CRM 101 FINAL EXAM QUESTIONS

CRM 101 FINAL EXAM QUESTIONS 37. Managerial accounting a. is concerned with costing products. b. is governed by generally accepted accounting principles. c. pertains to the entity as a whole and is highly aggregated. d. places emphasis on special-purpose information. 38. Managerial accounting information is generally prepared for a. stockholders. b. managers. c. regulatory agencies. d. investors. 39. Managerial accounting information a. pertains to the entity as a whole and is highly aggregated. b. must be prepared according to generally accepted accounting principles. c. pertains to subunits of the entity and may be very detailed. d. is prepared only once a year. 40. The major reporting standard for management accounting is a. the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management. b. the Sarbanes-Oxley Act of 2002. c. relevance to decisions. d. generally accepted accounting principles. 41. Managerial accounting is also called a. inside reporting. b. cost accounting. c. management accounting. d. strategic management. 42. Which of the following is not an internal user? a. Corporate officers b. Staff employees c. Stockholders d. Department manager 43. Which of the following is not part of managerial accounting? a. Determining whether planned goals are being met b. Reporting financial information to the shareholders c. Calculating product costs d. Controlling costs 44. Which of the following uses managerial accounting? a. Manufacturing and service entities, but not merchandising b. Profit-oriented businesses only c. Service, manufacturing, and merchandising entities d. Only manufacturing entities 45. Which one of the following tasks would not be performed by a management accountant? a. Being concerned with the impact of cost and volume on profits b. Strategic cost management c. Assisting in budget planning d. Preparing reports primarily for external users 46. How often are internal managerial reports communicated? a. As frequently as needed b. Annually c. During every audit by the company’s CA d. Monthly 47. Which description identifies financial statements that are prepared for external users? a. External reports b. Special-purpose c. User-specific d. General-purpose 48. Which term describes managerial accounting reports? a. GAAP reports b. Special-purpose c. General-purpose d. Regulatory reports 49. Which of the following statements about internal reports is true? a. Most internal reports are summarized rather than detailed. b. Internal reports focus on general purpose needs of users. c. The content of internal reports extends beyond the double-entry accounting system. d. Internal reports are often very general. 50. Which one of the following describes internal reports? a. They are often audited by CAs. b. They must be prepared according to GAAP. c. They are aggregated. d. They are detailed. 51. Which of the following reports would management find useful in decision making? a. Monthly reports on activities to the Board of Directors b. Quarterly reporting to the Toronto Stock Exchange c. Specific purpose statements on services delivered d. Audited financial information in the annual report to shareholders 52. How often should management receive or prepare reports on its internal process activities? a. On a fixed time basis b. As often as is necessary c. Never more than monthly d. Weekly 53. How often should management receive or prepare reports on its external business process activities? a. As they correspond to external financial reporting b. Never more than monthly c. According to the company’s business cycle d. As often as is necessary 54. A company must inform readers of its annual report of: a. All changes in financial accounting policies. b. Results of any overseas activities. c. All changes in internal accounting information. b. Changes to management’s bonus system. 55. How could management information assist in motivating its employees? a. Keeping track of quality improvements b. Showing the company’s percent of market share c. Showing statistics on plant safety d. All areas would benefit from providing internal management information 56. In establishing a good internal reporting system, a company should: a. Ensure that these reports agree to generally accepted accounting principles. b. Have the Board of Directors agree to the information provided. c. Establish clearly understood standards of performance. d. All of the above are valid reasons. 57. What broad functions do the management of an organization perform? a. Directing, manufacturing, and controlling b. Planning, directing, and controlling c. Planning, directing, and selling d. Planning, manufacturing and controlling 58. Which one of the following involves coordinating a company’s activities to produce a smooth- running operation? a. Auditing b. Controlling c. Planning d. Directing 59. Which one of the following does the planning function involve? a. Analyzing financial statements b. Setting goals and objectives for an entity c. Hiring the right people for a particular job d. Coordinating the accounting information system 60. Which one of the following is true concerning the managerial function of controlling? a. It includes performance evaluation by management. b. It is concerned mainly with operating a manufacturing segment. c. It is performed only by the controller of a company. d. It includes hiring and training employees. 61. Which of the following represents two management functions? a. Regulating and directing b. Controlling and directing c. Controlling and auditing d. Auditing and planning 62. Which management function is a manager performing when objectives are being established? a. Regulating b. Planning c. Motivating d. Directing 63. The organization chart of a company shows: a. the interrelationships of activities within a company. b. the delegation of authority within a company. c. the delegation of responsibility within a company. d. all of the above. 