ACG 2071 - CHAPTER 1 EXAM QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2026
American Institute of Certified Accountants (AICPA) - Answers The world's largest association
representing the accounting profession; together with the Charted institute of Management
Accountants (CIMA), offers the Chartered Global Management Accountant (CGMA) designation
Audit Committee - Answers A subcommittee of the board of directors that is responsible for
overseeing both the internal audit function and the annual financial statement audit by independent
CPAs
Board of Directors - Answers The body elected by shareholders to oversee the company
Budget - Answers Quantitative expression of a plan that helps managers coordinate and implement
the plan
Certified Management Accountant - Answers A professional certification issued by the IMA to
designate expertise in the areas of managerial accounting, economics and business finance
Chartered Global Management Accountant (CGMA) - Answers A designation available to qualifying
American Institute of Certified Public Accountants (AICPA) members that is meant to recognize the
unique business and accounting skill set by those CPAs who work, or have worked in business,
industry, or government
Chief Executive Officer (CEO) - Answers The position hired by the board of directors to oversee the
company on a daily basis
Chief Financial Officer (CFO) - Answers The position responsible for all of the company's financial
concerns
Chief Operating Officer (COO) - Answers The position responsible for overseeing the company's
operations
Controller - Answers The position responsible for general financial accounting, managerial
accounting, and tax reporting
Controlling - Answers One of management's primary responsibilities; evaluating the result of business
operations against the plan and making adjustments to keep the company pressing towards it goals
Cost-Benefit Analysis - Answers Weighing costs against benefits to help make decisions
Critical Thinking - Answers Improving the quality of thought by skillfully analyzing, assessing and
reconstructing it
Cross-Functional Teams - Answers Corporate teams whose members represent various functions of
the organization, such as R&D, design, production, marketing, distribution and customer service
Decision Making - Answers Identifying possible courses of action and choosing among them
Directing - Answers One of management's primary responsibilities; running the company on a day-to-
day basis
Enterprise Resource Planing (ERP) - Answers Software systems that can integrate all of the company's
worldwide functions, departments and data into a single system
Institute of Management Accountants (IMA) - Answers The professional organization that promotes
the advancement of the management accounting profession
Integrated Reporting - Answers A process resulting in a report that describes how a company is
creating value over time using financial, manufactured, intellectual, human, social and natural capital
Internal Audit Function - Answers The corporate function charged with assessing the effectiveness of
the company's internal controls and risk management policies
Lean Thinking - Answers A philosophy and business strategy of operating without waste
Management Accounting - Answers A profession that involves partnering in management decision
making, devising planning and performance management systems, and providing expertise in financial
reporting and control to assist management in the formulation and implementation of an
organization's strategy
Planning - Answers One of managements primary responsibility: setting goals and objectives for the
company and deciding how to achieve them
Sarbanes-Oxley Act of 2002 (SOX) - Answers A congressional act that enhances internal control and
financial reporting requirements and establishes new regulatory requirements for publicly traded
companies and their independent auditors
Six Sigma - Answers The goal of producing near perfection with less than 3.4 defects per million
opportunities
Sustainability - Answers The ability to meet the needs of the present without compromising the
ability of future generations to meet their own needs
American Institute of Certified Accountants (AICPA) - Answers The world's largest association
representing the accounting profession; together with the Charted institute of Management
Accountants (CIMA), offers the Chartered Global Management Accountant (CGMA) designation
Audit Committee - Answers A subcommittee of the board of directors that is responsible for
overseeing both the internal audit function and the annual financial statement audit by independent
CPAs
Board of Directors - Answers The body elected by shareholders to oversee the company
Budget - Answers Quantitative expression of a plan that helps managers coordinate and implement
the plan
Certified Management Accountant - Answers A professional certification issued by the IMA to
designate expertise in the areas of managerial accounting, economics and business finance
Chartered Global Management Accountant (CGMA) - Answers A designation available to qualifying
American Institute of Certified Public Accountants (AICPA) members that is meant to recognize the
unique business and accounting skill set by those CPAs who work, or have worked in business,
industry, or government
Chief Executive Officer (CEO) - Answers The position hired by the board of directors to oversee the
company on a daily basis
Chief Financial Officer (CFO) - Answers The position responsible for all of the company's financial
concerns
Chief Operating Officer (COO) - Answers The position responsible for overseeing the company's
operations
Controller - Answers The position responsible for general financial accounting, managerial
accounting, and tax reporting
Controlling - Answers One of management's primary responsibilities; evaluating the result of business
operations against the plan and making adjustments to keep the company pressing towards it goals
Cost-Benefit Analysis - Answers Weighing costs against benefits to help make decisions
Critical Thinking - Answers Improving the quality of thought by skillfully analyzing, assessing and
reconstructing it
Cross-Functional Teams - Answers Corporate teams whose members represent various functions of
the organization, such as R&D, design, production, marketing, distribution and customer service
Decision Making - Answers Identifying possible courses of action and choosing among them
Directing - Answers One of management's primary responsibilities; running the company on a day-to-
day basis
Enterprise Resource Planing (ERP) - Answers Software systems that can integrate all of the company's
worldwide functions, departments and data into a single system
Institute of Management Accountants (IMA) - Answers The professional organization that promotes
the advancement of the management accounting profession
Integrated Reporting - Answers A process resulting in a report that describes how a company is
creating value over time using financial, manufactured, intellectual, human, social and natural capital
Internal Audit Function - Answers The corporate function charged with assessing the effectiveness of
the company's internal controls and risk management policies
Lean Thinking - Answers A philosophy and business strategy of operating without waste
Management Accounting - Answers A profession that involves partnering in management decision
making, devising planning and performance management systems, and providing expertise in financial
reporting and control to assist management in the formulation and implementation of an
organization's strategy
Planning - Answers One of managements primary responsibility: setting goals and objectives for the
company and deciding how to achieve them
Sarbanes-Oxley Act of 2002 (SOX) - Answers A congressional act that enhances internal control and
financial reporting requirements and establishes new regulatory requirements for publicly traded
companies and their independent auditors
Six Sigma - Answers The goal of producing near perfection with less than 3.4 defects per million
opportunities
Sustainability - Answers The ability to meet the needs of the present without compromising the
ability of future generations to meet their own needs
