to shareholders 25. How often should management receive or prepare reports on its internal process activities? a) on a fixed time basis b) as often as is necessary c) never more than monthly d) weekly 26. How often shou ld management receive or prepare reports on its external business process activities? a) as they correspond to external financial reporting b) never more than monthly c) according to the company’s business cycle d) as often as is necessary 27. A company must inform readers of its annual report of Managerial Accounting 1 - 11 Copyright © 2021 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited. a) all changes in financial accounting policies. b) results of any overseas activities. c) all changes in internal accounting information. d) changes to management’s bonus system. 28. How could manageme nt information assist in motivating its employees? a) By keeping track of quality improvements. b) By highlighting the company’s percent of market share. c) By presenting the statistics on plant safety. d) All areas would benefit from providing internal ma nagement information. 29. In establishing a good internal reporting system, a company should a) ensure that these reports agree to generally accepted accounting principles. b) have the Board of Directors agree to the information provided. c) establish cl early understood standards of performance. d) All of the above are valid reasons. 30. What broad functions do the management of an organization perform? a) directing, manufacturing, and controlling b) planning, directing, and controlling c) planning, directing, and selling d) planning, manufacturing and controlling 31. Which one of the following involves coordinating a company’s activities to produce a smooth -running operation? a) auditing b) controlling c) planning d) directing 32. Which one of the following does the planning function involve? a) analyzing financial statements b) setting goals and objectives for an entity c) hiring the right people for a particular job d) coordinating the accounting information system 33. Which one of the following is true concerning the managerial function of controlling? a) It includes performance evaluation by management. b) It is concerned mainly with operating a manufacturing segment. c) It is performed only by the controller of a company. d) It in cludes hiring and training employees. 34. Which of the following represents two management functions? a) regulating and directing 1 - 12 Test Bank for Managerial Accounting, Sixth Canadian Edition Copyright © 2021 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibite d. b) controlling and directing c) controlling and auditing d) auditing and planning 35. Which management function is a manager performing when objectives are being established? a) regulating b) planning c) motivating d) directing 36. The organizational chart of a company shows a) the interrelationships of activities within a company. b) the delegation of authority within a company. c) the delegation of responsibility within a company. d) all of the above. 37. Which function is achieved when a manager is determining whether planned goals are being met? a) controlling b) motivating c) planning d) directing 38. What acti vities and responsibilities are not associated with management’s functions? a) planning b) accountability c) controlling d) directing 39. Directing includes a) providing a criteria framework for management when needed, to assist in terminating employees. b) running a department under quality control standards that are universally accepted. c) coordinating a company’s diverse activities and human resources to produce a smooth - running operation. d) developing a performance ranking system to give certain high performers substantial raises. 40. Which of the following is true? a) Generally Accepted Accounting Principles (GAAP) form the backbone of managerial accounting conventions, and local and/or regional standards and prof essional judgment allow for variations among practitioners. b) Each province in Canada has its own code of ethics and rules and guidelines of professional conduct. c) The Sarbanes -Oxley Act in the U.S. and similar legislation in Canada aims to guide ethica l Managerial Accounting 1 - 13 Copyright © 2021 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited. standards used in management accounting practices. d) Chartered Professional Accountants of Canada plays an important role in promoting high standards of ethics in the accounting profession, excluding managerial accounting. 41. Corporate social respo nsibility only considers: a) profitability. b) sustainable business practices with regards to the environment. c) the triple bottom line including performance with regard to people, plant and profit. d) sustainable business practices with regards to employees. 42. Which of the following is true? a) Managerial accountants are the employees who are principally responsible for ethical behaviour. b) Investment losses have been precipitated by lax ethical standards. c) Corporate fraud was found to have decreased between the years 1998 and 2003. d) Expense account abuse has been cited as one of the rarest forms of unethical employee behaviour. 43. Choose the incorrect answer. a) While generally not encouraged, lapses in ethical behaviour are irrele vant to a company’s operating income. b) Proper incentives need to be implemented to foster an ethical business environment. c) Manufacturing companies need to establish effective and realistic production goals for their processes. d) As a result of the Sa rbanes -Oxley Act, companies now pay more attention to the composition of the board of directors. 