TEST BANK
MANAGEMENT ACCTG. – 1
Mgt. Acctg. Environment
1. Management Accounting
A. Is governed by generally accepted accounting principles.
B. Draws from disciplines other than accounting
C. Is geared primarily to the past rather than future.
D. Places more emphasis on precision of data compared with financial accounting which does not place more emphasis
on accuracy of information.
2. Management accounting is an integral part of the management process. As such, it provides essential information for the
following objectives except
A. Maintaining the current level of resources utilization as well as internal and external communication.
B. Measuring and evaluating performances.
C. Planning strategies and controlling current activities of the organization.
D. Enhancing objectivity in decisionmaking.
3. The chief management accountant called “controller” traditionally performs these functions except
A. The establishment and implementation of the financial planning process.
B. Financial and management reporting and interpretation.
C. Protection of company resources and economic evaluation.
D. Relate to specific problems where expert help is required.
6. Management accountants help design, develop, install and maintain reporting systems which are
aligned with the structures of the organization. These systems provide information that are useful
for decision making. Management decision processes fall into three categories.
A. Repetitive, non programmed and strategic
B. Repetitive, programmed and strategic
C. Repetitive, non programmed and nonstrategic
D. Non repetitive, non programmed and strategic
7. In this element of internal control, the object is to gauge the efficiency of the various levels of people in the organization
as well as the quality and quantity of results.
A. Records and reports
B. Standards and performance.
C. Internal audit
D. Policies and procedures.
12. You are newly appointed as controller of ABC Corporation. Among the jobs your department would do, include the
following:
A. Cash receipts, cash disbursement, general accounting, taxation, financial statements analysis and internal auditing.
B. Financial reporting, strategic planning, managerial accounting, taxation, financial statement analysis and
internal accounting.
C. Financial accounting, managerial accounting, cost accounting, inventory accounting, Payroll accounting, tax
accounting, and sales forecasting.
D. Tax accounting, internal accounting, internal auditing, general accounting.
15. Which of the following characteristics does not relate to management accounting?
A. Accounting reports may include nonmonetary information.
B. It is subject to restrictions imposed by GAAP.
C. Reports are often based on estimates and are seldom useful for everything other than the purpose for which they are
prepared.
D. It provides data for external users within the business organizations.
, 22. The activities in a management system’s control process can be grouped into four:
1. Measurement of actual performance
2. Deciding and implementing corrective action.
3. Determining standards of performance.
4. Comparing actual performance versus standards and analyzing results.
The above steps must be done in this sequence:
A. 4,3,2,1
B. 3,1,4,2
C. 1,3,4,2
D. 3,4,1,2
23. The concept of “management by exception” refers to management’s
A. Consideration of only those items which vary materially from plans.
B. Consideration of only rare events.
C. Consideration of items selected random.
D. Events that involve material amount.
28. A type of managerial accounting that refers to the determination of the cost of products and services regardless of
whether they are variable or nonvariable is known as
A. Differential accounting
B. Activity accounting
C. Full cost accounting
D. Responsibility accounting
29. A type of managerial accounting that refers to the determination of the operating cost regardless of cost behavior is
A. Differential accounting
B. Full cost accounting
C. Responsibility accounting
D. Profitability accounting
COSTS CONCEPTS, CLASSIFICATION AND SEGREGATION
1. The term relevant cost applies to all the following decision situations except the
A. Acceptance of a special order.
B. Determination of a product price.
C. Replacement of equipment.
D. Addition or deletion of a product line.
2. A decisionmaking concept, described as “the contribution to income that is foregone by not using a limited source for its
best alternative use.” is called
A. Marginal Cost
B. Incremental Cost
C. Potential Cost
D. Opportunity Cost
5.The term that refers to costs incurred in the past that are not relevant to a future decision is
A. Full absorption costing
B. Underallocated indirect cost
C. Sunk cost
D. Incurred marginal cost
MANAGEMENT ACCTG. – 1
Mgt. Acctg. Environment
1. Management Accounting
A. Is governed by generally accepted accounting principles.
B. Draws from disciplines other than accounting
C. Is geared primarily to the past rather than future.
D. Places more emphasis on precision of data compared with financial accounting which does not place more emphasis
on accuracy of information.
