Module 1 Practice Questions
Module 1 Practice Questions
1. Which of the following the functions is most directly related to management by objective?
A. Reporting
B. Decision Making
C. Control
D. Planning
2. The setting of objectives and the identification of methods to achieve those objectives is called
A. planning
B. controlling
C. decision making
D. performance evaluation
3. In the planning and control process, what is the proper sequence of events?
A. Set goals, set objectives, develop plans, implement plans, evaluate performance
B. Establish a master budget, set standard costs, develop variance analysis
C. Develop engineered costs, develop pricing targets, calculate contribution margins
D. Identify variable costs, identify fixed costs, project the sales mix, determine breakeven
6. Which of the following is included in the day-to-day work of the management team?
A. decision making
B. planning
C. controlling
D. all of the given choices
7. Which of the following statements is true when comparing managerial accounting to financial
accounting?
A. Managerial accounting place more emphasis on precision than financial accounting.
B. Bothe are highly dependent on timely information.
C. Both rely on the same accounting information system.
D. Managerial accounting is concerned with external decision makers.
8. Which of the following is true of managerial accounting rather than financial accounting?
A. The outputs of this accounting system are the basic financial statements.
B. The methods of this accounting system are established by an overseeing board.
C. The accounting methods are standardized to allow comparisons among companies.
D. The accounting system would be unique to each company.
10. Which of the following statements is (are) true regarding financial and managerial accounting?
I. Both are mandatory.
II. Both rely on the same underlying financial data.
III. Both emphasize the segments of an organization, rather than just looking at the
organization as a whole.
IV. Both are geared to the future, rather than to the past.
A. I, II, III, and IV
B. Only II, III and IV
C. Only II and III
D. Only II
11. For internal users, managers are more concerned with receiving information that is:
A. completely objective and verifiable.
B. completely accurate and precise.
C. relevant, flexible and immediately available.
D. relevant, completely accurate and precise.
12. The major reporting standard for presenting managerial accounting information is
A. relevance
B. generally accepted accounting principles
C. the cost principle
D. the current tax law
13. Which of the following activities is not usually performed by a management accountant?
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.
14. How does managerial decision making compare with external performance evaluation?
Managerial Decision Making External Performance Evaluation
A. Detailed Detailed
B. Detailed More aggregated
C. More aggregated Detailed
D. More aggregated More aggregated
22. Which statement about the extent of detail in a management accounting report is true?
A. It may depend on the frequency of the report.
B. It depends on the type of manager receiving the report.
C. It depends on the level of the manager receiving the report.
D. All of the given choices.
24. In order to be useful to managers, management accounting reports should possess all of the
following characteristics except:
A. Provide objective measures of past operations and subjective estimates about future
decisions.
B. Be prepared in accordance with generally accepted accounting principles.
C. Be provided at any time management needs information.
D. Be prepared to report information for any unit of the business to support decision making.
25. Which ethical standard of conduct requires that a managerial accountant be responsible to
prepare complete and clear reports and recommendations are based on appropriate analyses of
relevant and reliable information?
A. competence
B. confidentiality
C. integrity
D. objectivity
26. Which ethical standard of conduct requires the managerial accountant have to communicate
information fairly and objectively?
A. competence
B. confidentiality
C. integrity
D. objectivity
27. Under which ethical standard of conduct does the managerial accountant have the responsibility
to refuse any gift, favour, or hospitality that would influence or appear to influence his or her
decision?
A. competence
B. confidentiality
C. integrity
D. objectivity
28. For managerial decision purposes, the volume of information should evaluated on the basis of
A. cost-benefit relationship.
B. A cost, but not benefit.
C. A benefit, but not cost.
D. Neither costs nor benefits, but some other criteria.
32. In determining whether planned goals are being met, a manager is performing the function of
A. planning
B. controlling
C. motivating
D. follow-up
33. Managerial accounting creates value by:
A. by forcing managers to analyze historical figures and interpret the results
B. by eliminating all pricing and costing errors
C. by focusing managers attention on the relationship between financial and non-financial
factors
D. all of the given choices
34. Which of the following best describes what performance evaluation should be designed to do?
A. Modify goal and objectives each month
B. Establish sales goals and targets
C. Compare actual results to plan
D. Establish blame
39. Obtaining feedback is generally identified most directly with the management function of
A. Planning
B. Directing and motivating
C. Controlling
D. Decision making