Managerial Accounting Exam 1 Study
Guide
Ch. 1
(T/F):
1. Managers' 3 primary responsibilities are planning, directing, controlling
2. Management accounting is geared toward external stakeholders, such as investors
and creditors
3. Management accountants often work in cross-functional teams throughout the
organization
4. The internal audit function reports to the audit committee of the board of directors
5. Management accountants are now more often looked upon as internal business
advisors, rather than "bean counters" recording historical transactions
6. Management accountants should be technically proficient, but they don't need strong
oral and written communication skills
7. Management accountants should be proficient in Excel
8. The AICPA issues the CMA certification
9. The SOX act of 2002 imposes stricter requirements over financial reporting and
internal controls and stricter consequences for those who engage in financial statement
misconduct and other - ANSWER...-1. T
2. F
3. T
4. T
5. T
6. F
7. T
8. F
9. T
10. F
11. T
12. T
13. F
14. F
15. F
16. T
Ch. 1
Match each statement to the management responsibility being fulfilled (Planning,
Decision Making, Directing, or Controlling)
1. Identifying alternative courses of action and choosing among them
2. Running the company on a day-to-day basis
,3. Determining whether the company's units are operating according to plan
4. Setting goals and objectives for the company and determining strategies to achieve
them - ANSWER...-1. Decision Making
2. Directing
3. Controlling
4. Planning
Ch. 1
Are the statements below more descriptive of managerial or financial accounting
information?
1. Describes historical transactions with external parties
2. Is not required by any authoritative body, such as the SEC
3. Reports on the company's subunits, such as products, geographical areas, and
departments
4. Is intended to be used by creditors and investors
5. Is formatted in accordance with GAAP - ANSWER...-1. Financial
2. Managerial
3. Managerial
4. Financial
5. Financial
Ch. 1
Match each statement to the standard of ethical professional practice being fulfilled
(Competence, Confidentiality, Integrity, Credibility). Each standard may be used more
than once or not at all.
1. Do no disclose company information unless authorized to do so
2. Continue to develop skills and knowledge
3. Don't bias the information and reports presented to management
4. If you do not have the skills to complete a task correctly, do not pretend you do
5. Avoid actual and apparent conflicts of interest - ANSWER...-1. Confidentiality
2. Competence
3. Credibility
4. Competence
5. Integrity
Ch. 1
EagleRider Motorcycles is considering whether to expand into Germany. If gas prices
increase, the company expects more interest in fuel-efficient transportation such as
motorcycles. As a result, the company is considering setting up a motorcycle assembly
plant on the outskirts of Berlin.
They estimate it will cost $930,000 to convert an existing building to motorcycle
production. Working will need training, at a total cost of $75,000. The additional costs to
organize the business and to establish relationships is estimated to be $180,000. The
CEO believes the company can earn profits from this expansion (before considering
costs) of $1,756,000.
, Use cost-benefit analysis to determine whether Eagle-Rider should expand into
Germany. - ANSWER...-Expected Benefits:
- Expect Profits from Increase in Sales: $1,756,000
Expected Costs:
- Conversion of Building: ($930,000)
- Workforce Training: ($75,000)
- Organizing and Establishing Relationships: ($180,000)
Total Expected Costs = ($1,185,000)
Net Expected Benefit = $571,000
Ch. 1
Which of the following management responsibilities often involves evaluating the results
of operations against the budget?
- Directing
- Planning
- Controlling
- None of the above - ANSWER...-Controlling
Ch. 1
Managerial accounting differs from financial accounting in that it:
- Emphasizes data relevance over data objectivity
- Is required by GGAP
- Tends to report on the company as a whole rather than segments of the company
- Is used primarily by external decision makers - ANSWER...-Emphasizes data
relevance over data objectivity
Ch. 1
Which of the following corporate positions is responsible for general financial
accounting, managerial accounting, and tax reporting?
- Treasurer
- Controller
- Chief Operating Officer (COO)
- Internal Audit - ANSWER...-Controller
Ch. 1
Of the following skills, which are needed by today's management accountants?
- Decision analysis
- Strategic thinking
- Cost management
- All of the above - ANSWER...-All of the above
Ch. 1
Which of the following organizations is the professional association specifically for
management accountings?
