DARE / PCPAR / OCPAR MAS.

001
DAGUPAN ACCOUNTANCY REVIEW
PAMPANGA CPA REVIEW
OLONGAPO CPA REVIEW
_____________________________________________________________________________________________________________________________________________________________________________________________

01 - MAS; Managerial Accounting; Current Trends

Multiple Choice Questions (Sources: Various Test Banks, CMA)

1. Management Advisory Services may be defined as
a. A branch of accounting concerned with the preparation of budgets, financial statements analyses and
other management reports to maximize the client’s profits.
b. An area of accounting that provides technical assistance to management to increase the efficiency
and effectiveness of use of resources in achieving company’s goals.
c. A service that covers everything including financial accounting, taxation and audit.
d. A service being rendered by practitioners primarily to implement a decision for the benefit of the
management.

2. The primary purpose of MAS is to help the client

a. identify its problems and maximize its resources
b. improve the use of its resources and capabilities to achieve its objectives
c. become more profitable by relying upon the practitioner’s existing personal knowledge about the
client’s business
d. document and quantify future plans without impairing the practitioner’s objectivity or allowing the
practitioner to assume the role of management.

3. The following statements pertaining to the CPA’s practice of MAS are true except
a. A CPA may not designate himself as a management consultant although he may actually be engaged
in the said practice
b. A CPA would not violate the Accountancy Law if he enters into a partnership with a non-CPA for the
exclusive purpose of rendering MAS.
c. To maintain independence, a CPA should limit his services to that of recommendation to the client.
d. A practitioner may decide for the client only when required in the engagement letter.

4. Consultants could trace most of their current engagements to the following sources except:
a. Speeches in professional and business organizations
b. Referrals from clients
c. Advertisement in radio, TV and newspaper
d. Books written

5. S1: Increase in complexity in managing and conducting business can contribute to the growth of
management consultancy. S2: Lack of competent staff by businesses can also contribute to the growth of
management consultancy.
a. Only S1 is true c. Only S2 is true
b. Both are true d. Both are false

6. MAS consultation as opposed to MAS engagement generally involves advice or information given by a
CPA or practitioner based upon
a. Existing personal knowledge about the client
b. An analytical approach and process
c. Information obtained during an examination of the client’s financial statements
d. The results of an operational audit

7. Which statement about the degree of detail in a report is true?

a. It depends on the level of the manager receiving the report.
b. It may depend on the frequency of the report.
c. It depends on the type of manager receiving the report.
d. All of the above.

8. Which consideration influences the frequency of an internal report?

a. The wishes of the managers receiving the report.
b. The frequency with which decisions are made that require the information in the report.
c. The cost of preparing the report.
d. All of the above.

9. Which of the following is not an advantage of a CPA over other professionals in the practice of MAS?
a. They are equipped with technical knowledge about accounting and taxation which are crucial areas
in the practice of MAS.
b. They are members of a professional organization duly recognized by the government and holds to the
code of ethics being implemented by this organization.
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c. They are familiar with the client’s business due to their wide knowledge about different business
industries acquired through their practice of accounting.
d. They are more credible and possess the highest qualifications among the professionals.

10. Which of the following is the least characteristic of MAS?

a. It relates both to the future and past.
b. It involves a wide range of assignments.
c. It requires highly qualified staff.
d. It involves usually nonrecurring engagements.

11. The following characterize management advisory services except

a. Involve decision for the future
b. Broader in scope and varied in nature
c. Utilize more junior staff than senior member of the firm
d. Relate to specific problems expert help is required.