64. Which function is achieved when a manager is determining whether planned goals are being met? a. Controlling b. Motivating c. Planning d. Directing 65. What activities and responsibilities are not associated with management’s functions? a. Planning b. Accountability c. Controlling d. Directing 66. Directing includes a. providing a framework for management to have criteria to terminate employees when needed. b. running a department under quality control standards universally accepted. c. coordinating a company’s diverse activities and human resources to produce a smooth- running operation. d. developing a performance ranking system to give certain high performers good raises. 67. Which of the following is true? a. Managerial accountants are the employees who are principally responsible for ethical behaviour. b. Investment losses have been precipitated by lax ethical standards. c. Corporate fraud was found to have decreased between the years 1998 and 2003. d. Expense account abuse has been cited as one of the rarest forms of unethical employee behaviour. 68. Choose the incorrect answer. a. While generally not encouraged, lapses in ethical behaviour are irrelevant to a company’s operating income. b. Proper incentives need to be implemented to foster an ethical business environment. c. Manufacturing companies need to establish effective and realistic production goals for their processes. d. As a result of the Sarbanes-Oxley Act, companies now pay more attention to the composition of the board of directors. 69. Which is the best definition of fraud? a. Unknowingly misrepresenting the facts b. Using business supplies for personal use c. The intentional misstatement of facts d. Misappropriating funds for personal financial gain 70. Which of the following is true? a. Dissatisfied employees cite a decline in ethical behaviour is a result of a change in corporate culture. b. Unethical corporate behaviour occurs only in the United States because of its capitalistic environment. c. Unethical behaviour rarely causes a decline in investor confidence. d. Unethical actions are reasonable in an environment wherein unreasonable budgets and targets have been set. 71. The production manager at ABC Inc. is responsible for formulating the budget for his department. He will be evaluated on his ability to control costs. After considerable thought, he arrives at his best estimate of costs, and then adds a further 10% to the projections. Chances are he has inflated the cost projections because a. that is the way it has always been done. b. conservative accounting practise requires that he not under report expenses. c. by overestimating expenses, it will make it easier for him to come in under budget and receive a favourable evaluation. d. none of the above. 72. In Canada, which of the following professional accounting organizations play an important role in promoting high standards of ethics in the accounting profession? a. The Society of Management Accountants of Canada b. The Canadian Institute of Chartered Accountants c. The Certified General Accountants Association of Canada d. All of the above 73. The Ontario Securities Commission introduced regulations governing the composition and duties of audit committees, as well as their members’ behaviour. The new rules: a. are as robust as parallel rules required by the U.S. Sarbanes-Oxley Act. b. were adopted by all provincial and territorial securities regulators, except for British Columbia’s. c. were introduced in conjunction with the Canadian Securities Administrators. d. all of the above. 74. A company acting ethically must adapt its external reports to any changes required: a. Instantly. b. As it is appropriate for its business cycle. c. As stipulated by the CICA. d. If they are considered pertinent to its business activities. 75. A company acting ethically must adapt its internal reports to any changes required: a. Instantly. b. As it is appropriate for its business cycle. c. As stipulated by the CICA. d. If they are considered pertinent to its business activities. 76. Which one of the following managerial accounting approaches attempts to allocate manufacturing overhead in a more meaningful fashion? a. Theory of constraints b. Just-in-time inventory c. Activity-based costing d. Total-quality management 77. Which one of the following is not a main component of the value chain sequence? a. ERP b. Sales and marketing c. Production d. Customer relations 78. What is one primary benefit of an enterprise resource planning (ERP) system? a. It reduces inventory levels. b. It permits companies to be more streamlined in production. c. It replaces research and development in a company. d. It requires an increased emphasis on product quality. 79. One of the advantages of a just in time inventory system is that it reduces inventory quantities. Why is this considered to be a benefit? a. Carrying inventory incurs storage costs, hence reducing inventory quantities reduces costs. b. Carrying large inventory raises the risk that customers will want an item that you do not have. c. Carrying large inventory reduces the risk that customers will want an item that you do not have. d. None of the above. 