- FASB
Guide
Ch. 1
(T/F):
1. Managers' 3 primary responsibilities are planning, directing, controlling
2. Management accounting is geared toward external stakeholders, such as investors
and creditors
3. Management accountants often work in cross-functional teams throughout the
organization
4. The internal audit function reports to the audit committee of the board of directors
5. Management accountants are now more often looked upon as internal business
advisors, rather than "bean counters" recording historical transactions
6. Management accountants should be technically proficient, but they don't need strong
oral and written communication skills
7. Management accountants should be proficient in Excel
8. The AICPA issues the CMA certification
9. The SOX act of 2002 imposes stricter requirements over financial reporting and
internal controls and stricter consequences for those who engage in financial statement
misconduct and other - ANSWER...-1. T
2. F
3. T
4. T
5. T
6. F
7. T
8. F
9. T
10. F
11. T
12. T
13. F
14. F
15. F
16. T
Ch. 1
Match each statement to the management responsibility being fulfilled (Planning,
Decision Making, Directing, or Controlling)
1. Identifying alternative courses of action and choosing among them
2. Running the company on a day-to-day basis
,3. Determining whether the company's units are operating according to plan
4. Setting goals and objectives for the company and determining strategies to achieve
them - ANSWER...-1. Decision Making
2. Directing
3. Controlling
4. Planning
Ch. 1
Are the statements below more descriptive of managerial or financial accounting
information?
1. Describes historical transactions with external parties
2. Is not required by any authoritative body, such as the SEC
3. Reports on the company's subunits, such as products, geographical areas, and
departments
4. Is intended to be used by creditors and investors
5. Is formatted in accordance with GAAP - ANSWER...-1. Financial
2. Managerial
3. Managerial
4. Financial
5. Financial
Ch. 1
Match each statement to the standard of ethical professional practice being fulfilled
(Competence, Confidentiality, Integrity, Credibility). Each standard may be used more
than once or not at all.
1. Do no disclose company information unless authorized to do so
2. Continue to develop skills and knowledge
3. Don't bias the information and reports presented to management
4. If you do not have the skills to complete a task correctly, do not pretend you do
5. Avoid actual and apparent conflicts of interest - ANSWER...-1. Confidentiality
2. Competence
3. Credibility
4. Competence
5. Integrity
Ch. 1
EagleRider Motorcycles is considering whether to expand into Germany. If gas prices
increase, the company expects more interest in fuel-efficient transportation such as
motorcycles. As a result, the company is considering setting up a motorcycle assembly
plant on the outskirts of Berlin.
They estimate it will cost $930,000 to convert an existing building to motorcycle
production. Working will need training, at a total cost of $75,000. The additional costs to
organize the business and to establish relationships is estimated to be $180,000. The
CEO believes the company can earn profits from this expansion (before considering
costs) of $1,756,000.
, Use cost-benefit analysis to determine whether Eagle-Rider should expand into
Germany. - ANSWER...-Expected Benefits:
- Expect Profits from Increase in Sales: $1,756,000
Expected Costs:
- Conversion of Building: ($930,000)
- Workforce Training: ($75,000)
- Organizing and Establishing Relationships: ($180,000)
Total Expected Costs = ($1,185,000)
Net Expected Benefit = $571,000
Ch. 1
Which of the following management responsibilities often involves evaluating the results
of operations against the budget?
- Directing
- Planning
- Controlling
- None of the above - ANSWER...-Controlling
Ch. 1
Managerial accounting differs from financial accounting in that it:
- Emphasizes data relevance over data objectivity
- Is required by GGAP
- Tends to report on the company as a whole rather than segments of the company
- Is used primarily by external decision makers - ANSWER...-Emphasizes data
relevance over data objectivity
Ch. 1
Which of the following corporate positions is responsible for general financial
accounting, managerial accounting, and tax reporting?
- Treasurer
- Controller
- Chief Operating Officer (COO)
- Internal Audit - ANSWER...-Controller
Ch. 1
Of the following skills, which are needed by today's management accountants?
- Decision analysis
- Strategic thinking
- Cost management
- All of the above - ANSWER...-All of the above
Ch. 1
Which of the following organizations is the professional association specifically for
management accountings?
- FASB
