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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank

Get exam-ready with Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank, a well-structured guide featuring topic-wise explanations and practice exercises.

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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank - Page 1 preview imageExamName___________________________________MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.1)The implementation phase includes all of these activities EXCEPT:1)A)solve on-the-spot problemsB)assign tasks to employeesC)making Short-term and Long-term decisions.D)selecting a course of action.Answer:DExplanation:A)B)C)D)2)Which of the following statements is not true?2)A)Financial accounting presents a historical perspective of business activities.B)Financial accounting and managerial accounting are independent of each other.C)Managerial accounting has a strong orientation towards the future.D)Financial accounting, due to the requirements of regulation, is mandatory forbusinesses.Answer:BExplanation:A)B)C)D)3)Companies using the just-in-time (JIT) approach hope to achieve:3)A)reduction of costs associated with setup by producing in large batches.B)reduced defect rates, resulting in less waste and greater customer satisfaction.C)gains in production flexibility.D)the hiring of specialized workers to increase production.Answer:BExplanation:A)B)C)D)1
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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank - Page 2 preview image
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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank - Page 3 preview image4)In order to eliminate waste, companies must adopt and implement one or moremanagement practices that focus on different aspects of the lean business model such as:4)A)maintaining inventories large enough to shield against all unanticipated disruptions.B)Just-in-Time.C)Activity-Based Costing.D)multi-dimensional performance measurement systems.Answer:BExplanation:A)B)C)D)5)Managerial accounting is regulated by:5)A)IFRS.B)ASPE.C)GAAP.D)no prescribed standards are followed.Answer:DExplanation:A)B)C)D)6)Corporate governance:6)A)if effective, should enhance stakeholders' confidence that the organization is beingmanaged in their best interests.B)ensures the personal interests of top management are fully achieved.C)is only important to non-publicly traded companies.D)is a department within Canada Revenue with a mandate to ensure all corporationsfile annual tax returns.Answer:AExplanation:A)B)C)D)7)Which of the following is NOT included in Codes of Ethics for professionalaccountants?7)A)Professional competenceB)CompensationC)ObjectivityD)ConfidentialityAnswer:BExplanation:A)B)C)D)2
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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank - Page 4 preview image8)Activities that do not add value to a product or service that customers are willing to payfor are considered to be:8)A)normal business activities.B)a constraint.C)part of the overhead costs of a business.D)non-value-added activities.Answer:DExplanation:A)B)C)D)9)Benchmarking begins with:9)A)studying organizations that are the best at a particular task.B)completely redesigning a business process to improve it.C)a determination to only build products to meet specific customer orders.D)determining the constraints within a given manufacturing process.Answer:AExplanation:A)B)C)D)10)What is the professional designation for the majority of professional accountants inCanada?10)A)Chartered Management AccountantsB)Certified Public AccountantsC)Chartered Professional AccountantsD)Chartered Certified AccountantsAnswer:CExplanation:A)B)C)D)11)Which of the following is NOT a benefit of a just-in-time (JIT) system?11)A)The time required to fill an order is reduced, resulting in quicker response tocustomers and consequentially greater potential sales.B)Funds that have been tied up in inventories can be used elsewhere.C)Production workers are always busy.D)Areas previously used to store inventories are made available for other moreproductive uses.Answer:CExplanation:A)B)C)D)3
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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank - Page 5 preview image12)A cost report which focuses on a 10% reduction of costs in the upcoming period is anexample of:12)A)a company's objectives.B)a company's missionC)a company's strategyD)a company's visionAnswer:DExplanation:A)B)C)D)13)A manufacturing business has four different departments involved in producing each unitof its product. Maximum daily production capacities of each are: Department A - 100units; Department B - 135 units; Department C - 95 units, and Department D - 110 units.A consultant has suggested some alternatives to increase output capacities as follows:Alternative A - increase Department B's output to 200 units per day.Alternative B - increase Department C's output to 120 units per day.Alternative C - increase both Department A's and Department C's outputs to 110 units perday.Alternative D - increase Department D's output to 300 units per day.Assuming the costs of each alternative are similar and that only one can be chosen, whichalternative would yield the best results for the business?13)A)AB)BC)CD)DAnswer:CExplanation:A)B)C)D)14)A manufacturing business has four different departments involved in producing each unitof its product. Maximum daily production capacities of each are: Department A - 100units; Department B - 135 units; Department C - 95 units, and Department D - 110 units.Which department would be considered first in looking at ways to improve outputcapacity?14)A)AB)BC)CD)DAnswer:CExplanation:A)B)C)D)4