12. MAS can relate to the following areas except:

a. the basic management functions
b. the introduction of new ideas, concepts and methods to management
c. the improvement of policies, procedures, systems, methods and personal relationships
d. the application and use of management accounting, control systems and mathematical techniques

13. MAS services of CPAs cover the following except:

a. Audit, tax and legal services
b. Organizational development & planning
c. system design, development & implementation
d. Project feasibility study

14. Cost accounting is an area of MAS. Which of the following is least likely a useful knowledge about cost
accounting for MAS practitioners?
a. Development of standard cost system c. Cost analysis and control
b. Variance analysis d. Investigation of variances

15. S1: MAS may be rendered by any person, if he is competent enough for such engagement. S2: Audit may
be rendered by any person if he is competent enough for such engagement.
a. Only S1 is true c. Only S2 is true
b. Both are true d. Both are false

16. Which is not classifiable as MAS by CPAs?

a. Lease or buy analysis c. public relations work
b. Information systems d. Financial planning

17. MAS classified as usual services include the following except:

a. design and installation of accounting systems
b. assisting in bankruptcy and receivership proceedings
c. suggestions for improvements in internal control system
d. assistance in preparation of forecasts and budgets

18. MAS classified as somewhat specialized services include the following except:
a. calculations of government contracts and allocating costs in compliance with reporting requirement
b. advising on accounting and tax matters relative to estate planning in cooperation with legal and
insurance counsel
c. giving advice on dividend policy and plans for expansion
d. analysis of financial and operating statements for management, shareholders and creditors.

19. MAS classified as highly specialized services include the following except:
a. research and evaluation of alternative methods of handling a transaction for its effect on finance and
tax consequence
b. auditing management policies for their effectiveness
c. conducting motion studies for standard cost system
d. evaluating the desirability of a particular area of plant location

20. CPA’s are in a more advantageous position than members of other professions to render MAS because
a. most CPAs are highly educated
b. a CPA is a person with recognized standing
c. the CPA is already familiar with the client’ business and enjoy the client’s confidence
d. only CPAs are capable of rendering MAS.

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21. The following are factors considered in determining the scope of MAS that a CPA may render except:
a. Independence c. requirements for specialization
b. Competence d. Professional fee

22. Which activity is not involved during the negotiation stage of MAS engagement?
a. A survey to ascertain the problem of the client and what is required to reach a solution
b. Identification of the end product of the assignment
c. Agreement on the role to be performed by the practitioner
d. Agreement on the final fee to be charged for the service of the practitioner

23. The objectives of an engagement program include the following except:

a. To facilitate time and efficiency control over personnel assigned to the engagement
b. To provide means for arranging, distributing and assigning responsibility for various segments of an
engagement
c. To provide a means for evaluating whether all segments of the engagement have in fact been
completed
d. To provide a means of determining the exact amount and timing of bill to the client

24. To achieve the objectives of the accountancy profession, CPA’s, including those who render MAS should
observe the following principles except:
a. Integrity
b. Confidentiality
c. Careful selection of clients to include only big and financially capable business entities
d. knowledge of up to date technical and professional standards

25. Which action of a CPA is not acceptable?

a. A CPA represents 3 major players in the industry in rationalizing the industry’s incentives before
government public hearings
b. A CPA provides consulting services to 2 major competing clients.
c. A CPA provides consulting services to an existing audit client
d. A CPA share with a new and substantial client information about another client belonging in the same
industry

26. The most important factor in selecting an engagement team is to assign consultants:
a. who have high imaginative thinking or unusual skill in the interpretation and use of financial and
statistical data.
b. with the appropriate skills, experience and types of thinking to deal with the client’s problems
c. with prior experience in the client’s industry
d. with combination of skills and experience in various business functional areas as well as in different
industries

27. Which business condition can’t be used by the consultant to justify abandonment of client?
a. overly specialized
b. Unchallenging
c. Beneath the growing fee structure
d. The client’s competitor engaged the services of the practitioner for a higher fee

28. Management accounting is an integral part of the management process. As such, it provides essential
information for the following objectives, except:
a. Measuring and evaluating performance
b. Planning strategies and controlling current activities
c. Maintaining the current level of resource utilization as well as internal and external communication
d. Enhancing objectivity in decision making

29. S1: Although financial and managerial accounting differ in many ways, they are similar in that both rely on
the same underlying financial data. S2: Managerial accounting is a branch of financial accounting and
serves essentially the same purposes as financial accounting.
a. Only S1 is true c. Only S2 is true
b. Both are true d. Both are false

30. Which is not an objective of managerial accounting?

a. Providing information for decision making and planning
b. Maximizing profits and minimizing costs
c. Measuring the performance of managers and subunits
d. Motivating managers toward the organization's goals.