80. What is “balanced” in the balanced scorecard approach? a. The number of products produced b. The emphasis on financial and non-financial performance measurements c. The amount of costs allocated to products d. The number of defects found on each product 81. For what purpose is the theory of constraints used? a. To reduce product defects b. To balance performance measurement c. To identify and manage constraints that bottle-neck operations d. To reduce inventory levels 82. In Canada the three different professional accounting designations are a. CPA, CA, CMA b. CMA, CGA, CPA c. CA, CMA, CGA d. MA, CPA, CA 83. Which of the following is not required to become a CMA? a. Completion of a university degree b. Candidates must pass an entrance exam into the CMA program c. Completion of a two-year strategic leadership program concurrently with gaining industry experience d. Completion of a national exit exam. 84. Choose the correct statement. a. CGA stands for Certified Generic Accountant. b. CMA stands for Certified Managing Accountant. c. CA stands for Chartered Accountant. d. CPA stands for Certified Professional Accountant. 85. Which of the following statements is true? a. In recent decades, the Canadian economy in general has shifted towards an emphasis on providing services rather than goods. This trend has reduced the importance of managerial accounting. b. In recent decades, the Canadian economy in general has shifted towards an emphasis on providing goods rather than services. This trend has reduced the importance of managerial accounting. c. In recent decades, the Canadian economy in general has shifted towards an emphasis on providing services rather than goods. This trend has NOT reduced the importance of managerial accounting. d. In recent decades, the Canadian economy in general has shifted towards an emphasis on providing goods rather than services. This trend has NOT reduced the importance of managerial accounting. 86. Which statement is correct? a. All three of Canada’s professional accounting designations require completion of a university degree in accounting. b. All three of Canada’s professional accounting designations require completion of some post-secondary education. c. The educational requirements of the three professional accounting designations focus on broadly-based accounting and financial management concepts. d. Each of the three professional accounting bodies publishes its own magazine to promote the interests of its membership. 87. Though their areas of specialization overlap, which of the three bodies of professionally designated accountants would be best to engage for implementation of an activity-based costing inventory system? a. Chartered Accountant b. Certified General Accountant c. Certified Public Accountant d. Certified Management Accountant 88. What term describes all activities associated with providing a product or service? a. The manufacturing chain b. The product chain c. The supply chain d. The value chain 89. How do most companies manage their value chain? a. By using activity-based costing b. By creating enterprise resource planning systems c. Using an action plan d. Using total quality management systems 90. How have many companies significantly lowered inventory levels and costs? a. They use activity-based costing. b. They utilize an enterprise resource planning system. c. They have a just-in-time method. d. They focus on a total quality management system. 91. Some companies implement systems to reduce defects in finished products with the goal of achieving zero defects. What are these systems called? a. Activity-based costing systems b. Enterprise resource planning systems c. Value chain systems d. Total quality management systems 92. In order to obtain more accurate product costs, how do many companies allocate overhead? a. They use activity-based costing. b. They use enterprise resource planning systems. c. They use just-in-time methods. d. They use total quality management systems. 93. Many companies now manufacture products that are untouched by human hands. What do they use to achieve this? a. Activity-based costing b. Computer-integrated manufacturing c. Enterprise resource planning systems d. Total quality management systems 94. Which one of the following characteristics would likely be associated with a Just-In-Time inventory method? a. Ending inventory of work in process that would allow several production runs b. A backlog of inventory orders not yet shipped c. Minimal finished goods inventory on hand d. An understanding with customers that they may come to the showroom and select from inventory on hand 95. What is value chain management best defined as? a. A large chain that keeps the machines from falling on the production floor b. Management decisions that affect how quickly the production run occurs c. The incremental value of costs associated with hiring a new production floor leader d. All activities associated with providing a product or service 96. Which one of the following is an example of activity-based costing? a. Monitoring the salaries of managers that do untimely quality control checks b. Keeping close track of shrinkage associated with thefts off the showroom floor c. Insuring that management is closely working with the local union on keeping labour costs in line d. Allocating the set up cost associated with getting a machine ready for a production run 97. Bottlenecks are: a. The point at which the finished product leaves the factory. b. Constraints that limit the company’s potential profitability. c. The point at which a company’s plan is put into action. d. Are factors that consume a great deal of managers’ attention, but have little impact on the company as a whole. 