ACCT 505 CHAPTER 1 SELFSTUDY QUIZ

ACCT 505 CHAPTER 1 SELFSTUDY QUIZ 1 CORRECT Managerial accounting is concerned with: A) reporting financial information to stockholders. B) reporting financial information to regulators. C) providing information for use within the organization. D) the financial consequences of past activities. Feedback: Managerial accounting is concerned with providing information to managers for use within the organization. 2 CORRECT Which of the following statements is not correct? A) A plan is always expressed in formal quantitative terms. B) Planning involves establishing goals and specifying how to achieve them. C) Controlling involves gathering feedback to ensure that the plan is being properly executed or modified as circumstances change. D) Decision making involves selecting a course of action from competing alternatives. Feedback: Plans include the goals established and information specifying how those goals will be achieved. As such, plans may or may not be expressed in formal quantitative terms. On the other hand, plans are often accompanied by a budget. A budget is a detailed plan for the future that is usually expressed in formal quantitative terms. 3 CORRECT A performance report: A) is part of the control process. B) compares budgeted data to actual data in an effort to identify excellent performance. C) is prepared to identify unsatisfactory performance. D) is all of the above. Feedback: Part of the control process includes preparing performance reports. A performance report compares budgeted data to actual data in an effort to highlight instances of excellent and unsatisfactory performance. 4 CORRECT Which of the following statements is not correct? ACCT 505 CHAPTER 1 SELFSTUDY QUIZ A) Corporate social responsibility is a process used by a company to identify risks relating to strategy, plan, and decision and develop responses to them that enable it to be reasonably assured of meeting its goals. B) Controls cannot completely eliminate risks. C) Risk management is a critically important aspect of decision making. D) All of the above are correct statements. Feedback: Enterprise risk management responsibility is a process used by a company to identify risks relating to strategy, plan, and decision and develop responses to them that enable it to be reasonably assured of meeting its goals. Corporate social responsibility is a concept whereby organizations consider the needs of all stakeholders when making decisions. 5 CORRECT Which of the following statements is correct? A) A business process consists of the major business functions that add value to a company's products and services. B) Lean production bloats inventories and results in more defects. C) A strategy is a game plan that enables companies to attract customers by distinguishing itself from competitors. D) All of the above statements are correct. Feedback: A business process is a series of steps that are followed in order to carry out some task in a business. On the other hand, a value chain consists of the major business functions that add value to a company's products and services. (Thus, choice A is an incorrect statement.) Lean production differs from traditional manufacturing methods, which encourage departments to maximize their output even it if exceeds customer demand and bloats inventories. Because lean production only allows production in response to customer orders, minimal inventories result. This approach also results in fewer defects than traditional production methods. (Thus, choice B is an incorrect statement.) A strategy is a game plan that enables companies to attract customers by distinguishing itself from competitors. (Thus, choice C is the correct statement.) 6 CORRECT The focal point of a company's strategy should be: A) profitability. B) the quality of its products and/or services. C) its target customers. D) integrity