, TESTBANK FOR Cornerstones of Managerial
Accounting , 4th Edition Maryanne M. Mowen
Notes
1- The file is chapter after chapter.
2- We have shown you few pages sample.
3- The file contains all Appendix and Excel sheet
if it exists.
4- We have all what you need, we make update
at every time. There are many new editions
waiting you.
5- If you think you purchased the wrong file You
can contact us at every time, we can replace it
with true one.
Our email:
,Name: Class: Date:
Chapter 1 – Introduction to Managerial Accounting
1. Managerial accounting is designed primarily for external users.
a. True
b. False
ANSWER: False
2. The process of choosing among competing alternatives is called decision making.
a. True
b. False
ANSWER: True
3. The managerial activity of monitoring a plan’s implementation and taking corrective action as needed
is referred to as controlling.
a. True
b. False
ANSWER: True
4. Managerial accounting information is important for both for-profit and not-for-profit organizations.
a. True
b. False
ANSWER: True
5. Managerial accounting information is used only by manufacturing organizations.
a. True
b. False
ANSWER: False
6. In Canada, both financial and managerial accounting are governed by the Accounting Standards Board
(AcSB) of CPA Canada.
a. True
b. False
ANSWER: False
7. Financial accounting has its emphasis primarily on the future.
a. True
b. False
ANSWER: False
8. Managerial accounting is internally focused.
a. True
b. False
ANSWER: True
9. The Triple Bottom Line refers to management putting triple the focus on profits.
Copyright Cengage Learning. Powered by Cognero. Page 1
,Name: Class: Date:
Chapter 1 – Introduction to Managerial Accounting
a. True
b. False
ANSWER: False
10. Activity-based costing is a detailed approach to determining the cost of goods and services.
a. True
b. False
ANSWER: True
11. Customer value is the difference between what a customer receives and what they give up when
buying a product or service.
a. True
b. False
ANSWER: True
12. The value chain refers to the set of activities required to design, develop, produce, market, and deliver
products and services to customers.
a. True
b. False
ANSWER: True
13. Because service organizations do not make or sell tangible products, they have no need for managerial
accounting.
a. True
b. False
ANSWER: False
14. Value chain analysis is a useful way of examining a firm’s competitive advantage.
a. True
b. False
ANSWER: True
15. Positions that have direct responsibility for the basic objectives of an organization are normally
referred to as staff positions.
a. True
b. False
ANSWER: False
16. A cost accountant would normally occupy a line position within an organization.
a. True
b. False
ANSWER: False
Copyright Cengage Learning. Powered by Cognero. Page 2
,Name: Class: Date:
Chapter 1 – Introduction to Managerial Accounting
17. In larger organizations, the controller is typically also the chief executive officer (CEO) of a company.
a. True
b. False
ANSWER: False
18. Virtually all managerial accounting practices were developed to assist managers in maximizing
profits.
a. True
b. False
ANSWER: True
19. The belief that each member of a group bears some responsibility for the well-being of other members
is a common principle underlying all ethical systems.
a. True
b. False
ANSWER: True
20. Professional accountants in Canada now operate as Chartered Professional Accountants (CPAs).
a. True
b. False
ANSWER: True
21. The CPA designation in Canada refers to Certified Professional Accountant.
a. True
b. False
ANSWER: False
22. Which of the following is a characteristic of managerial accounting?
a. It has no mandatory rules.
b. It must adhere to mandatory rules.
c. Its main users are outside of the organization.
d. It provides only objective financial information.
ANSWER: a
23. Which statement best describes managerial accounting reports?
a. The reports are prepared to meet the needs of decision makers within the firm.
b. The reports are prepared for external shareholders, lenders, and tax authorities.
c. The reports are prepared according to International Financial Reporting Standards (IFRS).
d. The reports are prepared according to guidelines prepared by the Ontario Securities
Commission.