44. Which is the best definition of fraud? a) unknowingly misrepresenting the facts b) using business supplies for personal use c) the intentional misstateme nt of facts d) misappropriating funds for personal financial gain 45. Which of the following is true? a) Dissatisfied employees cite a decline in ethical behaviour is a result of a change in corporate culture. b) Unethical corporate behaviour occurs only in the United States because of its capitalistic environment. c) Unethical behaviour rarely causes a decline in investor confidence. d) Unethical actions are reasonable in an environment wherein unreasonable budgets and targets have been set. 46. The pr oduction manager at ABC Inc. is responsible for formulating the budget for his 1 - 14 Test Bank for Managerial Accounting, Sixth Canadian Edition Copyright © 2021 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibite d. department. He will be evaluated on his ability to control costs. After considerable thought, he arrives at his best estimate of costs, and then adds a further 10% to the projec tions. Chances are he has inflated the cost projections because a) that is the way it has always been done. b) conservative accounting practise requires that he not under report expenses. c) by overestimating expenses, it will make it easier for him to come in under budget and receive a favourable evaluation. d) none of the above. 47. In Canada, which of the following professional accounting organizations play an important role in promoting high standards of ethics in the accounting profession? a) Char tered Professional Accountants of Canada (CPA Canada) b) The Financial Planning Standards Council (FPSC) c) The Canadian Institute of Financial Planning (CIFP) d) all of the above 48. The Ontario Securities Commission introduced regulations governing the composition and duties of audit committees, as well as their members’ behaviour. The new rules a) are as robust as parallel rules required by the U.S. Sarbanes -Oxley Act. b) were adopted by all provincial and territorial securities regulators, except for British Columbia’s. c) were introduced in conjunction with the Canadian Securities Administrators. d) all of the above. 49. A company acting ethically must adapt its external reports to any changes required a) instantly. b) as it is appropriate for its b usiness cycle. c) as stipulated by the CPA Canada handbook and GAAP. d) if they are considered pertinent to its business activities. 50. A company acting ethically must adapt its internal reports to any changes required a) instantly. b) as it is appropriate for its business cycle. c) as stipulated by the CPA Canada handbook and GAAP. d) if they are considered pertinent to its business activities. 51. A recent survey of fraud by international accounting firm KPMG reported a) reported a 13% decrea se in instances of corporate fraud compared with five years earlier. b) that employee fraud (such things as expense account abuse, payroll fraud, and theft of assets) represents 60% of all instances of fraud. c) financial reporting fraud (the intentional m isstatement of financial reports) was the least costly to companies. d) business scandals with large investment losses and few employee layoffs. 52. The accounting professional bodies each have professional codes of ethical conduct. The code covers Managerial Accounting 1 - 15 Copyright © 2021 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited. a) com petence, ethical behaviour, objectivity, confidentiality. b) integrity, credibility, competence, and confidentiality. c) competence, objectivity, credibility, integrity. d) credibility, integrity, confidentiality, objectivity. 53. Data visualizations a) refer to the use of software to analyze data. b) do not help managers in acquiring an understanding of the relationships between variables. c) is the use of techniques to analyze data to make informed decisions. d) help managers in acquiring an unders tanding of business trends. 54. The value chain a) is affected by technology through business -to-business on the Internet. b) refers to all the activities associated with providing a product with the exception of research and development. c) has not been enhanced by computerization and automation. d) refers to all the activities associated with providing a service with the exception of sales and marketing. 55. Lean manufacturing a) is being used less often by manufacturing firms. b) is in contrast t o traditional mass -production operations. c) is apt to be used by firms that use large amounts of direct labour to produce their products. d) sets out to minimize rather than eliminate waste. 56. Which one of the following managerial accounting approache s attempts to allocate manufacturing overhead in a more meaningful fashion? a) theory of constraints b) just -in-time inventory c) activity -based costing d) total -quality management 57. Which one of the following is not a main component of the value chain sequence? a) ERP b) sales and marketing c) production d) customer relations 58. What is one primary benefit of an enterprise resource planning (ERP) system? a) It reduces inventory levels. b) It permits companies to be more streamlined in production. c) It replaces research and development in a company. d) It requires an increased emphasis on product quality. 59. One of the advantages of a just -in-time inventory system is that it reduces inventory