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Cornerstones of Managerial Accounting 2nd Edition Test Bank

Cornerstones of Managerial Accounting 2nd Edition Test Bank is a must-have study companion, ensuring that you grasp important topics with ease.

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    i NETA A SSESSMENT Test Bank to accompany Prepared by Linda Lindsay University of Lethbridge

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    ii NETA Assessment: Test Bank to accompany Cornerstones of Managerial Accounting, Second Canadian Edition By Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger, David J. McConomy, and Jeffrey A. Pittman Test Bank prepared by Linda Lindsay, University of Lethbridge NETA copy editor: NETA editor: Kate Unrau Available at www.nelson.com and www.nelsonbrain.com COPYRIGHT © 2015 by Nelson Education Ltd. Nelson is a registered trademark used herein under licence. All rights reserved. For more information contact Nelson, 1120 Birchmount Road, Toronto, Ontario M1K 5G4. Or you can visit our Internet site at www.nelson.com. ALL RIGHTS RESERVED. No part of this work covered by the copyright hereon may be reproduced or used in any form or by any means — graphic, electronic, or mechanical, including photocopying, recording, taping, web distribution or information storage and retrieval systems — without the written permission of the publisher

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    iii TABLE OF CONTENTS Preface ................................ ................................ ................................ ................................ iv Chapter 1: ................................ ................................ ................................ ......................... 1 - 1 Chapter 2: ................................ ................................ ................................ ......................... 3 - 1 Chapter 4: ................................ ................................ ................................ ......................... 4 - 1 Chapter 5: ................................ ................................ ................................ ......................... 5 - 1 Chapter 6: ................................ ................................ ................................ ......................... 6 - 1 Chapter 7: ................................ ................................ ................................ ......................... 7 - 1 Chapter 8: ................................ ................................ ................................ ......................... 8 - 1 Chapter 9: ................................ ................................ ................................ ......................... 9 - 1 Chapter 10: ................................ ................................ ................................ ..................... 10 - 1 Chapter 11: ................................ ................................ ................................ ..................... 11 - 1 Chapter 12: ................................ ................................ ................................ ..................... 12 - 1 Chapter 13: ................................ ................................ ................................ ..................... 13 - 1 Chapter 14: ................................ ................................ ................................ ..................... 14 - 1

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    iv PREFACE Contents: About the Nelson Education Teaching Advantage Accessing Your Cognero Test Bank ABOUT THE NELSON EDUCATION TEACHING ADVANTAGE (NETA) In most post - secondary courses , a large percentage of student assessment is based on multiple - choice testing. M any instructors use multiple - choice reluctantly, believing that it is a met hodology best used for testing what a student remembers rather than what she or he has learned . Nelson Education Ltd. understands that a good quality multiple - choice test bank can provide the means to measure higher - level thinking skills as well as recall . Recognizing the importance of multiple - choice testing in today’s classroom, we have created NETA — the N elson E ducation T e aching A dvantage program — to ensure the value of our high quality test banks. The NETA program was created in partnership with David DiBattista , a 3M National Teaching Fello w, professor of psychology at Brock University , and researcher in the area of multiple - choice testing . NETA ensures that subject - matter experts who author test banks have had training in two areas: avoiding common errors in test construction, and developing multiple - choice test questions that “get beyond remembering” to assess higher - level thinking. All NETA test banks include David DiBattista’s guide for instructors, “Multiple Choice Tests: Getting Beyond Remembering.” This guide has been designed to assist you in using Nelson test banks to achieve your desired outcomes in your course . The Test Bank for Mowen, Cornerstones of Managerial Accounting, Second Canadian Edition, has been revised for Canadian students by Linda Lindsay, University of Lethbridge. The multiple - choice questions were written and edited to conform to NETA guidelines, which emphasize the development of higher - order thinking and the effective construction of questions. NETA principles of question construction help eliminate ambiguity, arguable answers, guesswork, and unconscious cues to test - savvy students, resulting in a test that accurately reflects student understanding. The Test Bank offers o ver multiple choice, about [insert number] true/false, and problems.

