Name: Date: Score:

Program–Year–Section: Professor

Multiple Choice — I

1. Managerial accounting differs from financial accounting in that financial mounting is

a. More oriented toward the future.

b. primarily concerned with external financial reporting.

c. Provides measures and internal reports.

d. Confidential and used by management, instead of publicly

reported.

2. The Chief management accountant called "controller traditionally performs these functions
except:

a. The establishment and implementation of the financial planning process.

b. Financial and management reporting and interpretation.

c. Protection of company's resources and economic conditions.

d. Preparation of proposals for product promotions. (rpcpa)

3. Management should implement a different and/or more expensive accounting system only
when

a. The cost of the system exceeds the benefits.

b. Management thinks it correct.

c. The board of directors dictates a change.

d. The benefit of the system exceed the cost.

4. Controllership has attained recognition in corporate management as business expand in

complexity and reach and as the controller exerts influence for management to take
organization's goals. Controllership and treasurer ship constitute corporate finance. These are
among the traditional

functions of corporate finance.

i. Tax management.

ii. Financial reporting and interpretation.

iii. Credit management.

iv. Sourcing and investing of funds.

v. Reporting to government regulatory agencies.

vi. Risk management.

vii. Economic appraisal.

viii. Planning for control.

The traditional controller’s functions are:

a. All items

b. Items i, ii, v, vi, vii and viii only.

c. Items l, ii, iii, iv, v, and viii only.

d. Items ii, iii, v, vii and viii only.

5. Controllers are ordinarily not concerned with

a. Preparation of the returns.

b. Reporting to government.

c. Protection of assets.

d. Investor relations. (rpcpa)

6. The treasury function is usually not concerned with

a. Financial accounting

b. Short-term financing.

c. Cash custody and banking.

d. Credit extension and collection of bad debts.

7. As businesses increase in complexity, the functions of controllership has attained top level
recognition in the corporate area. Many areas related to finance and accounting have identified
with controllership. One area that becomes controversial when included under the controller and
viewed that such inclusion violates basic internal control is

a. Credit and collection.

b. Internal auditing.

c. Long-ra financial planning.

d. Taxation and reporting to government agencies. (rpcpa)

8. Which of the following is a controller's responsibility?

a. Tax planning and accounting.

b. Custodian of funds.

c. In-charge of credit and collection.

d. Arranging short-term loans and financing. (rpcpa)

9. Management accounting is an integral part of the management process. As it provides
essential information for the following objectives except;

a. Maintaining the current level of resource utilization as well as

internal and external communication.

b. Measuring and evaluating performance.

c. Planning strategies and controlling current activities of the

organizations.

d. Enhancing objectivity in decision-making. (rpcpa)

10. The concept Of -management by exception' refers to management’s

a. Consideration of only those items which vary materially from plans.

b. Consideration Of only rare events.

c. Consideration Of items selected a random.

d. None Of the above. (rpcpa)

11. To distinguish between management accounting and financial accounting, the following
statements are correct except:

a. Management accounting, in view of its various integrated should have a separate data
recording and retrieval system from financial accounting.

b. Financial accounting is bound by GMP, and management accounting need not be in

conformity with GAAP.

c. Financial accounting can regarded as the process while management accounting can regarded
as the usefulness.

d. Financial accounting output can still be useful even when delayed. (rpcpa)

12. Which Of the following is not a controller's function?

a. ln-charge of planning and control.

b. Promon of assets.
c. Interpretation and reporting on effects of external factors on

business.

d. Arranging short-term financing.

13. The following characteristics refer to financial accounting except:

a. Provides information to external users.

b. Emphasizes on objective data.

c. Has no externally imposed standards.

d. Generates general-purpose financial statements. (rpcpa)

14. Which of the following is not a characteristic of a staff authority?

a. It gives support. advise and service to line managers.

b. It is exercised laterally and upward.

c. It has authority to command action or give orders to subordinates.

d. None of the above.

15. Which type of authority do management accountants generally exercise

a. functional

b. company

c' line

d. staff (rpcpa)

16. Which Of the following characteristics does not relate to management

accounting?
a. Accounting reports may include non-monetary information.

b. It is subject to restrictions by GAAP.

c. Reports are often based on estimates and are seldom useful for

everything other than purpose for which they are prepared.

d. It provides data for external users within the business

organizations. (rpcpa)

17. Which of the following characteristics relates to financial accounting?

a. Reports are promptly prepared and submitted to preserve its usefulness.

b. Data may be both historical and estimates.

c. It must adhere to generally accepted accounting principles.

d. It provides information needed by management in making

decisions. (rpcpa)

18. Which of the statements is true or false?

Statement 1. Management accounting, reports tend to be much more detailed than financial
accounting.

Statement 2. Cost accounting refers to accounting for the annual cost of operating a business.

Statement I Statement 2

a. False True

b. False False

c. True True

d. True False (rpcpa)

19. Which of the statements is true or false?

Statement 1. The Securities and Exchange Commission is the only government agency that has
jurisdiction over corporations in the Philippines.

Statement 2. Cost of goods sold is not an expense though the amount is applied to units sold.

Statement I Statement 2

a. False True

b. False True

c. True False

d. True True (rpcpa)

20. A formal report in responsibility accounting is covered by the guidelines of

a. GAAP

b. SEC

c. Management

d. PICPA (rpcpa)

21. Walter is management accountant who has discovered that company is violating
environmental If his immediate superior is involved, his appropriate action is to

a. DO nothing he has duty of loyalty to the organization.

b. Consult the audit committee.

c. Present the matter to the next higher managerial level.

d. Confront his immediate superior.