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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank - Page 6 preview image15)In using total quality management (TQM), the key focus is:15)A)employee focus.B)customer focus.C)management focus.D)executive focus.Answer:BExplanation:A)B)C)D)16)A manufacturing company has implemented just in time (JIT) into their process. JIT ispart of:16)A)the theory of constraints.B)total quality managementC)the lean business model.D)process re-engineering.Answer:CExplanation:A)B)C)D)17)Financial accounting is primarily concerned with:17)A)feasibility analysis.B)reporting to external investors and creditors.C)long term decision making.D)reporting exclusively to internal users.Answer:BExplanation:A)B)C)D)18)The planning phase includes all of these activities EXCEPT:18)A)selecting a course of action.B)organizing and allocating resources.C)identifying alternativesD)preparing budgets.Answer:BExplanation:A)B)C)D)5
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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank - Page 7 preview image19)Managerial accounting emphasizes the future in addition to historical reports, whereasfinancial accounting:19)A)emphasizes timeliness.B)emphasizes a historical perspective.C)emphasizes a future perspective.D)emphasizes individual organizational units.Answer:BExplanation:A)B)C)D)20)The management cycle proceeds in what order?20)A)Implementation, control, planningB)Control, implementation, planningC)Implementation, planning, controlD)Planning, implementation, controlAnswer:DExplanation:A)B)C)D)21)A manufacturing business which operates five days per week has four differentdepartments involved in producing each unit of its product. Maximum daily productioncapacities of each are: Department A - 100 units; Department B - 135 units; DepartmentC - 95 units, and Department D - 110 units. Maximum weekly output of completed unitsis?21)A)440B)675C)550D)475Answer:DExplanation:A)B)C)D)TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.22)Control involves the process of instituting procedures and then obtaining feedback toensure that all parts of the organization are functioning effectively and moving towardoverall company goals.22)Answer:TrueFalseExplanation:23)Strategy pertains to the general direction in which an organization plans to move toachieve its goals and objectives.23)Answer:TrueFalseExplanation:6
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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank - Page 8 preview image24)The control phase includes preparing budgets for the upcoming period.24)Answer:TrueFalseExplanation:25)Codes of ethics almost always provide employees with very specific and detailedinstructions about what they can do and not do.25)Answer:TrueFalseExplanation:26)Process reengineering diagrams a business process in detail, questions it, and thencompletely redesigns it to eliminate unnecessary steps, reduce opportunities for errors,and reduce costs.26)Answer:TrueFalseExplanation:27)The theory of constraint (TOC) framework focuses on effectively managing constraintsas the key to success.27)Answer:TrueFalseExplanation:28)Performance reports provide formal feedback to assist in determining whether operationsand performance are on track.28)Answer:TrueFalseExplanation:29)Management accounting information is primarily concerned with reports on theorganization as a whole while financial accounting focuses more on the individualsegments of the organization.29)Answer:TrueFalseExplanation:30)Effective corporate governance enhances stakeholders' confidence that an organization isbeing managed in their best interests rather than solely in the interests of topmanagement and certain key individuals.30)Answer:TrueFalseExplanation:31)Defects can be tolerated in a just-in-time (JIT) system.31)Answer:TrueFalseExplanation:32)Service firms do not sell any products but generate revenues by offering one or moretypes of services.32)Answer:TrueFalseExplanation:7
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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank - Page 9 preview image33)Companies that use the just-in-time (JIT) approach purchase materials and produce unitsonly as needed to meet actual customer demand.33)Answer:TrueFalseExplanation:34)The control phase includes analysing actual results, comparing to the budget andidentifying why differences occurred.34)Answer:TrueFalseExplanation:35)Many Canadian organizations have successfully implemented quality managementprinciples and have received recognition from Excellence Canada (formerly the NationalQuality Institute) whose mission is to inspire excellence in Canada.35)Answer:TrueFalseExplanation:36)One major implication of globalization for many organizations is that they must find newways of conducting business.36)Answer:TrueFalseExplanation:37)Among other things, companies using the just-in-time (JIT) approach, produce only inresponse to a customer order meaning that workers will not be idle whenever demandfalls below the company's production capacity.37)Answer:TrueFalseExplanation:38)Management accountants are not required to follow the generally accepted accountingprinciples that are used for external financial reporting when preparing reports forinternal users.38)Answer:TrueFalseExplanation:39)The Code of Ethics for Professional Accountants established by the InternationalFederation of Accountants governs only the activities of accountants in public practice.39)Answer:TrueFalseExplanation:40)Planning includes identifying alternatives and then selecting the one that does the bestjob of furthering the organization's objectives.40)Answer:TrueFalseExplanation:41)There are four major characteristics of total quality management.41)Answer:TrueFalseExplanation:8