31. Which of the following statements about managerial accountants is false?

a. Managerial accountants more and more are considered "business partners."
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b. Managerial accountants often are part of cross-functional teams.
c. An increasing number of organizations are segregating managerial accountants in separate
managerial-accounting departments.
d. In a number of companies, managerial accountants make significant business decisions and resolve
operating problems.

32. Which are related to management accounting (MA) and financial accounting (FA)?
1. External report 4. GAAP
2. Historical information 5. Prospective financial statements
3. Contribution approach income statement
MA FA MA FA
a. 1, 2, 5 3, 4 c. 2, 3 1, 4, 5
b. 3, 5 1, 2, 4 d. 3 1, 2, 4, 5

33. Management accounting focuses primarily on providing data for:

a. internal uses by managers c. external uses by BIR
b. external uses by stockholders & creditors d. external uses by SEC

34. Managerial accounting:

a. is unregulated
b. produces information that is useful only for manufacturing organizations
c. is based exclusively on historical data
d. is regulated by the Securities and Exchange Commission (SEC).

35. Which would more accurately describe management accounting information?

a. comparable, verifiable, monetary c. budgeted, informative, adaptable
b. required, estimated, internal d. historical, precise, useful

36. S1: For internal uses, managers are more concerned with receiving information that is relevant, flexible and
immediately available. S2: Managerial accounting places more emphasis on detailed segment reports
about departments, products and customers.
a. Only S1 is true c. Only S2 is true
b. Both are true d. Both are false

37. One major difference between financial and management accounting is that
a. Government regulations do not apply to management accounting.
b. Management accounting is not under the jurisdiction of the SEC.
c. Financial accounting reports are prepared primarily for users external to the company.
d. All of the above.

38. Compared to financial accounting, managerial accounting places more emphasis on:
a. the flexibility of information c. the timeliness of information
b. the precision of information d. both A and C

39. Which of the following statements represents a similarity between financial and managerial accounting?
a. Both are solely concerned with historical transactions.
b. Both are governed by accounting standards.
c. Both rely heavily on published financial statements.
d. Both draw upon data from an organization’s accounting system.

40. S1: Corporate Finance deals with the combined functions of controllership and treasurership. S2: The head
of this powerful group is the comptroller.
a. Only S1 is true c. Only S2 is true
b. Both are true d. Both are false

41. Which of the following is not a function of a treasurer?

a. Investor relations c. Investments
b. Insurance d. Government reporting

42. Which is not a function of the treasurer?

a. preparing financial statements c. safeguarding assets
b. managing investments d. raising capital

43. A company’s controller is least concerned with:

a. Investor relations c. financial reporting
b. Information processing d. Regulatory compliance
44. The controller traditionally performs the following functions, except
a. Establishment and implementation of the financial planning process
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b. Financial and management reporting and interpretation
c. Protection of company resources and economic valuation
d. Preparation of proposals for product promotion

45. Which is considered as controller’s responsibility?

a. Custody of funds c. arranging short term financing
b. Credit approval and collection d. Tax planning and internal control

46. “Management by exception” refers to management’s consideration of

a. all items included in the plan c. items selected at random
b. items which vary materially from the plan d. items considered rare events

47. Which function is most directly related to management by objective?

a. Planning c. decision making
b. Control d. Reporting

48. Which managerial function involves a detailed financial and operational description of
anticipated operations?
a. Decision making c. Planning
b. Directing operational activities d. Budgeting

49. Which function of management involves overseeing day-to-day activities?

a. Planning c. decision making
b. directing and motivating d. controlling

50. The function of management that compares planned results to actual results is:
a. Planning c. decision making
b. directing and motivating d. controlling .