ANSWER: a
24. What is an objective of managerial accounting?
a. to comply with international reporting standards
Copyright Cengage Learning. Powered by Cognero. Page 3
,Name: Class: Date:
Chapter 1 – Introduction to Managerial Accounting
b. to provide tax information for planning, controlling, evaluating, and continuous improvement
c. to prepare reports for investors, creditors, government agencies, and other outside users
d. to provide information for the costing of services, products, and other objects of interest to
management
ANSWER: d
25. What is a primary objective of managerial accounting?
a. to provide the Canada Revenue Agency with information about taxable income
b. to provide management with information useful for planning and control of operations
c. to provide banks and other creditors with information useful in making credit decisions
d. to provide existing shareholders and potential investors with useful information for decision
making
ANSWER: b
26. What is an example of the management activity referred to as planning?
a. upgrading outdated equipment
b. outsourcing the organization’s payroll processing
c. developing a strategy to dispose of hazardous waste
d. deciding to eliminate an unprofitable segment of an organization
ANSWER: c
27. What is developing a company strategy for responding to anticipated new markets an example of?
a. planning b. delegating
c. controlling d. decision making
ANSWER: a
28. What is investigating production variances and adjusting the production process an example of?
a. planning b. delegating
c. controlling d. decision making
ANSWER: c
29. Which statement best describes financial accounting?
a. It is internally focused.
b. It has an emphasis on the future.
c. It has no regulatory or mandatory rules.
d. It is concerned with information about the organization as a whole.
ANSWER: d
30. Which term refers to establishing objectives within an organization to include its social and
environmental impact?
a. triple impact b. triple accounting
c. triple bottom line d. triple cost analysis
ANSWER: c
Copyright Cengage Learning. Powered by Cognero. Page 4
,Name: Class: Date:
Chapter 1 – Introduction to Managerial Accounting
31. Which of the following reflects all three of the key aspects of the Triple Bottom Line?
a. measures of employees, customers, and suppliers
b. measures of social, financial, and environmental impact
c. measures of assets, liabilities, and equity of the organization
d. measures of revenues, expenses, and profit of the organization
ANSWER: b
32. Which term refers to the progress of new products through the stages of conception, introduction into
the market, growth, maturity, decline, and eventual withdrawal from a market?
a. product life cycle b. value chain analysis
c. strategic positioning d. continuous improvement
ANSWER: a
33. Which statement best describes activity-based costing?
a. It results in higher revenues.
b. It is a traditional costing method.
c. It encourages efficiency and customer value.
d. It always results in a lower cost assigned to goods or services.
ANSWER: c
34. According to M. E. Porter, which of the following reflects primary activities in the value chain?
a. inbound logistics, operations, outbound logistics, marketing and sales, service
b. procurement, inbound logistics, operations, outbound logistics, marketing and sales, service
c. procurement, technology development, human resources management, developing
infrastructure
d. technology development, human resources management, operations, developing infrastructure
ANSWER: a
35. Which of the following is a characteristic of customer value?
a. the establishment of a competitive advantage by creating better customer value for the same
cost
b. the improvement of costing accuracy by emphasizing the activities and tasks that must be
performed
c. the efficient performance of necessary activities and elimination of activities that do not create
customer value
d. the difference between what a customer receives and what the customer gives up when buying
a product or service
ANSWER: d
36. What is one emphasis of total quality management?
a. 1 percent defects b. the status quo
c. acceptable quality d. the reduction of waste
ANSWER: d
Copyright Cengage Learning. Powered by Cognero. Page 5
,Name: Class: Date:
Chapter 1 – Introduction to Managerial Accounting
37. According to M. E. Porter, which of the following reflects support activities in the value chain?
a. inbound logistics, operations, outbound logistics, marketing and sales, service
b. procurement, inbound logistics, operations, outbound logistics, marketing and sales, service
c. procurement, technology development, human resources management, developing
infrastructure
d. technology development, human resources management, operations, developing infrastructure
ANSWER: c
38. Which employee would normally occupy a line position?
a. the treasurer b. the controller
c. the purchasing manager d. the vice-president of marketing
ANSWER: d
39. Which employee would normally occupy a staff position?
a. an assembly worker b. the factory manager
c. the cost accounting manager d. the vice-president of operations
ANSWER: c
40. Which employee would normally occupy a line position in a hospital?
a. a staff nurse b. the chief of surgery
c. a hospital administrator d. the manager of the cafeteria
ANSWER: b
41. Which statement best describes the controller of an organization?
a. They generally have no influence in policies and decisions.
b. They can have significant input into policies and decisions.
c. They typically set operating policy within the organization.
d. They typically have authority over managers in the production area.