22. Integrity in an ethical requirement for all management accountants. One aspect of integrity
requires

a. Performance of professional duties in accordance with applicable laws.

b. Avoidance Of conflict pf interest.

c. Refraining from improper use of inside information.

d. Maintenance of an appropriate level of professional competence.

23. Under the express terms Of the IMA Code of Ethics, a management accountant may not

a. Advertise.

b. Encroach on the practice of another management accountant

c. Disclose confidential information unless authorized or legally obligated.

d. Accept other employment while serving as a management accountant.

24. Which ethical standard is most clearly if a management accountant knows of a problem that
could easily mislead users but nothing about it

a. Competence.

b. Legally.

c. Objectivity.

d. Confidentially.

25. The IMA Code of Ethics includes an integrity standard, which requires the management
accountant to

a. Identify and make known anything that may hinder his/her judgment or prevent satisfactory
completion of any duties.

b. Report any relevant information that could influence users of financial statements.

c. Disclose confidential information when authorized by his/her firm or required under the law.

d. Refuse gifts from anyone.

26. The IMA Code of Ethics includes a competence standard, which requires the management
accountant to

a. Report information, whether favorable or unfavorable.

b. Develop his/her accounting proficiency on a continual basis.

c. Discuss ethical conflicts and possible courses of action with an unbiased counselor.

d. Discuss, with subordinates, their responsibilities regarding the disclosure of information about
the firm.

27. The objectives of management accounting information systems include the following,
except:

a. Profit measurement.

b. Guide for planning.

c. Standards for controlling.

d. Completeness.

28. The following are functions of the controller except:

d. Planning and controlling.

b. Consulting and evaluating.

c. Protection of assets.

d. Review and audit.

Indicate whether the following statements are true or false.

29. Management accounting provides the information essential for planning evaluating and
controlling the strategies, tactics and operations of an organization.
30. Among the roles of controllership is the development of the management information
system, upon completion of which the controller must not interfere with its implementation.

31. In the organizational structure of management accounting, the chief accounting officer's
authority is basically "line" authority.

32. Management by exception pertains to management taking action on items selected at

random.

33. Reporting to various government agencies such as BIR, SEC, and SSS is a
function of a controller.

34. Management accounting has no externally imposed standards while financial accounting has
to follow the generally accepted accounting principles.

35, Interim financial reports issued by managerial accountants must conform to generally
accepted accounting principles.

36. The managerial accountant often deals with information that cannot
expressed in numbers.

37. In spite of the ever-increasing complexities of businesses today the role of the controller in
today's management has not changed from that of the controller of yesteryears

Fill in the blanks.

1.

identifies, collects, measures, classifies, and reports information

that is useful to internal users in planning, controlling and decision making.

2-5.

Management accounting information includes information on the costs of an organization's

, , and which assist managers in their planning and
control activities
6 -15

Management Accounting is the process of , , ,

, , , , and of information used by
management to , , and
, within an entity and to assure appropriate use of and accountability for its
resources.

16-18

The American Institute of Certified Public Accountants (AICPA) states that management
accounting as practice extends to the following three areas:
a. - advancing the role of the management accountant as developing a.
strategic partner in the organization. b. – developing the practice of
business decision-making and managing the performance of the the organization. c.
-contributing to frameworks and practices for identifying, measuring, managing and
reporting risks to the achievement of the objectives of the organization
19

the process of setting goals, determining resource requirements, and devising means
of achieving goals.

20

are the financial plans of a company.

21

is the process of identifying the sources or inflows economic of resources, and the
uses or outflows of economic resources of a company.
22

are are economic resources of an entity that provide future benefits.

23

The officer in charge of an entity's accounting department who checks finances and
expenditures.

24

The , the chief accounting officer, supervises all sections in the accounting
department and generally plays a key role in both planning and controlling endeavors throughout
the organization.

25-27

The Contemporary objectives of Management Accounting are to:

a. in order to enhance shareholders wealth
b. for management decision making and a. b. reduce the risk associated with
making decisions; c. , and make operations more efficient and timely

28-31
Four basic cost accounting activities that support the management accounting which involves
determining the actual function are: a. which involves determining the actual
function cost of a product or an activity, such as production or marketing
b. whereby costs are recorded in journals and ledgers;
C. refers to accountants and managers analyzing the data to help make plans and
solve problems; and d. which involves presenting the costs in detail, including how
the costs were measured, what characteristics the costs have, and what the costs actually
represent and how they should be interpreted.

Multiple choices 1. B 2. D 3. C 4. B 5. D 6. A 7. B 8. A 9. A 10. A 11. A 12. D 13. C 14. D 15. D

16. B 17. C 18. B 19. A 20. C 21. C 22. B 23. B 24. C 25. D 26. B 27. A 28. D True or false 29.
True 30. False 31. True 32. False 33. True 34. True 35. False 36. True 37. False

Answers in fill in the blanks 1. management accounting 2-5. Products budgets, performance
reports other information 6-15. Identification Measurements Accumulation Analysis Preparation
Interpretation Communication Plan Evaluate Control 16-18 Strategic management Performance
management Risk management 19. Planning 20. Budgets 21. Budgeting 22. Assets 23.
Controller 24 controller 25-27 To develop management strategies To provide competitive and
operation anlysis To reduce costs 28-31 Cost determination Cost recording Cost analyzing Cost
reporting