Name: Class: Date:
Complete Test Bank
Cost Management 5th Edition by Don Hansen, Maryanne
Mowen, Dan Heitger
Chapter 1-21 Answers are at the end of Each Chapter
Chapter 1
Indicate whether the statement is true or false.
1. The Certificate of Public Accounting does NOT include the right to serve as external auditor s.
a. True
b. False
2. In resolving an ethical conflict, it would be appropriate to take the matter to the press where there's no legal
requirement.
a. True
b. False
3. For each certification, all an applicant has to do is meet specific educational and experience requirements.
a. True
b. False
4. Employee and customer loyalty are NOT a result of a strong code of ethics.
a. True
b. False
5. An accounting information system collects, records, summarizes, analyzes, and manages data to transform inputs into
information that is provided to users.
a. True
b. False
6. Firms subject to the Sarbanes-Oxley Act do not have to disclose whether they have a code of ethics for senior financial
officers, nor why.
a. True
b. False
7. The Institute of Management Accountants has established ethical standards for management accountants.
a. True
b. False
8. Three of the major certifications available to management accountants are a Certificate in Management Accounting, a
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,Name: Class: Date:
Certificate in Public Accounting, and a Certificate in Internal Auditing.
a. True
b. False
9. Preparing reports for division managers is an activity associated with the cost management information system.
a. True
b. False
10. The process of choosing among competing alternatives is called decision making.
a. True
b. False
11. The focus of lean manufacturing is to eliminate waste, which is anything that does not add value to the end user
(customer).
a. True
b. False
12. The role of cost and management accountants is one of support and teamwork and assistance of those who are
responsible for achieving a company's basic objectives.
a. True
b. False
13. In just-in-time (JIT) manufacturing, each operation produces only what is necessary for the succeeding operations.
a. True
b. False
14. The examination for obtaining the Certificate in Management Accounting consists of two parts: (1) Technology and
Analytics and (2) Strategic Financial Management.
a. True
b. False
15. Positions that have direct responsibility for basic objectives are referred to as staff positions, and those indirectly
responsible are called line positions.
a. True
b. False
16. The controller of a company supervises all the accounting departments and is often viewed as a member of the top
management team.
a. True
b. False
17. Divulging company information when NOT legally obligated to do so violates the confidentiality part of the IMA
code of ethics.
a. True
b. False
18. The service sector of the U.S. economy has decreased in importance as traditional industries have declined in
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,Name: Class: Date:
importance.
a. True
b. False
19. One of the major advances in information technology that affects firms is the emergence of electronic commerce.
a. True
b. False
20. The three broad objectives of financial accounting information systems are to provide information for costing out
services and products, planning and control, and decision making.
a. True
b. False
21. Evaluating the performance of a segment of the company is an example of planning.
a. True
b. False
22. Changes in the way business is conducted worldwide have broadened the focus of cost management accounting
systems.
a. True
b. False
23. The cost management information system is primarily concerned with producing outputs for external users.
a. True
b. False
24. The Certified Internal Auditor must pass a comprehensive examination designed to ensure technical competence and
have two years' work experience.
a. True
b. False
25. Business ethics is learning what is right or wrong in the work environment and choosing what is right.
a. True
b. False
26. The treasurer of a company is responsible for all taxation activities, including dealing with the IRS.
a. True
b. False
27. Enterprise resource planning (ERP) software has the objective of providing an integrated system capability and is able
to run all the operations of a company.
a. True
b. False
28. The cost management information system has two major subsystems: the cost accounting information system and the
operational control information system.
a. True
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, Name: Class: Date:
b. False
29. JIT is a critical part of a more comprehensive approach referred to as lean manufacturing.
a. True
b. False
30. The two major subsystems of the accounting information system are the financial accounting information system and
the cost management accounting information system.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
31. Which of the following are Standards of Ethical Conduct for Management Accountants?
a. perseverance and creativity
b. determination and respect for others
c. discipline, confidence, competitive, and observance
d. competence, confidentiality, integrity, resolution of ethical conflict, and credibility
32. Which of the following relates to the credibility section of the IMA code of ethics?
a. Prepare clear and complete reports.
b. Communicate professional limitations.
c. Avoid actual or apparent conflicts of interest.
d. Communicate information fairly and objectively.
33. Financial accounting information is used for
a. investment decisions.
b. regulatory measures.
c. stewardship evaluation.
d. All of these choices
34. The type of management that broadens the focus of accounting because it is concerned with factors that drive costs,
such as cycle time and process productivity, is called
a. cost accounting.
b. cost management.
c. financial management.
d. financial accounting.
35. In a performance report, the
a. differences between actual costs and allowed costs are always undesirable.
b. expenditures of less than allowed amounts are undesirable.
c. expenditures of more than allowed amounts are not permitted to occur.
d. expenditures of less than allowed amounts are desirable.