51. Titan Company has set various goals, and management is now taking appropriate action to ensure that the
firm achieves these goals. One such action is to reduce outlays for overhead, which have exceeded
budgeted amounts. Which functions best describes this process?
a. Coordinating c. Decision making
b. Organizing d. Controlling

52. Which statements are false concerning line and staff functions?
I. Persons occupying staff functions have authority over persons occupying line functions.
II. Both line and staff functions are depicted on the organization chart.
III. Line functions are directly related to the basic objectives of an organization.
a. I only c. I, II, and III
b. II only d. I and II only

53. All of the following hold a line position in an airline company, except?
a. Baggage handler c. Flight attendant
b. Ticket agent d. Finance Officer

54. How many of the following employees at a multinational company would likely be considered as holding a
staff position?
-The company’s chief finance officer
-The Company’s chief operating officer
-The branch manager in the Philippines
-The company’s lead legal officer
a. Only one. c. Two
b. Three d. Four

55. Standards of Ethical Conduct for management accountants includes concepts related to:
a. Competence, confidentiality, integrity, objectivity
b. Competence, performance, integrity, reporting
c. Integrity, experience, reporting, objectivity
d. Confidentiality, reporting, competence, objectivity

56. The ability of a consultant to maintain his role as an objective adviser without making any attempt to make
decisions for the client.
a. Independence in mental attitude c. objectivity
b. Integrity d. maturity

57. In which situation is the independence of a CPA rendering MAS not impaired?
a. The CPA performs services wherein he is in effect, acting as employee of the client
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b. The CPA loses objectivity and acts in a manner advocating for the interest of the client
c. The CPA performs decision making for the client
d. The CPA limits his services to presenting recommendations or giving of advice

58. Randy Manzano is the external auditor of ABC Inc. He was asked to perform MAS in the area of inventory
management, which is believed to be one area of inefficiency of the company’s operations. Which action
would impair Mr. Manzano’s independence?
a. Identify the inventory management problem as caused by the presently operative procedures in the
purchasing, receiving and issuance operations.
b. Study and evaluate the inventory management problem and suggest solutions.
c. Develop a time schedule for implementation of the solution to be adapted by UC Inc.
d. Supervise management of purchasing, receiving and issuance operations

59. Mr. Armand Bolislis is a distinguished CPA providing auditing services to different clients. ABC Inc. asked him
to study the company’s executive compensation package. He has no prior experience in this area. What
will be the most appropriate action of Mr. Bolislis?
a. Decline the engagement since he can’t expect to complete it without undertaking research in the
area
b. Accept the engagement and issue a report which may guarantee the achievement of results
indicated by his recommended actions
c. Accept the engagement and study, research and or consult with knowledgeable experts in order to
increase his competences
d. Accept the engagement and perform it in accordance to GAAS.

60. A personal attribute of a consultant which refer to his ability to view situations in perspective and to take
action needed on a calm and controlled basis without being diverted from a sound, logical and ethical
course by outside pressure.
a. Judgment c. psychological maturity
b. Courage d. Physiological balance

61. In which situation is an MAS practitioner not allowed to disclose confidential information?
a. When disclosure is authorized by client
b. To respond to an inquiry of shareholders and creditors of the client
c. When disclosure is necessary to protect the professional interests of the MAS practitioner in legal
proceedings
d. To produce documents to give evidence in the course of legal proceedings

62. Which of the following is not an element of competence?

a. To develop appropriate knowledge about a particular subject.
b. To perform duties in accordance with relevant laws.
c. To perform duties in accordance with relevant technical standards.
d. To refrain from engaging in an activity that would discredit the profession.

63. The Standards of Ethical Conduct for Management Accountants developed by IMA contain a policy
regarding confidentiality that requires management accountants to refrain from disclosing confidential
information acquired in the course of their work:
a. except when authorized by management
b. in all situations
c. except when authorized by management, unless legally obligated to do so
d. in all cases not prohibited by law

64. According to the standards of ethical conduct, management accountants should

a. Refuse all gifts and hospitality offered by one of the company’s suppliers
b. Inform his superiors regarding confidentiality of information acquired in the course of work and monitor
their activities to assure the maintenance of that confidentiality
c. Prepare complete and clear reports and recommendations before appropriate analysis of relevant and
reliable information
d. Disclose fully all relevant information that could reasonably be expected to influence an intended user’s
understanding of the reports and recommendations presented.