ANSWER: b
42. Which of the following involves choosing actions that are right, proper, and just?
a. balanced costing b. ethical behaviour
c. activity-based costing d. cross-functional perspective
ANSWER: b
43. Virtually all managerial accounting practices were developed to assist managers with which of the
following?
a. determining costs b. maximizing profits
c. generating tax reports d. creating annual reports
ANSWER: b
44. According to the CPA Code of Professional Conduct, what are the fundamental principles of ethics?
a. reputation, professionalism, authority, judgement, conflict of interest
b. professionalism, public interest, integrity and due care, confidentiality, conflict of interest
Copyright Cengage Learning. Powered by Cognero. Page 6
,Name: Class: Date:
Chapter 1 – Introduction to Managerial Accounting
c. professional behaviour, integrity and due care, professional competence, confidentiality,
objectivity
d. professional behaviour, integrity and due care, professional competence, confidentiality,
subjectivity
ANSWER: c
45. Which of the following currently exists as a professional accounting body in Canada?
a. CA Canada b. CPA Canada
c. CGA Canada d. CMA Canada
ANSWER: b
46. According to the CPA Code of Professional Conduct, what are the five fundamental principles of
ethics?
ANSWER: professional behaviour
integrity and due care
professional competence
confidentiality
objectivity
47. Explain the term professional competence.
ANSWER: Professional Competence—Members maintain their professional skills and competence by
keeping informed of, and complying with, developments in their area of professional service.
48. Explain the term professional behaviour.
ANSWER: Professional Behaviour—Members conduct themselves at all times in a manner which will
maintain the good reputation of the profession and its ability to serve the public interest.
49. Explain the term objectivity.
ANSWER: Objectivity—Members do not allow their professional or business judgment to be comprised
by bias, conflict of interest or the undue influence of others.
Select the appropriate definition for each of the items listed below.
a. continuous improvement
b. controller
c. controlling
d. decision making
e. ethical behaviour
f. financial accounting
g. lean accounting
h. line positions
i. managerial accounting
j. planning
k. staff positions
l. time
m. total quality management
n. treasurer
o. value chain
REF: What Is Managerial Accounting? | Information Needs for Planning, Controlling, and
Copyright Cengage Learning. Powered by Cognero. Page 7
, Name: Class: Date:
Chapter 1 – Introduction to Managerial Accounting
Decision Making | Comparison of Managerial and Financial Accounting | Current Focus of
Managerial Accounting | Structure of the Company | Customer Orientation | Total Quality
Management | Managerial Accounting, Ethical Conduct, and Social Responsibility
50. a management activity that involves the detailed formulation of action to achieve a particular end
ANSWER: j
51. the process of choosing among competing alternatives
ANSWER: d
52. the provision of accounting information for a company’s internal users
ANSWER: i
53. the managerial activity of monitoring a plan’s implementation and taking corrective action as needed
ANSWER: c
54. a type of accounting that is primarily concerned with producing information for external users
ANSWER: f
55. a crucial element in all phases of the value chain
ANSWER: l
56. searching for ways to increase the overall efficiency and productivity of activities by reducing waste,
increasing quality, and reducing costs
ANSWER: a
57. the set of activities required to design, develop, produce, market, and deliver products and services to
customers
ANSWER: o
58. a management philosophy in which manufacturers strive to create an environment that will enable
workers to manufacture perfect (zero-defect) products
ANSWER: m
59. organizing costs according to the value chain and collecting both financial and nonfinancial
information
ANSWER: g
60. positions that have direct responsibility for the basic objectives of an organization
ANSWER: h
61. positions that are supportive in nature and have only indirect responsibility for an organization’s basic
objectives
ANSWER: k
62. the chief accounting officer in an organization
ANSWER: b
63. the individual responsible for the finance function; raises capital and manages cash and investments
ANSWER: n
64. choosing actions that are right, proper, and just
Copyright Cengage Learning. Powered by Cognero. Page 8
Accounting , 4th Edition Maryanne M. Mowen
Notes
1- The file is chapter after chapter.