36. Which of the following is NOT part of the financial accounting information system?
Copyright Cengage Learning. Powered by Cognero. Page 4
Complete Test Bank
Cost Management 5th Edition by Don Hansen, Maryanne
Mowen, Dan Heitger
Chapter 1-21 Answers are at the end of Each Chapter
Chapter 1
Indicate whether the statement is true or false.
1. The Certificate of Public Accounting does NOT include the right to serve as external auditor s.
a. True
b. False
2. In resolving an ethical conflict, it would be appropriate to take the matter to the press where there's no legal
requirement.
a. True
b. False
3. For each certification, all an applicant has to do is meet specific educational and experience requirements.
a. True
b. False
4. Employee and customer loyalty are NOT a result of a strong code of ethics.
a. True
b. False
5. An accounting information system collects, records, summarizes, analyzes, and manages data to transform inputs into
information that is provided to users.
a. True
b. False
6. Firms subject to the Sarbanes-Oxley Act do not have to disclose whether they have a code of ethics for senior financial
officers, nor why.
a. True
b. False
7. The Institute of Management Accountants has established ethical standards for management accountants.
a. True
b. False
8. Three of the major certifications available to management accountants are a Certificate in Management Accounting, a
Copyright Cengage Learning. Powered by Cognero. Page 1
,Name: Class: Date:
Certificate in Public Accounting, and a Certificate in Internal Auditing.
a. True
b. False
9. Preparing reports for division managers is an activity associated with the cost management information system.
a. True
b. False
10. The process of choosing among competing alternatives is called decision making.
a. True
b. False
11. The focus of lean manufacturing is to eliminate waste, which is anything that does not add value to the end user
(customer).
a. True
b. False
12. The role of cost and management accountants is one of support and teamwork and assistance of those who are
responsible for achieving a company's basic objectives.
a. True
b. False
13. In just-in-time (JIT) manufacturing, each operation produces only what is necessary for the succeeding operations.
a. True
b. False
14. The examination for obtaining the Certificate in Management Accounting consists of two parts: (1) Technology and
Analytics and (2) Strategic Financial Management.
a. True
b. False
15. Positions that have direct responsibility for basic objectives are referred to as staff positions, and those indirectly
responsible are called line positions.
a. True
b. False
16. The controller of a company supervises all the accounting departments and is often viewed as a member of the top
management team.
a. True
b. False
17. Divulging company information when NOT legally obligated to do so violates the confidentiality part of the IMA
code of ethics.
a. True
b. False
18. The service sector of the U.S. economy has decreased in importance as traditional industries have declined in
Copyright Cengage Learning. Powered by Cognero. Page 2
,Name: Class: Date:
importance.
a. True
b. False
19. One of the major advances in information technology that affects firms is the emergence of electronic commerce.
a. True
b. False
20. The three broad objectives of financial accounting information systems are to provide information for costing out
services and products, planning and control, and decision making.
a. True
b. False
21. Evaluating the performance of a segment of the company is an example of planning.
a. True
b. False
22. Changes in the way business is conducted worldwide have broadened the focus of cost management accounting
systems.
a. True
b. False
23. The cost management information system is primarily concerned with producing outputs for external users.
a. True
b. False
24. The Certified Internal Auditor must pass a comprehensive examination designed to ensure technical competence and
have two years' work experience.
a. True
b. False
25. Business ethics is learning what is right or wrong in the work environment and choosing what is right.
a. True
b. False
26. The treasurer of a company is responsible for all taxation activities, including dealing with the IRS.
a. True
b. False
27. Enterprise resource planning (ERP) software has the objective of providing an integrated system capability and is able
to run all the operations of a company.
a. True
b. False
28. The cost management information system has two major subsystems: the cost accounting information system and the
operational control information system.
a. True
Copyright Cengage Learning. Powered by Cognero. Page 3
, Name: Class: Date:
b. False
29. JIT is a critical part of a more comprehensive approach referred to as lean manufacturing.
a. True
b. False
30. The two major subsystems of the accounting information system are the financial accounting information system and
the cost management accounting information system.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
31. Which of the following are Standards of Ethical Conduct for Management Accountants?
a. perseverance and creativity
b. determination and respect for others
c. discipline, confidence, competitive, and observance
d. competence, confidentiality, integrity, resolution of ethical conflict, and credibility
32. Which of the following relates to the credibility section of the IMA code of ethics?
a. Prepare clear and complete reports.
b. Communicate professional limitations.
c. Avoid actual or apparent conflicts of interest.
d. Communicate information fairly and objectively.
33. Financial accounting information is used for
a. investment decisions.
b. regulatory measures.
c. stewardship evaluation.
d. All of these choices
34. The type of management that broadens the focus of accounting because it is concerned with factors that drive costs,
such as cycle time and process productivity, is called
a. cost accounting.
b. cost management.
c. financial management.
d. financial accounting.
35. In a performance report, the
a. differences between actual costs and allowed costs are always undesirable.
b. expenditures of less than allowed amounts are undesirable.
c. expenditures of more than allowed amounts are not permitted to occur.
d. expenditures of less than allowed amounts are desirable.
36. Which of the following is NOT part of the financial accounting information system?
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