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    v In addition to providing a variety of questions related to each chapter objective, this test bank also employs a series of tags that can help design effective, balanced tests by the measure of course outcomes. All of the tags are included with the question in the test bank. These tags include: • ANS: The correct answer. • PTS: The number of points an instructor can assign for each question. The default is 1 point. • Keywords: Bloom’s Category: The category from Bloom’s taxonomy for learning (Remember or Higher Order). This category is included to assist instructors in assessing student’s higher - order cognitive skills. • DIF: D ifficulty level ( Easy, Medium , or Difficult). • REF: The page number in the textbook that the question relates to. • ACCESSING YOUR COGNERO TEST BANK The NETA Test Bank is available in a new, cloud - based platform. Nelson Testing Powered by Cognero® is a secure online testing system that allows you to author, edit, and manage test bank content from any place you have Internet access. No special installations or downloads are needed, and the desktop - inspired interface, with its drop - down menus and familiar, intuitive tools, allows you to create and manage tests with ease. You can create multiple test versions in an instant, and import or export content into other systems. Tests can be delivered from your learning management system, your classroom, or wherever you want. Testing Powered by Cognero can be accessed through http://www.nelson.com/login and http://login.cengage.com . Just enter the Author, Title, ISBN, or Course Key for the text and select “Nelson Testing, powered by Cognero Instant Access for [ name of author/title ].” Additional Resources The Instructor Resources for your textbook also include: • CL Testing_Cognero_Creating_Tests , a user’s guide to answer your questions. • Printable versions of the Test Bank in Word and PDF formats . Troubleshooting If you are having difficulty adding questions to your tests using Cognero, this short video has a helpful demonstration of several ways to accomplish this: https://www.youtube.com/watch?v=EWugxqtChmY If you have added a book to your Instructor Resource Center dashboard and can’t find the Cognero Test Bank under “Access Instructor Resources,” try reloading the product by adding the ISBN in the box “Add a product to your Instructor Resource Center.”

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    vi For optimum effectiveness, use Google Chrome as your browser when accessing Cognero. Technical support is available at http://support.cengage.com/magellanweb/TechSupport/login.aspx

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    Copyright © 2015 Nelson Education Limited. 1 - 1 Chapter 1 - Introduction to Managerial Accounting 1. Which of the following is an example of the management activity referred to as planning? a. developing a strategy to dispose of hazardous waste b. deciding to eliminate an unprofitable segment of an organization c. outsourcing the organization’s payroll processing d. upgrading outdated equipment ANSWER: a POINTS: 1 DIFFICULTY: Medium REFERENCES: p.4 LEARNING OBJECTIVES: MACC.MOWE.15.1.1 - 1.1 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; classifying 2. Developing a company strategy for responding to anticipated new markets is an example of which of the following? a. delegating b. controlling c. decision making d. planning ANSWER: d POINTS: 1 DIFFICULTY: Medium REFERENCES: p.5 LEARNING OBJECTIVES: MACC.MOWE.15.1.1 - 1.1 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; classifying 3. Investigating production variances and adjusting the production process is an example of which of the following? a. planning b. controlling c. decision making d. delegating ANSWER: b POINTS: 1 DIFFICULTY: Medium REFERENCES: p.5 LEARNING OBJECTIVES: MACC.MOWE.15.1.1 - 1.1 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; classifying 4. Which of the following are included in the standards of ethical conduct for management accountants? a. competence, performance, respect for others, and observance

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    Chapter 1 - Introduction to Managerial Accounting Copyright © 2015 Nelson Education Limited. 1 - 2 b. integrity, respect for others, performance, and confidence c. confidence, confidentiality, objectivity, and observance d. competence, confidentiality, integrity, and objectivity ANSWER: d POINTS: 1 DIFFICULTY: Medium REFERENCES: p.5 LEARNING OBJECTIVES: MACC.MOWE.15.1.1 - 1.1 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; classifying 5. Which of the following is a characteristic of financial accounting? a. It has no regulatory or mandatory rules. b. It is internally focused. c. It is concerned with the firm as a whole. d. It has an emphasis on the future. ANSWER: c POINTS: 1 DIFFICULTY: Medium REFERENCES: p.7 LEARNING OBJECTIVES: MACC.MOWE.15.1.2 - 1.2 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; classifying 6. Which of the following is an objective of management accounting? a. to prepare external reports for investors, creditors, government agencies, and other outside users b. to provide information for the costing of services, products, and other objects of interest to management c. to provide tax information for planning, controlling, evaluating, and continuous improvement d. to provide information for investment decision making ANSWER: b POINTS: 1 DIFFICULTY: Easy REFERENCES: p.7 LEARNING OBJECTIVES: MACC.MOWE.15.1.3 - 1.3 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; exemplifying 7. Which of the following is a characteristic of management accounting? a. It provides objective financial information. b. It must adhere to mandatory rules. c. It has no mandatory rules.