2- We have shown you few pages sample.
3- The file contains all Appendix and Excel sheet
if it exists.
4- We have all what you need, we make update
at every time. There are many new editions
waiting you.
5- If you think you purchased the wrong file You
can contact us at every time, we can replace it
with true one.
Our email:
,Name: Class: Date:
Chapter 1 – Introduction to Managerial Accounting
1. Managerial accounting is designed primarily for external users.
a. True
b. False
ANSWER: False
2. The process of choosing among competing alternatives is called decision making.
a. True
b. False
ANSWER: True
3. The managerial activity of monitoring a plan’s implementation and taking corrective action as needed
is referred to as controlling.
a. True
b. False
ANSWER: True
4. Managerial accounting information is important for both for-profit and not-for-profit organizations.
a. True
b. False
ANSWER: True
5. Managerial accounting information is used only by manufacturing organizations.
a. True
b. False
ANSWER: False
6. In Canada, both financial and managerial accounting are governed by the Accounting Standards Board
(AcSB) of CPA Canada.
a. True
b. False
ANSWER: False
7. Financial accounting has its emphasis primarily on the future.
a. True
b. False
ANSWER: False
8. Managerial accounting is internally focused.
a. True
b. False
ANSWER: True
9. The Triple Bottom Line refers to management putting triple the focus on profits.
Copyright Cengage Learning. Powered by Cognero. Page 1
,Name: Class: Date:
Chapter 1 – Introduction to Managerial Accounting
a. True
b. False
ANSWER: False
10. Activity-based costing is a detailed approach to determining the cost of goods and services.
a. True
b. False
ANSWER: True
11. Customer value is the difference between what a customer receives and what they give up when
buying a product or service.
a. True
b. False
ANSWER: True
12. The value chain refers to the set of activities required to design, develop, produce, market, and deliver
products and services to customers.
a. True
b. False
ANSWER: True
13. Because service organizations do not make or sell tangible products, they have no need for managerial
accounting.
a. True
b. False
ANSWER: False
14. Value chain analysis is a useful way of examining a firm’s competitive advantage.
a. True
b. False
ANSWER: True
15. Positions that have direct responsibility for the basic objectives of an organization are normally
referred to as staff positions.
a. True
b. False
ANSWER: False
16. A cost accountant would normally occupy a line position within an organization.
a. True
b. False
ANSWER: False
Copyright Cengage Learning. Powered by Cognero. Page 2
,Name: Class: Date:
Chapter 1 – Introduction to Managerial Accounting
17. In larger organizations, the controller is typically also the chief executive officer (CEO) of a company.
a. True
b. False
ANSWER: False
18. Virtually all managerial accounting practices were developed to assist managers in maximizing
profits.
a. True
b. False
ANSWER: True
19. The belief that each member of a group bears some responsibility for the well-being of other members
is a common principle underlying all ethical systems.
a. True
b. False
ANSWER: True
20. Professional accountants in Canada now operate as Chartered Professional Accountants (CPAs).
a. True
b. False
ANSWER: True
21. The CPA designation in Canada refers to Certified Professional Accountant.
a. True
b. False
ANSWER: False
22. Which of the following is a characteristic of managerial accounting?
a. It has no mandatory rules.
b. It must adhere to mandatory rules.
c. Its main users are outside of the organization.
d. It provides only objective financial information.
ANSWER: a
23. Which statement best describes managerial accounting reports?
a. The reports are prepared to meet the needs of decision makers within the firm.
b. The reports are prepared for external shareholders, lenders, and tax authorities.
c. The reports are prepared according to International Financial Reporting Standards (IFRS).
d. The reports are prepared according to guidelines prepared by the Ontario Securities
Commission.
