Horngren’s Cost Accounting 17e – Test Bank by Srikant Datar & Madhav Rajan | Comprehensive Exam Preparation Material

Test Bank for Horngren's Cost Accounting 17e Srikant Datar, Madhav Rajan
Cost Accounting, 17e (Horngren/Datar/Rajan)
Chapter 1 The Accountant's Role in the Organization

Objective 1.1

1) Management accounting:
A) focuses on estimating future revenues, costs, and other measures to forecast activities and their
results
B) provides information about the company as a whole
C) reports information that has occurred in the past that is verifiable and reliable
D) provides information that is generally available only on a quarterly or annual basis
Answer: A
Diff: 2
Terms: treasury
Objective: 1
AACSB: Reflective thinking

2) Managers use management accounting information to strategy.
A) choose
B) communicate
C) implement
D) All of these answers are correct.
Answer: D
Diff: 1
Terms: total quality management (TQM)
Objective: 1
AACSB: Analytical skills

3) Financial accounting:
A) focuses on the future and includes activities such as preparing next year's operating budget
B) must comply with GAAP (generally accepted accounting principles)
C) reports include detailed information on the various operating segments of the business such as
product lines or departments
D) is prepared for the use of department heads and other employees
Answer: B
Diff: 2
Terms: financial accounting
Objective: 1
AACSB: Reflective thinking

,4) The person most likely to use ONLY financial accounting information is a:
A) factory shift supervisor
B) vice president of operations
C) current shareholder
D) department manager
Answer: C
Diff: 1
Terms: financial accounting
Objective: 1
AACSB: Analytical skills

5) Which of the following people is LEAST likely to use management accounting information?
A) the controller
B) a shareholder evaluating a stock investment
C) the treasurer
D) an assembly department supervisor
Answer: B
Diff: 1
Terms: treasury
Objective: 1
AACSB: Analytical skills

6) Financial accounting provides the primary source of information for:
A) decision making in the finishing department
B) improving customer service
C) preparing the income statement for shareholders
D) planning next year's operating budget
Answer: C
Diff: 2
Terms: financial accounting
Objective: 1
AACSB: Reflective thinking

7) Which of the following descriptors refers to management accounting information?
A) It is verifiable and reliable.
B) It is driven by rules.
C) It is prepared for shareholders.
D) It provides reasonable and timely estimates.
Answer: D
Diff: 2
Terms: treasury
Objective: 1
AACSB: Reflective thinking

,8) Which of the following statements refers to management accounting information?
A) There are no regulations governing the reports.
B) The reports are generally delayed and historical.
C) The audience tends to be stockholders, creditors, and tax authorities.
D) It primarily measures and records business transactions.
Answer: A
Diff: 2
Terms: treasury
Objective: 1
AACSB: Reflective thinking

9) Which of the following groups would be LEAST likely to receive detailed management accounting
reports?
A) stockholders
B) sales representatives
C) production supervisors
D) managers
Answer: A
Diff: 1
Terms: treasury
Objective: 1
AACSB: Analytical skills

10) Management accounting information includes:
A) tabulated results of customer satisfaction surveys
B) the cost of producing a product
C) the percentage of units produced that are defective
D) All of these answers are correct.
Answer: D
Diff: 1
Terms: treasury
Objective: 1
AACSB: Reflective thinking

11) Cost accounting:
A) provides information on the efficiency of factory labor
B) provides information on the cost of servicing commercial customers
C) provides information on the performance of an operating division
D) All of these answers are correct.
Answer: D
Diff: 1
Terms: cost accounting
Objective: 1
AACSB: Reflective thinking

, 12) Which of the following types of information are used in management accounting?
A) financial information
B) nonfinancial information
C) information focused on the long term
D) All of these answers are correct.
Answer: D
Diff: 2
Terms: treasury
Objective: 1
AACSB: Reflective thinking

13) Modern cost accounting plays a role in:
A) planning new products
B) evaluating operational processes
C) controlling costs
D) All of these answers are correct.
Answer: D
Diff: 1
Terms: cost accounting
Objective: 1
AACSB: Reflective thinking

14) A data warehouse or infobarn:
A) is reserved for exclusive use by the CFO
B) is primarily used for financial reporting purposes
C) stores information used by different managers for multiple purposes
D) gathers only nonfinancial information
Answer: C
Diff: 1
Terms: cost accounting
Objective: 1
AACSB: Reflective thinking

15) Cost accounting provides all of the following EXCEPT:
A) information for management accounting and financial accounting
B) pricing information from marketing studies
C) financial information regarding the cost of acquiring resources
D) nonfinancial information regarding the cost of operational efficiencies
Answer: B
Diff: 2
Terms: cost accounting
Objective: 1
AACSB: Reflective thinking