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    Chapter 1 - Introduction to Managerial Accounting Copyright © 2015 Nelson Education Limited. 1 - 3 d. Its main users are outside of the organization. ANSWER: c POINTS: 1 DIFFICULTY: Easy REFERENCES: p.7 LEARNING OBJECTIVES: MACC.MOWE.15.1.2 - 1.2 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; classifying 8. What is characteristic of management accounting reports? a. The reports are prepared to meet the needs of decision makers within the firm. b. The reports are prepared whenever stockholders request them. c. The reports are prepared according to guidelines prepared by the Ontario Securities Commission (OSC). d. The reports are prepared according to IFRS. ANSWER: a POINTS: 1 DIFFICULTY: Easy REFERENCES: p. 7 LEARNING OBJECTIVES: MACC.MOWE.15.1.2 - 1.2 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; inferring 9. What is the primary objective of management accounting? a. to provide stockholders and potential investors with useful information for decision making b. to provide banks and other creditors with information useful in making credit decisions c. to provide management with information useful for planning and control of operations d. to provide the Canada Revenue Agency with information about taxable income ANSWER: c POINTS: 1 DIFFICULTY: Medium REFERENCES: p.7 LEARNING OBJECTIVES: MACC.MOWE.15.1.3 - 1.3 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; exemplifying 10. What are the establishing objectives to include social and environmental impact called? a. triple accounting b. triple bottom line c. triple cost analysis d. triple threat ANSWER: b

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    Chapter 1 - Introduction to Managerial Accounting Copyright © 2015 Nelson Education Limited. 1 - 4 POINTS: 1 DIFFICULTY: Medium REFERENCES: p.8 LEARNING OBJECTIVES: MACC.MOWE.15.1.2 - 1.2 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; differentiating 11. What does the Triple Bottom Line include? a. measures of revenues generated by the company b. measures of activities not simply related to increasing profits c. measures of activities related to the costs incurred by the company d. measures of activities related to increasing profits ANSWER: b POINTS: 1 DIFFICULTY: Medium REFERENCES: p.8 LEARNING OBJECTIVES: MACC.MOWE.15.1.2 - 1.2 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; differentiating 12. What activity would not be included in the Triple Bottom Line? a. measures of the number of volunteer hours by employees b. measures of the litres of waste water dumping into a river c. measures of the environmental impact of a pipeline d. measures of revenues minus expenses generated ANSWER: d POINTS: 1 DIFFICULTY: Medium REFERENCES: p.8 LEARNING OBJECTIVES: MACC.MOWE.15.1.2 - 1.2 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; differentiating 13. Which of the following is a characteristic of activity - based costing? a. It is a traditional costing method. b. It encourages process - value analysis. c. It always results in a lower cost assigned to goods or services. d. It assigns shared costs to jobs. ANSWER: b POINTS: 1 DIFFICULTY: Medium

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    Chapter 1 - Introduction to Managerial Accounting Copyright © 2015 Nelson Education Limited. 1 - 5 REFERENCES: p.9 LEARNING OBJECTIVES: MACC.MOWE.15.1.3 - 1.3 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; classifying 14. What is the objective of process value analysis? a. to include measures of activities not simply related to increasing profits b. to establish competitive advantage by creating better customer value for the same cost c. to efficiently perform necessary and eliminate activities that do not create customer value d. to improve costing accuracy by emphasizing the activities and tasks that must be performed ANSWER: c POINTS: 1 DIFFICULTY: Medium REFERENCES: p.9 LEARNING OBJECTIVES: MACC.MOWE.15.1.3 - 1.3 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; differentiating 15. What is customer value? a. the difference between what a customer receives and what the customer gives up when buying a product or service b. the establishment of a competitive advantage by creating better customer value for the same cost c. the efficient performance of necessary activities and elimination of activities that do not create customer value d. the improvement of costing accuracy by emphasizing the activities and tasks that must be performed ANSWER: a POINTS: 1 DIFFICULTY: Medium REFERENCES: p. 9 LEARNING OBJECTIVES: MACC.MOWE.15.1.3 - 1.3 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; attributing 16. What does total quality management emphasize? a. 1% defects b. a lack of improvement c. the elimination of waste d. the status quo ANSWER: c POINTS: 1 DIFFICULTY: Medium REFERENCES: p.13

