Test Bank Accounting for Decision Making and Control, 10th Edition By Jerold Zimmerman Exam Guide!!!

, Chapter 01 Test Bank – Static Key xx xx xx xx xx xx




Multiple Choice Questions xx xx




1. The firm's information system:
xx xx xx




A. is always a single integrated system
xx xx xx xx xx


B. includes only financial information
xx xx xx


C. may include other information such as customer satisfaction surveys, in addition to financial information
xx xx xx xx xx xx xx xx xx xx xx xx xx


D. is less important as a firm grows in size
xx xx xx xx xx xx xx xx


E. none of the above xx xx xx




The firm's information system includes many kinds of financial and non-financial information.
xx xx xx xx xx xx xx xx xx xx xx




AACSB: xxKnowledge
Application x x Accessibility: xxKeyboard
xx

xxNavigation x x Accessibility: xxScreen

xxReader xxCompatible

AICPA: xxBB
xxIndustry x x AICPA: xxFN

xxLeveraging xxTechnology

Blooms:
xxRemember

x x Difficulty: xx1

xxEasy

Topic: xxManagerial xxAccounting: xxDecision xxMaking xxand xxControl

2. Identify all the correct statements:
xx xx xx xx




A. Managers naturally seek to maximize shareholders' wealth
xx xx xx xx xx xx


B. Managers act in their own interests, and so there is no way to align their interests with those of the owners
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx


C. To motivate managers in non-profit firms, no employee incentives are needed
xx xx xx xx xx xx xx xx xx xx


D. To align the interests of managers and owners, owners must design systems to monitor and reward management
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx


behavior that increases the firm's profits
xx xx xx xx xx xx


E. none of the above xx xx xx




To minimize conflicts between the economic interests of managers and owners, the owners need both systems to
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx

monitor the manager's performance and systems of rewards or incentives.
xx xx xx xx xx xx xx xx xx xx



AACSB: xxKnowledge
Application x x Accessibility: xxKeyboard
xx

xxNavigation x x Accessibility: xxScreen

xxReader xxCompatible

AICPA: xxBB
xxIndustry x x AICPA: xxFN

xxDecision xxMaking x x AICPA:

xxFN xxRisk xxAnalysis

x x Blooms: xxRemember

x x Difficulty: xx1 xxEasy

Topic: xxManagement xxAccountant's xxRole xxin xxthe
xxOrganization x x Topic: xxManagerial xxAccounting: xxDecision

xxMaking xxand xxControl




3-1
Copyright xx© xx2019 xxMcGraw-Hill xxEducation. xxAll xxrights xxreserved. xxNo xxreproduction xxor xxdistribution xxwithout xxthe xxprior xxwritten
xxconsent xxof xxMcGraw-Hill xxEducation.

,3. An internal accounting system should:
xx xx xx xx




A. provide information to enable costs to be minimized
xx xx xx xx xx xx xx


B. provide financial accounting data for external reporting purposes
xx xx xx xx xx xx xx


C. provide management accounting information for decision-making
xx xx xx xx xx


D. provide data for tax purposes
xx xx xx xx


E. all of the above
xx xx xx




A well designed internal accounting system should provide data for external purposes, such as financial reporting and
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx

tax, as well as internal purposes such as cost control, assessing performance and determining rewards. It is
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx

economically inefficient to maintain multiple accounting systems.
xx xx xx xx xx xx xx



AACSB: xxKnowledge
Application x x Accessibility: xxKeyboard
xx

xxNavigation x x Accessibility: xxScreen

xxReader xxCompatible

AICPA: xxBB
xxIndustry x x AICPA: xxFN

xxDecision xxMaking

Blooms:
xxRemember

x x Difficulty: xx1

xxEasy

Topic: xxDesign xxand xxUse xxof xxCost xxSystems

4. Economic Darwinism: xx




A. explains why firms persist in inefficient behavior
xx xx xx xx xx xx


B. explains why some inefficient accounting practices persist
xx xx xx xx xx xx


C. explains why marmots eat bears
xx xx xx xx


D. explains why bears eat marmots
xx xx xx xx


E. none of the above
xx xx xx




Inefficient accounting systems may continue to exist either because they have proved better than other systems or because
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx

better systems have not been yet discovered.
xx xx xx xx xx xx xx



AACSB: xxKnowledge
Application x x Accessibility: xxKeyboard
xx

xxNavigation x x Accessibility: xxScreen

xxReader xxCompatible

AICPA: xxBB
xxMarketing x x AICPA:

xxFN xxRisk xxAnalysis

x x Blooms: xxRemember

x x Difficulty: xx1 xxEasy

Topic: xxMarmots xxand xxGrizzly xxBears




3-2
Copyright xx© xx2019 xxMcGraw-Hill xxEducation. xxAll xxrights xxreserved. xxNo xxreproduction xxor xxdistribution xxwithout xxthe xxprior xxwritten
xxconsent xxof xxMcGraw-Hill xxEducation.

, 5. Management accountants mainly are: xx xx xx




A. Internal consultants xx


B. Scorekeepers
C. Focused on calculating product costs
xx xx xx xx


D. Corporate cops xx


E. Internal consultants and corporate cops.
xx xx xx xx




While score-keeping and product costing are tasks performed by today's management accountants, these usually are
xx xx xx xx xx xx xx xx xx xx xx xx xx xx

considered minor. The major roles they perform are internal consultant in terms of providing information to aid
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx

other's decision making and corporate cop in terms of providing control systems to prevent fraud and performance
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx

measures for incentive systems.
xx xx xx xx



AACSB: xxKnowledge
Application x x Accessibility: xxKeyboard
xx

xxNavigation x x Accessibility: xxScreen

xxReader xxCompatible

AICPA: xxBB
xxIndustry x x AICPA: xxFN

xxDecision xxMaking

x x Blooms: xxUnderstand

x x Difficulty: xx2 xxMedium

Topic: xxManagement xxAccountant's xxRole xxin xxthe xxOrganization

6. Internal control systems:xx xx




A. are the responsibility of the external auditor
xx xx xx xx xx xx


B. include anti-fraud measures
xx xx


C. are designed to allow financial misrepresentation
xx xx xx xx xx


D. require that one person perform all aspects of a task
xx xx xx xx xx xx xx xx xx


E. all of the above
xx xx xx




The internal control system is designed to safeguard assets, protect the integrity of the accounting information
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx

system, and to prevent fraud. A key practice is the separation of duties to ensure that critical tasks are
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx

performed by two or more people.
xx xx xx xx xx xx



AACSB: xxKnowledge
Application x x Accessibility: xxKeyboard
xx

xxNavigation x x Accessibility: xxScreen

xxReader xxCompatible

AICPA: xxBB
xxIndustry x x AICPA: xxFN

xxDecision xxMaking

x x Blooms: xxUnderstand

x x Difficulty: xx2 xxMedium

Topic: xxManagement xxAccountant's xxRole xxin xxthe xxOrganization




3-3
Copyright xx© xx2019 xxMcGraw-Hill xxEducation. xxAll xxrights xxreserved. xxNo xxreproduction xxor xxdistribution xxwithout xxthe xxprior xxwritten
xxconsent xxof xxMcGraw-Hill xxEducation.