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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank - Page 10 preview image42)Merchandising and manufacturing firms generate revenue by selling products.42)Answer:TrueFalseExplanation:43)Process reengineering is usually strongly accepted by all employees within anorganization.43)Answer:TrueFalseExplanation:44)Merchandising firms largely refer to retail and wholesale outlets that buy goods fromsuppliers and resell them to customers.44)Answer:TrueFalseExplanation:45)Managers everywhere carry out three major activities: planning, implementation, andcontrol.45)Answer:TrueFalseExplanation:46)The main idea underlying the lean business model is the elimination of waste.46)Answer:TrueFalseExplanation:47)Planning involves selecting a course of action and specifying how the action will beimplemented.47)Answer:TrueFalseExplanation:48)Reduction in tariffs, quotas, and other barriers to free trade; improvements in globaltransportation system; and increasing sophistication in international trade markets, areseveral factors that have led to an increase in worldwide competition in many industries.48)Answer:TrueFalseExplanation:49)The PDCA Cycle is a system of continuous improvement in which a planning committeeselects from a list of alternatives for improvement and moves to fully implementimmediately the chosen improvement.49)Answer:TrueFalseExplanation:50)Managerial Accounting reports are prepared for external users while FinancialAccounting reports are prepared for internal users.50)Answer:TrueFalseExplanation:9
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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank - Page 11 preview image51)Managers assign tasks to employees, arbitrate disputes, answer questions, solve on thespot problems, and make many decisions that affect customers and employees, which inturn, will likely influence future financial and nonfinancial performance.51)Answer:TrueFalseExplanation:52)Merchandising firms buy and sell finished goods whereas manufacturing firms maketheir products and then sell them to retailers.52)Answer:TrueFalseExplanation:ESSAY. Write your answer in the space provided or on a separate sheet of paper.53)Describe factors that have led to an increase in worldwide competiveness as part of the globalizationon business.Answer:Reduction of tariffs, quotas, and other barriers to free trade; improvements in globaltransportation systems; and increasing sophistication in international trade markets. Thesefactors help to reduce the costs of conducting international trade and make it possible forforeign companies to compete on a more equal footing with domestic firms.54)Explain the lean business model and its corresponding management practices and potential benefits.Answer:Many businesses in order to remain competitive in the global market place, have adopted thelean business model which focuses on the elimination of waste. This consists of implementingmanagement practices, such as just-in-time and total quality management, which if properlyimplemented can enhance quality, increase efficiencies, eliminate delays and reduce costs.55)Determine if the following is an emphasis of managerial (M) or Financial (F) accounting:1. Estimating the amount of materials needed for next month's production2. Information in reports focuses on objectivity and verifiability3. Reports follow GAAP or IFRS4. Precise information that is more readily available is included in reports.5. The focus and reporting emphasizes segments of an organization6. Organizations may follow their own guidelines for reports generated.Answer:1. M2. F3. F4. F5. M6. M56)Explain the importance of ethical responsibility and explain the need for ethical codes of conduct.Answer:Unethical behaviour is often the result of top executives focusing exclusively on short-termprofits at any cost. As businesses interact more and more, being ethically responsible isextremely important. Many organizations have implemented ethical codes of conduct to guidebehaviour.10