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    Chapter 1 - Introduction to Managerial Accounting Copyright © 2015 Nelson Education Limited. 1 - 6 LEARNING OBJECTIVES: MACC.MOWE.15.1.3 - 1.3 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order, differentiating 17. What is a primary activity in the value chain? a. procurement b. marketing and sales c. human resources management d. technology development A pr ANSWER: b POINTS: 1 DIFFICULTY: Medium REFERENCES: p.13 LEARNING OBJECTIVES: MACC.MOWE.15.1.3 - 1.3 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; differentiating 18. Which of the following employees would normally occupy a line position? a. the controller b. the purchasing manager c. the treasurer d. the vice - president of marketing ANSWER: d POINTS: 1 DIFFICULTY: Medium REFERENCES: p. 16 LEARNING OBJECTIVES: MACC.MOWE.15.1.4 - 1.4 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; differentiating 19. Which of the following employees would normally occupy a staff position? a. the cost accounting manager b. an assembly worker c. the factory manager d. the vice president of operations ANSWER: a POINTS: 1 DIFFICULTY: Medium REFERENCES: p. 16 LEARNING OBJECTIVES: MACC.MOWE.15.1.4 - 1.4 NATIONAL STANDARDS: United States - AACSB Analytic

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    Chapter 1 - Introduction to Managerial Accounting Copyright © 2015 Nelson Education Limited. 1 - 7 United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; differentiating 20. Which of the following employees would normally occupy a line position in a hospital? a. the manager of the cafeteria b. a hospital administrator c. the chief of surgery d. a staff nurse ANSWER: c POINTS: 1 DIFFICULTY: Medium REFERENCES: p. 16 LEARNING OBJECTIVES: MACC.MOWE.15.1.4 - 1.4 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; differentiating 21. Which of the following activities does the controller of an organization participate in? a. controlling, planning, and assessing b. decision making and assessing c. planning, assessing, and decision making d. planning, controlling, and decision making ANSWER: d POINTS: 1 DIFFICULTY: Easy REFERENCES: p. 16 LEARNING OBJECTIVES: MACC.MOWE.15.1.4 - 1.4 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; exemplifying 22. Which of the following involves choosing actions that are right, proper, and just? a. balanced costing b. activity - based costing c. ethical behaviour d. cross - functional perspective ANSWER: c POINTS: 1 DIFFICULTY: Challenging REFERENCES: p. 18 LEARNING OBJECTIVES: MACC.MOWE.15.1.5 - 1.5 NATIONAL STANDARDS: United States - AACSB Ethics United States - IMA - Business Applications KEYWORDS: Bloom's Higher order; differentiating

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    Chapter 1 - Introduction to Managerial Accounting Copyright © 2015 Nelson Education Limited. 1 - 8 23. With which of the following do virtually all managerial accounting practices assist managers? a. maximizing profits b. determining costs c. creating annual reports d. generating tax reports ANSWER: a POINTS: 1 DIFFICULTY: Medium REFERENCES: p.17 LEARNING OBJECTIVES: MACC.MOWE.15.1.5 - 1.5 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; differentiating 24. What is a requirement for accountants who have a CPA, (CA, CMA, or CGA) designation? a. They are not the only people permitted to serve as external auditors. b. They must pass a national examination and be licensed by the province or territory in which they practice. c. They are not held responsible for providing assurance concerning the reliability of a firm's financial statements. d. They can only work at public accounting firms. ANSWER: b POINTS: 1 DIFFICULTY: Easy REFERENCES: p.23 LEARNING OBJECTIVES: MACC.MOWE.15.1.6 - 1.6 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Reporting KEYWORDS: Bloom's Higher order; attributing 25. What is the name of the newly formed professional accounting body? a. CA Canada b. CFA Canada c. CPA Canada d. CMA Canada ANSWER: c POINTS: 1 DIFFICULTY: Easy REFERENCES: p. 23 LEARNING OBJECTIVES: MACC.MOWE.15.1.6 - 1.6 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management KEYWORDS: Bloom's Higher order; differentiating

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    Chapter 1 - Introduction to Managerial Accounting Copyright © 2015 Nelson Education Limited. 1 - 9 26. Managerial accounting is designed primarily for external users. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy REFERENCES: p.4 LEARNING OBJECTIVES: MACC.MOWE.15.1.1 - 1.1 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management 27. Management accounting information is important for both for - profit and not - for - profit organizations. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Medium REFERENCES: p. 4 LEARNING OBJECTIVES: MACC.MOWE.15.1.1 - 1.1 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management 28. The managerial activity of monitoring a plan’s implementation and taking corrective action as needed is referred to as decision making. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Medium REFERENCES: p. 5 LEARNING OBJECTIVES: MACC.MOWE.15.1.1 - 1.1 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management 29. The process of choosing among competing alternatives is decision making. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Medium REFERENCES: p.5 LEARNING OBJECTIVES: MACC.MOWE.15.1.1 - 1.1 NATIONAL STANDARDS: United States - AACSB Analytic United States - IMA - Cost Management

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