98. For what reason is a product cost primarily tracked? a. To keep up with current cost trends to bring products to arket b. To effectively allocate the cost of products to measure profitability c. To determine what amounts are necessary for allocating overhead d. To keep management’s bonuses increasing every year 99. Which one of the following is an activity not associated with TQM? a. Tightening the bolts on a chassis so that the frame will not drop out b. Redesigning the gas tank after learning fuel efficiency standards are not being met c. Verifying the 10 check points associated with producing the highest quality loaf of bread d. Ensuring that the mattress just manufactured meets the standard of comfort of a random factory line worker 100. The theory of constraints is a. a theory that the benefit of making a change in a production process should be weighed against the cost of making that change. b. that even the best suggestions for improvement are likely to be rejected due to opposition from those who have to implement the changes. c. a specific approach used to identify and manage constraints in order to achieve the company’s goals. d. not applicable to service operations. 101. What is ERP? a. Efficient resource procurement b. Earnings reporting policies c. Enterprise resource planning d. Effective resource procurement 102. A balanced scorecard is a. a performance-measurement approach that uses both financial and non-financial measures to evaluate a company’s operations in an integrated way. b. a tool used to measure the benefits and costs of implementing a new strategy. c. used only by small organizations that cannot afford more expensive methods of evaluating their operations. d. focuses on non-financial measures in order to balance the many other financial reports companies use to evaluate their operations. 103. Which component of a company’s value chain would benefit most from internal management information? a. Complaints from its customers over services offered b. Bonuses paid to managers of the company c. The company’s efforts to develop new services d. All such components would benefit from internal management information 104. Managerial accounting has become more important in service industries due to: a. The decline of the manufacturing sector has freed up many accountants. b. Service delivery is extremely complex and requires proper monitoring. c. The economy has become more service-oriented recently. d. The increase in complexity in computer systems requires accounting specialists. 105. The five steps in the lean thinking model, in order are: a. 1) Define value, 2) Identify the pull factors, 3) Identify the value stream, 4) make the value stream flow, 5) revise until perfection is achieved. b. 1) Define value, 2) Identify the value stream, 3) make the value stream flow, 4) Implement a pull system, 5) Strive for perfection. c. 1) Identify unproductive activities that need to be reduced, 2) Identify push factors causing those unproductive activities, 3) develop operations so that the work flows smoothly, 4) strive for perfection, 5) Evaluate the value that has been added. d. 1) Identify push factors, 2) develop strategies to turn those factors into pull factors, 3) Assess the value added by steps one and two, 4) Strive for perfection, 5) Repeat the process on a regular basis. 106. Step one in the lean thinking model requires: a. Target costing, that is determining the acceptable cost the customer is willing to pay. b. An assessment of the potential value that can be added to the firm by adopting the lean manufacturing concept. c. Identifying processes that do not add value to the manufacturing process. d. Identifying push factors that can be converted to pull factors. 107. Step two in the lean thinking model: a. Deals with push and pull factors. b. is the central element in understanding how a company can evaluate what is value- added and what is waste. c Is always the most time consuming. e. Can be excluded if step one is done correctly. MULTIPLE CHOICE QUESTIONS 34. In which of the following categories do indirect materials belong? Product Cost Manufacturing Overhead Period Cost a. No No Yes b. Yes No No c. Yes Yes No d. Yes Yes Yes 35. Which one of the following is indirect labour considered? a. Product cost b. Nonmanufacturing cost c. Period cost d. Raw material cost 36. Which one of the following costs would be included in manufacturing overhead of a lawn mower manufacturer? a. The cost of the wheels b. The cost of the fuel lines that run from the motor to the gas tank c. Depreciation on the testing equipment d. The wages earned by motor assemblers 37. Which of the following would most likely be included in manufacturing overhead? a. Rent on the company’s store b. Insurance on a delivery truck c. Rent on the company’s factory d. an oil change on a delivery truck 38. For 2012, Sparkman Company has cost of goods manufactured of $500,000, beginning finished goods inventory of $25,000, and ending finished goods inventory of $20,000. How much is cost of goods sold? e. $505,000 f. $495,000 g. $545,000 h. $455,000 39. Which beginning and ending inventories appear on a cost of goods manufactured schedule? a. Raw materials only b. Raw materials and work in process only c. Raw materials, work in process, and finished goods d. Work in process only 40. Which of the following represents the correct order in which inventories are reported on a manufacturer’s balance sheet? a. Raw materials, work in process, finished goods b. Work in process, finished goods raw materials c. Finished goods, work in process, raw materials d. Work in process, raw materials, finished goods 41. Into which one of the following accounts would the work of factory employees, that can be physically and directly associated with converting raw materials into finished goods, be categorized? a. Direct labour b. Indirect labour c. Manufacturing overhead d. Indirect materials 42. Which one of the following would not be classified as manufacturing overhead? a. Indirect materials b. Insurance on factory building c. Indirect labour d. Direct materials