ANSWER: a
24. What is an objective of managerial accounting?
a. to comply with international reporting standards
Copyright Cengage Learning. Powered by Cognero. Page 3
,Name: Class: Date:
Chapter 1 – Introduction to Managerial Accounting
b. to provide tax information for planning, controlling, evaluating, and continuous improvement
c. to prepare reports for investors, creditors, government agencies, and other outside users
d. to provide information for the costing of services, products, and other objects of interest to
management
ANSWER: d
25. What is a primary objective of managerial accounting?
a. to provide the Canada Revenue Agency with information about taxable income
b. to provide management with information useful for planning and control of operations
c. to provide banks and other creditors with information useful in making credit decisions
d. to provide existing shareholders and potential investors with useful information for decision
making
ANSWER: b
26. What is an example of the management activity referred to as planning?
a. upgrading outdated equipment
b. outsourcing the organization’s payroll processing
c. developing a strategy to dispose of hazardous waste
d. deciding to eliminate an unprofitable segment of an organization
ANSWER: c
27. What is developing a company strategy for responding to anticipated new markets an example of?
a. planning b. delegating
c. controlling d. decision making
ANSWER: a
28. What is investigating production variances and adjusting the production process an example of?
a. planning b. delegating
c. controlling d. decision making
ANSWER: c
29. Which statement best describes financial accounting?
a. It is internally focused.
b. It has an emphasis on the future.
c. It has no regulatory or mandatory rules.
d. It is concerned with information about the organization as a whole.
ANSWER: d
30. Which term refers to establishing objectives within an organization to include its social and
environmental impact?
a. triple impact b. triple accounting
c. triple bottom line d. triple cost analysis
ANSWER: c
Copyright Cengage Learning. Powered by Cognero. Page 4
,Name: Class: Date:
Chapter 1 – Introduction to Managerial Accounting
31. Which of the following reflects all three of the key aspects of the Triple Bottom Line?
a. measures of employees, customers, and suppliers
b. measures of social, financial, and environmental impact
c. measures of assets, liabilities, and equity of the organization
d. measures of revenues, expenses, and profit of the organization
ANSWER: b
32. Which term refers to the progress of new products through the stages of conception, introduction into
the market, growth, maturity, decline, and eventual withdrawal from a market?
a. product life cycle b. value chain analysis
c. strategic positioning d. continuous improvement
ANSWER: a
33. Which statement best describes activity-based costing?
a. It results in higher revenues.
b. It is a traditional costing method.
c. It encourages efficiency and customer value.
d. It always results in a lower cost assigned to goods or services.
ANSWER: c
34. According to M. E. Porter, which of the following reflects primary activities in the value chain?
a. inbound logistics, operations, outbound logistics, marketing and sales, service
b. procurement, inbound logistics, operations, outbound logistics, marketing and sales, service
c. procurement, technology development, human resources management, developing
infrastructure
d. technology development, human resources management, operations, developing infrastructure
ANSWER: a
35. Which of the following is a characteristic of customer value?
a. the establishment of a competitive advantage by creating better customer value for the same
cost
b. the improvement of costing accuracy by emphasizing the activities and tasks that must be
performed
c. the efficient performance of necessary activities and elimination of activities that do not create
customer value
d. the difference between what a customer receives and what the customer gives up when buying
a product or service
ANSWER: d
36. What is one emphasis of total quality management?
a. 1 percent defects b. the status quo
c. acceptable quality d. the reduction of waste
ANSWER: d
Copyright Cengage Learning. Powered by Cognero. Page 5
,Name: Class: Date:
Chapter 1 – Introduction to Managerial Accounting
37. According to M. E. Porter, which of the following reflects support activities in the value chain?
a. inbound logistics, operations, outbound logistics, marketing and sales, service
b. procurement, inbound logistics, operations, outbound logistics, marketing and sales, service
c. procurement, technology development, human resources management, developing
infrastructure
d. technology development, human resources management, operations, developing infrastructure
ANSWER: c
38. Which employee would normally occupy a line position?
a. the treasurer b. the controller
c. the purchasing manager d. the vice-president of marketing
ANSWER: d
39. Which employee would normally occupy a staff position?
a. an assembly worker b. the factory manager
c. the cost accounting manager d. the vice-president of operations
ANSWER: c
40. Which employee would normally occupy a line position in a hospital?
a. a staff nurse b. the chief of surgery
c. a hospital administrator d. the manager of the cafeteria
ANSWER: b
41. Which statement best describes the controller of an organization?
a. They generally have no influence in policies and decisions.
b. They can have significant input into policies and decisions.
c. They typically set operating policy within the organization.
d. They typically have authority over managers in the production area.