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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank - Page 12 preview image57)List four management practices (programs of continuous improvement) that may be used to achievethe objectives of the lean business model.Answer:1. just-in time.2. total quality management.3. process reengineering.4. theory of constraints.58)List seven key differences between Managerial Accounting and Financial Accounting.Answer:1. managerial accounting reports are prepared primarily for managers inside the organization,whereas financial accounting reports are typically prepared for the use of external parties, suchas shareholders, creditors and regulatory bodies.2. managerial accounting is not a mandatory requirement for businesses while financialaccounting is.3. managerial accounting is not regulated by prescribed standards or formats while financialaccounting must follow prescribed accounting standards.4. managerial accounting usually focuses on the parts or segments of an organization whilefinancial accounting is primarily concerned with reporting the activities of the organization as awhole.5. managerial accounting usually has a strong future orientation while financial accounting has ahistorical perspective.6. managerial accounting emphasizes obtaining data relevant to decision making while financialaccounting emphasizes the verifiability of data.7. managerial accounting requires information to be available on a timely basis while financialaccounting, with its historical perspective, focuses on precision.59)Classify the following activities as planning (P), implementation (I), or control (C).1. Estimating the amount of units that will be sold in the upcoming quarter.2. Assigning production line workers to stations in the production plant.3. Choosing between manual labor or purchasing a machine that will automate the productionprocess.4. Preparing a performance report which compares actual sales to budgeted sales for the last month.5. Solving a bottleneck issue in the production plant by moving one production line worker fromstation 2 to station 5 on the production line.6. Negotiating discounts with suppliers for materials needed in the production process.Answer:1. P2. I3. P4. C5. I6. I11
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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank - Page 13 preview image60)List four major potential benefits of successfully implementing a just-in-time (JIT) system in amanufacturing company.Answer:1. substantial reduction in inventory ordering and warehousing costs.2. reduction in waste due to inventory obsolescence and pilferage.3. a commitment to zero defects.4. a reduction in time to complete a product.12
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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank - Page 14 preview imageAnswer KeyTestname: C11)D2)B3)B4)B5)D6)A7)B8)D9)A10)C11)C12)D13)C14)C15)B16)C17)B18)B19)B20)D21)D22)TRUE23)TRUE24)FALSE25)FALSE26)TRUE27)TRUE28)TRUE29)FALSE30)TRUE31)FALSE32)TRUE33)TRUE34)TRUE35)TRUE36)TRUE37)FALSE38)TRUE39)FALSE40)TRUE41)FALSE42)TRUE43)FALSE44)TRUE45)TRUE46)TRUE47)TRUE48)TRUE49)FALSE50)FALSE13
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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank - Page 15 preview imageAnswer KeyTestname: C151)TRUE52)TRUE53)Reduction of tariffs, quotas, and other barriers to free trade; improvements in global transportationsystems; and increasing sophistication in international trade markets. These factors help to reduce thecosts of conducting international trade and make it possible for foreign companies to compete on a moreequal footing with domestic firms.54)Many businesses in order to remain competitive in the global market place, have adopted the lean businessmodel which focuses on the elimination of waste. This consists of implementing management practices,such as just-in-time and total quality management, which if properly implemented can enhance quality,increase efficiencies, eliminate delays and reduce costs.55)1. M2. F3. F4. F5. M6. M56)Unethical behaviour is often the result of top executives focusing exclusively on short-term profits at anycost. As businesses interact more and more, being ethically responsible is extremely important. Manyorganizations have implemented ethical codes of conduct to guide behaviour.57)1. just-in time.2. total quality management.3. process reengineering.4. theory of constraints.58)1. managerial accounting reports are prepared primarily for managers inside the organization, whereasfinancial accounting reports are typically prepared for the use of external parties, such as shareholders,creditors and regulatory bodies.2. managerial accounting is not a mandatory requirement for businesses while financial accounting is.3. managerial accounting is not regulated by prescribed standards or formats while financial accounting mustfollow prescribed accounting standards.4. managerial accounting usually focuses on the parts or segments of an organization while financialaccounting is primarily concerned with reporting the activities of the organization as a whole.5. managerial accounting usually has a strong future orientation while financial accounting has a historicalperspective.6. managerial accounting emphasizes obtaining data relevant to decision making while financial accountingemphasizes the verifiability of data.7. managerial accounting requires information to be available on a timely basis while financial accounting,with its historical perspective, focuses on precision.59)1. P2. I3. P4. C5. I6. I14
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Introduction To Managerial Accounting, Fifth Canadian Edition Test Bank - Page 16 preview imageAnswer KeyTestname: C160)1. substantial reduction in inventory ordering and warehousing costs.2. reduction in waste due to inventory obsolescence and pilferage.3. a commitment to zero defects.4. a reduction in time to complete a product.15
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