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| 1.
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An activity that provides financial and nonfinancial information to managers and other internal decision makers of an organization is called managerial accounting. |
| | A) | True |
| | B) | False |
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| 2.
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Planning is the process of monitoring planning decisions and evaluating an organization's activities and employees. |
| | A) | True |
| | B) | False |
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| 3.
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The purpose of using information provided by the accounting system is quite different for investors and creditors than it is for managers of the firm. |
| | A) | True |
| | B) | False |
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| 4.
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The emphasis of the focus of information generated through managerial accounting is on segments of the organization rather than the organization as a whole. |
| | A) | True |
| | B) | False |
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| 5.
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The information that management needs to plan and control operations is provided by the accounting system, and is under the rigid standards of GAAP. |
| | A) | True |
| | B) | False |
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| 6.
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The accounting system will provide managers with accurate and precise information for planning and decision making much faster than the information is provided to external users. |
| | A) | True |
| | B) | False |
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| 7.
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The financial information provided to external users focuses on the entity as a whole, whereas the financial information that is used by managerial accountants focuses on segments of the entity. |
| | A) | True |
| | B) | False |
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| 8.
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Manufacturers have only two classes of inventory; goods in process and finished goods. |
| | A) | True |
| | B) | False |
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| 9.
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The three basic elements of a manufactured product are direct materials, direct labour, and factory overhead. |
| | A) | True |
| | B) | False |
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| 10.
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The labour cost for janitors, supervisors, materials handlers, engineers, and maintenance personnel would be considered a direct labour cost. |
| | A) | True |
| | B) | False |
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| 11.
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Indirect labour, indirect materials, factory heat and light, factory property taxes, and amortization and insurance on production equipment would be classified as factory overhead. |
| | A) | True |
| | B) | False |
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| 12.
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The income statement for a manufacturer does not contain the line item 'Cost of Goods Sold'. |
| | A) | True |
| | B) | False |
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| 13.
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Costs can be classified by their behaviour, which is a useful tool in management accounting. |
| | A) | True |
| | B) | False |
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| 14.
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Cost can be classified as to traceability. |
| | A) | True |
| | B) | False |
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| 15.
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All costs are controllable. |
| | A) | True |
| | B) | False |
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| 16.
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Opportunity costs are irrelevant to future decisions. |
| | A) | True |
| | B) | False |
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| 17.
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Costs are capitalized if they produce benefits that are expected to have value in the future. |
| | A) | True |
| | B) | False |
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| 18.
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Costs that are involved in the manufacture of a product are called period costs. |
| | A) | True |
| | B) | False |
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| 19.
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Product costs can be incurred in one accounting period and recognized as a cost of a subsequent accounting period. |
| | A) | True |
| | B) | False |
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| 20.
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The concept of customer orientation calls for rigid product design and presentation of products the seller has already manufactured. |
| | A) | True |
| | B) | False |
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| 21.
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An attitude of constantly seeking ways to improve customer service, product quality, product features, the production process, and employee interactions is called customer orientation. |
| | A) | True |
| | B) | False |
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| 22.
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TQM (total quality management) focuses on the inspection of products to achieve efficiency and quality. |
| | A) | True |
| | B) | False |
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| 23.
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A company that uses TQM rewards employees who find defects. |
| | A) | True |
| | B) | False |
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| 24.
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Just-in-time (JIT) is an approach to managing inventories and production operations so that units of materials and products are obtained and provided only as they are needed. |
| | A) | True |
| | B) | False |
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| 25.
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In the traditional approach to inventory management, products are 'pushed' through the manufacturing process by the insertion of raw materials and the application of labour and overhead. |
| | A) | True |
| | B) | False |
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| 26.
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The theory of constraints is a management concept under which all managers and employees at all stages of company operations strive toward higher standards and a reduced number of defective units. |
| | A) | True |
| | B) | False |
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| 27.
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Continuous improvement is the added value a company brings to its finished products. |
| | A) | True |
| | B) | False |
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| 28.
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The sales price of a product less the total variable cost of the product is called contribution margin. |
| | A) | True |
| | B) | False |
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| 29.
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In addition to the historical information, managerial accounting is future-oriented, which includes predictions, estimates, planning, and control. |
| | A) | True |
| | B) | False |
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| 30.
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An out-of-pocket cost is also called a sunk cost, and is irrelevant to future decisions. |
| | A) | True |
| | B) | False |
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| 31.
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Manufacturing activities include two important components: materials activity (raw materials) and production activity (goods in process). |
| | A) | True |
| | B) | False |
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| 32.
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The difference between cost of goods sold in manufacturing versus merchandising companies is that manufacturing companies include raw material, direct labour, and overhead, while merchandising companies include only the purchase price of the merchandise. |
| | A) | True |
| | B) | False |
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| 33.
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The principles of calculating cost of goods sold are the same for the manufacturing and merchandising companies; therefore, there is no difference in the income statements presentation. |
| | A) | True |
| | B) | False |
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