2. Management accounting is an integral part of the management process. As such, it provides essential information for the
following objectives except
A. Maintaining the current level of resources utilization as well as internal and external communication.
B. Measuring and evaluating performances.
C. Planning strategies and controlling current activities of the organization.
D. Enhancing objectivity in decisionmaking.
3. The chief management accountant called “controller” traditionally performs these functions except
A. The establishment and implementation of the financial planning process.
B. Financial and management reporting and interpretation.
C. Protection of company resources and economic evaluation.
D. Relate to specific problems where expert help is required.
6. Management accountants help design, develop, install and maintain reporting systems which are
aligned with the structures of the organization. These systems provide information that are useful
for decision making. Management decision processes fall into three categories.
A. Repetitive, non programmed and strategic
B. Repetitive, programmed and strategic
C. Repetitive, non programmed and nonstrategic
D. Non repetitive, non programmed and strategic
7. In this element of internal control, the object is to gauge the efficiency of the various levels of people in the organization
as well as the quality and quantity of results.
A. Records and reports
B. Standards and performance.
C. Internal audit
D. Policies and procedures.
12. You are newly appointed as controller of ABC Corporation. Among the jobs your department would do, include the
following:
A. Cash receipts, cash disbursement, general accounting, taxation, financial statements analysis and internal auditing.
B. Financial reporting, strategic planning, managerial accounting, taxation, financial statement analysis and
internal accounting.
C. Financial accounting, managerial accounting, cost accounting, inventory accounting, Payroll accounting, tax
accounting, and sales forecasting.
D. Tax accounting, internal accounting, internal auditing, general accounting.
15. Which of the following characteristics does not relate to management accounting?
A. Accounting reports may include nonmonetary information.
B. It is subject to restrictions imposed by GAAP.
C. Reports are often based on estimates and are seldom useful for everything other than the purpose for which they are
prepared.
D. It provides data for external users within the business organizations.
, 22. The activities in a management system’s control process can be grouped into four:
1. Measurement of actual performance
2. Deciding and implementing corrective action.
3. Determining standards of performance.
4. Comparing actual performance versus standards and analyzing results.
The above steps must be done in this sequence:
A. 4,3,2,1
B. 3,1,4,2
C. 1,3,4,2
D. 3,4,1,2
23. The concept of “management by exception” refers to management’s
A. Consideration of only those items which vary materially from plans.
B. Consideration of only rare events.
C. Consideration of items selected random.
D. Events that involve material amount.
28. A type of managerial accounting that refers to the determination of the cost of products and services regardless of
whether they are variable or nonvariable is known as
A. Differential accounting
B. Activity accounting
C. Full cost accounting
D. Responsibility accounting
29. A type of managerial accounting that refers to the determination of the operating cost regardless of cost behavior is
A. Differential accounting
B. Full cost accounting
C. Responsibility accounting
D. Profitability accounting
COSTS CONCEPTS, CLASSIFICATION AND SEGREGATION
1. The term relevant cost applies to all the following decision situations except the
A. Acceptance of a special order.
B. Determination of a product price.
C. Replacement of equipment.
D. Addition or deletion of a product line.
2. A decisionmaking concept, described as “the contribution to income that is foregone by not using a limited source for its
best alternative use.” is called
A. Marginal Cost
B. Incremental Cost
C. Potential Cost
D. Opportunity Cost
5.The term that refers to costs incurred in the past that are not relevant to a future decision is
A. Full absorption costing
B. Underallocated indirect cost
C. Sunk cost
D. Incurred marginal cost