65. The Institute of Management Accountant’s Code of Ethics

a. Is legally enforceable contract with all management accountants.
b. Should be viewed as a goal for professional behavior.
c. Is a legally enforceable contract with all CPAs.
d. Provides ways to measure departures from ethical behavior.

66. Integrity is required for all management accountants. One aspect of integrity requires
a. avoidance of actual or apparent conflicts of interest and advise all appropriate
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parties of any potential conflict
b. refraining from improper use of confidential information
c. maintenance of appropriate level of professional competence
d. performance of professional duties in accordance with applicable laws

67. Dom is a managerial accountant in the accounting department of RAM Industries Inc. He has just
discovered evidence that some of the corporation's marketing managers have been wrongfully inflating
their expense reports in order to obtain higher reimbursements from the firm. According to the IMA’s
Standards of Ethical Conduct, what should Dom do upon discovering this evidence?
a. notify the controller
b. notify the marketing managers involved
c. ignore the evidence because she is not part of the Marketing Department
d. notify the president of the corporation

68. Assume that a managerial accountant regularly communicates with business associates to avoid conflicts
of interest and advises relevant parties of potential conflicts. In so doing, the accountant will have applied
the ethical standard of:
a. objectivity c. credibility
b. confidentiality d. integrity

69. Which statement(s) about just-in-time (JIT) inventory management is (are) true?
I. The emphasis of JIT is on "pull" manufacturing, which means that work is initiated only in response to
customer orders.
II. Raw materials are purchased just in time to be used in production
III. JIT is an inventory technique that focuses on reduction of both inventory and related
inventory costs.
a. II and III c. III only
b. II only d. I, II and III

70. Ideally, how many units should be produced in a just-in-time manufacturing system?
a. budgeted customer demand for the week
b. budgeted customer demand for the following week
c. actual customer demand for the current week
d. maximum production capacity for the week

71. An approach to continuous improvement that focuses on serving customers and uses front line workers to
identify and solve problems systematically
a. Total Quality Management c. Business Process Reengineering
b. Just in Time system d. Activity Based Management

72. Which is a primary objective of TQM?

a. To achieve greater employee satisfaction c. to reduce delivery cycle time and charges
b. To achieve greater customer satisfaction d. all of the above

73. S1: Process Reengineering emphasizes a team approach involving front-line workers, whereas Total Quality
Management is usually implemented using outside specialists and is imposed from above. S2: Process
Reengineering is generally considered to be a more radical approach to improvement than Total Quality
Management
a. both statements are true c. statement 1 is true
b. both statements are false d. statement 2 is true

74. Process Reengineering includes all of the following steps except:

a. redesigning the process c. elimination of all constraints
b. constructing a flowchart of a process d. elimination of non-value-added activities

75. Process Reengineering should result in

a. a well organized engineering department
b. an entirely new company
c. a streamlined process that minimize inefficiencies and generates less errors
d. A shift from job order to process costing system

76. A company has a bottleneck operation that slows production. Which tool or approach could the firm use
to determine the most cost-effective ways to eliminate this problem?
a. Linear programming c. Payoff matrices
b. Theory of constraints d. Decision-tree diagrams.

