Management Accounting Test Bank

BAC 3102 BASIC CONSIDERATIONS Mendoza MV
1. The primary objective of management accounting is to provide

a. stockholders and potential investors with useful information for decision making
b. banks and other creditors with information useful in making credit decisions
c. management with information useful for planning and control of operations
d. the Internal Revenue with information about taxable income
2. Management accounting is concerned with which kind of decision?

a. product costing and pricing c. financial control
b. continuous operation improvement d. all of these
3. Which of the following is not an output of the management accounting information

system?
a. budgets c. performance reports

b. customer cost information d. financial statements
4. Investigating production variances and adjusting the production process is an example

of
a. planning b. control c. internal auditing d. directing
5. Evaluating the performance of a segment of the company is an example of

a. planning b. control c. internal auditing d. directing
6. Setting the selling price of a company’s product is an example of

a. planning b. control c. decision making d. coordinating
7. Developing a company strategy for responding to anticipated new markets is an

example of
a. planning b. control c. decision making d. coordinating
8. Which of the following does not describe management accounting?

a. internally focused c. externally focused
b. emphasis on the future d. detailed information
9. The chief accounting officer of an organization is the

a. vice-president of finance b. internal auditor c. treasurer d. controller
10. The finance function within an organization is the responsibility of the

a. chief executive officer c. treasurer
b. internal auditor d. controller
11. The internal auditor performs a
a. line function c. production function
b. staff function d. finance function
12. A person in a staff position

a. has direct responsibility for achieving the basic objective of the organization
b. provides support for the line function
c. is not employed by the company
d. has low education and skill levels
13. Which of the following would be considered a line function?

a. production b. Maintenance c. public relations d. administrative services
14. Management accountants should attempt to resolve ethical issues by first

a. discussing the problem with a person in authority
b. reporting the problem to an external authority
c. clarifying the issues through a confidential discussion with an objective advisor
d. any of the above
15. How does the management accounting information system differ from the financial
accounting system?
a. the management accounting information system produces information for external users;
the financial accounting system produces information for internal users
b. the management accounting information system uses rules promulgated by the SEC; the
financial accounting system uses rules promulgated by the ASC
c. the management accounting information system uses objective information; the financial
accounting system uses subjective information
d. none of the above
16. Accounting information that users can depend on to represent the economic condition
or events that it purports to represent best defines
a. relevance b. timeliness c. feedback d. reliability
17. The personnel, procedures, devices and records used by an entity to develop
accounting information and to communicate to decision makers is known as:
a. Responsibility accounting system c. Internal control system
b. Practice of accounting d. Accounting system
18. The controller of a company or other organization is

a. a staff manager.
b. an operating manager.
c. an accountant, not a manager.
d. a natural manager.
19. Which item is NOT an IMA Standard for Ethical Conduct?
a. Integrity.
b. Competence.
c. Loyalty.
d. Objectivity.
20. Which activity is NOT normally performed by managerial accountants?
a. Assisting managers to interpret data in managerial accounting reports.

b. Designing systems to provide information for internal and external reports.
c. Gathering data from sources other than the accounting system.
d. Deciding the best level of inventory to be maintained.
21. In which of the following points does managerial accounting similar to financial accounting?
a. In the use of cost data.

b. In the manner costs are used in matching.
c. In the application of the convention of materiality.
d. In the application of the standard of neutrality.
22. A type of managerial accounting which refers to the tracing of costs to the responsibility
centers to pinpoint accountability and evaluate performance.
a. differential accounting
b. full cost accounting
c. responsibility accounting
d. profitability accounting
23. Which of the following characteristics does not relate to managerial accounting?
a. accounting reports may include non-monetary information
b. it is subject to restrictions imposed by GAAP
c. reports are often based on estimates and are seldom useful for anything other
than the purpose for which they are prepared
d. it provides data for internal users within the business organization
24. Which of the following is not a characteristic of management services?
a. a wider variety of assignments are encountered in MAS than in audit.

b. MAS engagements are recurring
c. MAS pinpoint actions to be taken, the benefits of which will be received in the
future
d. in MAS engagements, the nature of work involved requires a lesser need for
junior assistance.
25. Which of the following characteristics relate to financial accounting?
a. it is generally non-recurring
b. data may be both historical and estimates
c. it must be adhere to the generally accepted accounting principles.
d. it provides relevant information needed by management in making decisions
26. Which of the following will NOT impair independence of an MAS practitioner?
a. The CPA performs decision making services for the client

b. The CPA performs services wherein he is effect, acting as an employee of the
company
c. The CPA loses his objectivity and acts in a manner as if he is advocating for the
interest of the client company
d. The CPA does not extend his services beyond the representation of recommendations
or giving of advice
27. Which of the following is a line manager?
a. Dean of the School of Business at a University

b. Chief Legal Officer of a national chain of supermarkets
c. Treasurer of an automobile manufacturer
d. None of these
28. Controllers are ordinarily not concerned with
a. preparation of tax returns

b. establishment of internal control
c. investor relations
d. reliability of accounting and other records
29. A treasurer is usually not concerned with

a. Financial reporting
b. Short term financing
c. Cash custody and banking
d. Investments risk Management
30. The primary purpose of MAS is
a. to conduct special studies, prepare recommendations, develop plans and programs,

provide advice and assistance in their implementation;
b. to provide services or fulfill social needs;
c. to improve client’s use of its capabilities and resources to achieve the objectives of
the organization;
d. to earn the best rate of return on resources entrusted to its care with safety of
investment

Management Accounting Test Bank

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BAC 3102 BASIC CONSIDERATIONS Mendoza MV

1. The primary objective of management accounting is to provide

2. Management accounting is concerned with which kind of decision?

3. Which of the following is not an output of the management accounting information

a. budgets c. performance reports

4. Investigating production variances and adjusting the production process is an example

5. Evaluating the performance of a segment of the company is an example of

6. Setting the selling price of a company’s product is an example of

7. Developing a company strategy for responding to anticipated new markets is an

8. Which of the following does not describe management accounting?

9. The chief accounting officer of an organization is the

10. The finance function within an organization is the responsibility of the

12. A person in a staff position

13. Which of the following would be considered a line function?

14. Management accountants should attempt to resolve ethical issues by first

a. relevance b. timeliness c. feedback d. reliability

18. The controller of a company or other organization is

20. Which activity is NOT normally performed by managerial accountants?

a. Assisting managers to interpret data in managerial accounting reports.

a. In the use of cost data.

24. Which of the following is not a characteristic of management services?

a. a wider variety of assignments are encountered in MAS than in audit.

a. The CPA performs decision making services for the client

27. Which of the following is a line manager?

a. Dean of the School of Business at a University

28. Controllers are ordinarily not concerned with

a. preparation of tax returns

29. A treasurer is usually not concerned with

30. The primary purpose of MAS is

a. to conduct special studies, prepare recommendations, develop plans and programs,

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