Chapter 1—Introduction to Cost Management
MULTIPLE CHOICE
1. In an accounting information system, which of the following is NOT a transformational
process?
a. collecting data
b. analyzing data
c. performance reporting
d. summarizing data
ANS: C PTS: 1 DIF: Medium OBJ: 1-1
NAT: AACSB Reflective
2. Which of the following is NOT a process associated with an accounting information system?
a. auditing existing data
b. collecting and recording data
c. providing information to users
d. analyzing and managing data
ANS: A PTS: 1 DIF: Moderate OBJ: 1-1
NAT: AACSB Reflective
3. In an accounting information system, the inputs are usually
a. financial statements.
b. analyzing data.
, c. performance reports.
d. economic events.
ANS: D PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Reflective
4. _______________ is devoted to providing information for external users.
a. Management accounting
b. Financial accounting
c. Internal accounting
d. Cost accounting
ANS: B PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Communication
5. Financial accounting information is used for
a. investment decisions.
b. regulatory measures.
c. stewardship evaluation.
d. all of these.
ANS: D PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Communication
,6. Which of the following is NOT part of the financial accounting information system?
a. filing reports with the SEC
b. reporting a large contingent liability to current and potential shareholders
c. determining the future cashflows of a proposed flexible manufacturing system
d. preparing GAAP financial statements
ANS: C PTS: 1 DIF: Meduim OBJ: 1-1
NAT: AACSB Reflective
7. Which of the following does NOT describe cost management system?
a. evaluation of segments or products within the firm
b. emphasis on the future
c. externally focused
d. focus on effective use of resources
ANS: C PTS: 1 DIF: Medium OBJ: 1-1
NAT: AACSB Reflective
8. Cost management reports are prepared
a. to meet the needs of decision makers within the firm.
b. whenever stockholders request them.
c. according to guidelines prepared by the Securities and Exchange Commission.
d. according to financial accounting standards.
ANS: A PTS: 1 DIF: Medium OBJ: 1-1
NAT: AACSB Communication
, 9. Which of the following is NOT provided by cost accountants?
a. cost information in accordance with GAAP
b. cost information about processes and activities
c. financial information for external users
d. cost information about products, customers, and services
ANS: C PTS: 1 DIF: Medium OBJ: 1-1
NAT: AACSB Reflective
10. The primary objective of the cost management informtion system is to provide
a. stockholders and potential investors with useful information for decision making.
b. banks and other creditors with information useful in making credit decisions.
c. management with information useful for planning and control of operations.
d. the Internal Revenue Service with information about taxable income.
ANS: C PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Reflective
11. The cost management information system is concerned with
a. reporting financial information according to GAAP.
b. providing cost information that is used in planning, control, and decision-making.
c. reporting to external users.
d. providing financial information to investors.
ANS: B PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Communication
MULTIPLE CHOICE
1. In an accounting information system, which of the following is NOT a transformational
process?
a. collecting data
b. analyzing data
c. performance reporting
d. summarizing data
ANS: C PTS: 1 DIF: Medium OBJ: 1-1
NAT: AACSB Reflective
2. Which of the following is NOT a process associated with an accounting information system?
a. auditing existing data
b. collecting and recording data
c. providing information to users
d. analyzing and managing data
ANS: A PTS: 1 DIF: Moderate OBJ: 1-1
NAT: AACSB Reflective
3. In an accounting information system, the inputs are usually
a. financial statements.
b. analyzing data.
, c. performance reports.
d. economic events.
ANS: D PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Reflective
4. _______________ is devoted to providing information for external users.
a. Management accounting
b. Financial accounting
c. Internal accounting
d. Cost accounting
ANS: B PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Communication
5. Financial accounting information is used for
a. investment decisions.
b. regulatory measures.
c. stewardship evaluation.
d. all of these.
ANS: D PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Communication
,6. Which of the following is NOT part of the financial accounting information system?
a. filing reports with the SEC
b. reporting a large contingent liability to current and potential shareholders
c. determining the future cashflows of a proposed flexible manufacturing system
d. preparing GAAP financial statements
ANS: C PTS: 1 DIF: Meduim OBJ: 1-1
NAT: AACSB Reflective
7. Which of the following does NOT describe cost management system?
a. evaluation of segments or products within the firm
b. emphasis on the future
c. externally focused
d. focus on effective use of resources
ANS: C PTS: 1 DIF: Medium OBJ: 1-1
NAT: AACSB Reflective
8. Cost management reports are prepared
a. to meet the needs of decision makers within the firm.
b. whenever stockholders request them.
c. according to guidelines prepared by the Securities and Exchange Commission.
d. according to financial accounting standards.
ANS: A PTS: 1 DIF: Medium OBJ: 1-1
NAT: AACSB Communication
, 9. Which of the following is NOT provided by cost accountants?
a. cost information in accordance with GAAP
b. cost information about processes and activities
c. financial information for external users
d. cost information about products, customers, and services
ANS: C PTS: 1 DIF: Medium OBJ: 1-1
NAT: AACSB Reflective
10. The primary objective of the cost management informtion system is to provide
a. stockholders and potential investors with useful information for decision making.
b. banks and other creditors with information useful in making credit decisions.
c. management with information useful for planning and control of operations.
d. the Internal Revenue Service with information about taxable income.
ANS: C PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Reflective
11. The cost management information system is concerned with
a. reporting financial information according to GAAP.
b. providing cost information that is used in planning, control, and decision-making.
c. reporting to external users.
d. providing financial information to investors.
ANS: B PTS: 1 DIF: Easy OBJ: 1-1
NAT: AACSB Communication