77. Theory of Constraint (TOC) is based on the idea that every firm has at least 1 constraint that prevents it from
attaining an objective. Under the TOC,
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a. efforts that are designed to improve the rate of output of a work center should be focused on the
constraint
b. efforts should be focused to work center with highest productive capacity in order to improve
operations,
c. efforts should be focused on non-constraints
d. all of the above

78. Which is true regarding the theory of constraints?

a. The theory of constraints does not apply to companies with multiple products because of capacity
measurement difficulties.
b. In any profit-seeking company, there must be at least one constraint.
c. Constraints or bottlenecks stop organizations from selling an infinite number of units or services.
d. both B and C

79. According to the Theory of Constraints, improvement efforts should usually be focused on:
a. the work centers that are not constraints.
b. the work center that is the constraint
c. the work center with the highest total cost
d. the work center with most obsolete equipment

80. The Theory of Constraints (TOC) is a management approach that emphasizes the importance of managing
constraints. In this context, a constraint is
a. anything that prevents an organization or individual from getting more of what it wants
b. any activity that does not add value to the product being sold by the company
c. a series of steps that are followed to carry out some task in a business
d. the time required to make a completed unit of product starting with raw materials

81. A manufacturing process that is organized into group technology cells utilizing no human labor is called
a. islands of technology c. computer integrated manufacturing
b. process simplification d. traditional manufacturing

82. Characteristics of lean manufacturing include all of the following except

a. push manufacturing c. reduced setup time and small lot sizes
b. zero defects d. reliable vendors

83. Which of the following is not a principle of lean manufacturing?

a. Products are pushed from the production end to the customer
b. All activities that do not add value and maximize the use of scarce resources must be eliminated
c. Achieve high inventory turnover rate.
d. A lean manufacturing firm must have established and cooperative relationships with vendors

84. All of the following are problems with traditional accounting information except:
a. Managers in a lean setting require immediate information.
b. The measurement principle tends to ignore standards other than money.
c. Standard costing motivates nonlean behavior in operations.
d. All of the above are problems associated with traditional accounting information.

85. Statement 1: Software programs for the design of products and structures are Computer Aided
Design(CAD).
Statement 2: Computer Aided Manufacturing (CAM) allows CAD product design to be an input into an
automated manufacturing system that makes the product.
a. Both statements are true c. Only S1 is true
b. Both statements are false d. Only S2 is true

SELF-TEST QUESTIONS

True or False
1. Economic events are the raw data for both financial and managerial accounting.
2. Generally accepted accounting principles govern financial accounting but not managerial accounting.
3. Internal financial statements must be prepared using generally accepted accounting principles.
4. The form and content of reports can influence decisions made by managers.
5. Management-by-objectives and management-by-exception are two names for the same general
management principle.
6. Some managerial accounting reports contain costs not incorporated in the basic accounting system.
7. Managerial accountants should, but have no obligation to, maintain their professional skills.
8. Financial accounting is most concerned with meeting the needs of internal users.
9. Financial accounting is most concerned with addressing the needs of the firm as a whole
10. Managerial accounting is most concerned with addressing the needs of individual departments of the firm.
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11. Cost accounting serves as a bridge between financial and managerial accounting.
12. Mission statements typically remain unchanged throughout the life of an organization.
13. An organization’s strategy should reflect the organization’s core competencies.
14. An organization’s strategy is the guiding force for its mission.
15. Line personnel give assistance to staff employees.
16. Line managers are directly responsible for achieving organizational goals.

Multiple Choice Questions

17. The controller of a company or other organization is
a. a staff manager. c. an accountant, not a manager.
b. an operating manager. d. a natural manager.

18. Managerial accounting is similar to financial accounting in that

a. both are governed by generally accepted accounting principles.
b. both deal with economic events.
c. both concentrate on historical costs.
d. both classify reported information in the same way.

19. Managerial accounting differs from financial accounting in that it is

a. more concerned with the future.
b. more concerned with segments of a company.
c. less constrained by rules and regulations.
d. all of the above.

20. One of the ways managerial accounting differs from financial accounting is that managerial accounting
a. is bound by generally accepted accounting principles.
b. classifies information in different ways.
c. does not use financial statements.
d. deals only with economic events.

21. Which activity is NOT normally performed by managerial accountants?

a. Assisting managers to interpret data in managerial accounting reports.
b. Designing systems to provide information for internal and external reports.
c. Gathering data from sources other than the accounting system.
d. Deciding the best level of inventory to be maintained.