ANSWER: b
42. Which of the following involves choosing actions that are right, proper, and just?
a. balanced costing b. ethical behaviour
c. activity-based costing d. cross-functional perspective
ANSWER: b
43. Virtually all managerial accounting practices were developed to assist managers with which of the
following?
a. determining costs b. maximizing profits
c. generating tax reports d. creating annual reports
ANSWER: b
44. According to the CPA Code of Professional Conduct, what are the fundamental principles of ethics?
a. reputation, professionalism, authority, judgement, conflict of interest
b. professionalism, public interest, integrity and due care, confidentiality, conflict of interest
Copyright Cengage Learning. Powered by Cognero. Page 6
,Name: Class: Date:
Chapter 1 – Introduction to Managerial Accounting
c. professional behaviour, integrity and due care, professional competence, confidentiality,
objectivity
d. professional behaviour, integrity and due care, professional competence, confidentiality,
subjectivity
ANSWER: c
45. Which of the following currently exists as a professional accounting body in Canada?
a. CA Canada b. CPA Canada
c. CGA Canada d. CMA Canada
ANSWER: b
46. According to the CPA Code of Professional Conduct, what are the five fundamental principles of
ethics?
ANSWER: professional behaviour
integrity and due care
professional competence
confidentiality
objectivity
47. Explain the term professional competence.
ANSWER: Professional Competence—Members maintain their professional skills and competence by
keeping informed of, and complying with, developments in their area of professional service.
48. Explain the term professional behaviour.
ANSWER: Professional Behaviour—Members conduct themselves at all times in a manner which will
maintain the good reputation of the profession and its ability to serve the public interest.
49. Explain the term objectivity.
ANSWER: Objectivity—Members do not allow their professional or business judgment to be comprised
by bias, conflict of interest or the undue influence of others.
Select the appropriate definition for each of the items listed below.
a. continuous improvement
b. controller
c. controlling
d. decision making
e. ethical behaviour
f. financial accounting
g. lean accounting
h. line positions
i. managerial accounting
j. planning
k. staff positions
l. time
m. total quality management
n. treasurer
o. value chain
REF: What Is Managerial Accounting? | Information Needs for Planning, Controlling, and
Copyright Cengage Learning. Powered by Cognero. Page 7
, Name: Class: Date:
Chapter 1 – Introduction to Managerial Accounting
Decision Making | Comparison of Managerial and Financial Accounting | Current Focus of
Managerial Accounting | Structure of the Company | Customer Orientation | Total Quality
Management | Managerial Accounting, Ethical Conduct, and Social Responsibility
50. a management activity that involves the detailed formulation of action to achieve a particular end
ANSWER: j
51. the process of choosing among competing alternatives
ANSWER: d
52. the provision of accounting information for a company’s internal users
ANSWER: i
53. the managerial activity of monitoring a plan’s implementation and taking corrective action as needed
ANSWER: c
54. a type of accounting that is primarily concerned with producing information for external users
ANSWER: f
55. a crucial element in all phases of the value chain
ANSWER: l
56. searching for ways to increase the overall efficiency and productivity of activities by reducing waste,
increasing quality, and reducing costs
ANSWER: a
57. the set of activities required to design, develop, produce, market, and deliver products and services to
customers
ANSWER: o
58. a management philosophy in which manufacturers strive to create an environment that will enable
workers to manufacture perfect (zero-defect) products
ANSWER: m
59. organizing costs according to the value chain and collecting both financial and nonfinancial
information
ANSWER: g
60. positions that have direct responsibility for the basic objectives of an organization
ANSWER: h
61. positions that are supportive in nature and have only indirect responsibility for an organization’s basic
objectives
ANSWER: k
62. the chief accounting officer in an organization
ANSWER: b
63. the individual responsible for the finance function; raises capital and manages cash and investments
ANSWER: n
64. choosing actions that are right, proper, and just
Copyright Cengage Learning. Powered by Cognero. Page 8