22. Conventional and just-in-time manufacturers both

a. Maintain large inventories of their products.
b. Sell only to other manufacturing companies.
c. Desire to meet customers' deadlines.
d. Require about the same amount of space to operate.

23. The set of processes that transform raw materials into finished products is known as a
a. differentiation strategy.
b. flexible manufacturing system.
c. lowest cost strategy.
d. value chain.

24. A just-in-time manufacturer is more likely than a conventional manufacturer to

a. receive more frequent deliveries of materials.
b. spend less money on advertising.
c. need workers with fewer skills.
d. all of the above.

25. A conventional manufacturer is more likely than a just-in-time manufacturer to

a. have a short production cycle.
b. produce goods in small batches.
c. hold large inventories to serve as buffers.
d. none of the above.

26. The professional certification most relevant for managerial accountants is the
a. CMA. b. CPA. c. CSA. d. MAS.

27. Planning and control are

a. different names for the same thing.
b. the basic functions of management.
c. described equally well by the terms "decision making" and "performance evaluation."
d. exemplified by, respectively, financial statements and budgeting.
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28. One characteristic of the conventional manufacturing environment is
a. flexible manufacturing systems.
b. manufacturing cells.
c. a just-in-case philosophy.
d. a high degree of quality control.

29. A characteristic of the just-in-time manufacturing environment is

a. frequent deliveries of materials. c. little or no inventory of finished product.
b. manufacturing cells. d. all of the above.

30. Conventional and just-in-time manufacturers differ in that the conventional manufacturer is likely to
a. be a new entrant into its industry.
b. need less storage space than its JIT competitors.
c. give less credibility to management accounting reports.
d. have a longer production cycle than its JIT competitors.

31. Which of the following statements about management or financial accounting is false?
a. Financial accounting must follow GAAP.
b. Management accounting is not subject to regulatory reporting standards.
c. Both management and financial accounting are subject to mandatory recordkeeping requirements.
d. Management accounting should be flexible.

32. Management accounting

a. is more concerned with the future than is financial accounting.
b. is less concerned with segments of a company than is financial accounting.
c. is more constrained by rules and regulations than is financial accounting.
d. all of the above are true.

33. Modern management accounting can be characterized by its

a. flexibility. c. complexity.
b. standardization. d. precision.

34. Financial accounting

a. is primarily concerned with internal reporting.
b. is more concerned with verifiable, historical information than is cost accounting.
c. focuses on the parts of the organization rather than the whole.
d. is specifically directed at management decision-making needs.

35. Which of the following topics is of more concern to management accounting than to cost accounting?
a. generally accepted accounting principles
b. inventory valuation
c. cost of goods sold valuation
d. impact of economic conditions on company operations

36. Which of the following statements is true?

a. Management accounting is a subset of cost accounting.
b. Cost accounting is a subset of both management and financial accounting.
c. Management accounting is a subset of both cost and financial accounting.
d. Financial accounting is a subset of cost accounting.

37. A long-term plan that fulfills the goals and objectives of an organization is known as a(n)
a. management style. c. mission statement.
b. strategy. d. operational mission.

38. The world has essentially become smaller because of

a. improved technology. c. better communications systems.
b. trade agreements. d. all of the above.

39. The value chain

a. reflects the production of goods within an organizational context.
b. is concerned with upstream suppliers, but not downstream customers.
c. results when all non-value-added activities are eliminated from a production process.
d. is the foundation of strategic resource management.

40. In a global economy,

a. the trade of goods and services is focused on trade between or among countries on the same
continent.
b. the international movement of labor is prohibited except for multilingual persons.
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c. the international flows of capital and information are common.
d. all of the above happen in a global economy.

41. A managerial accountant who communicates information objectively is exercising which of the following
standards?
a. objectivity c. integrity
b. competence d. confidentiality

42. A managerial accountant who prepares clear reports and recommendations after analyzing relevant facts
is exercising which of the following standards?
a. objectivity c. integrity
b. competence d. confidentiality

43. Cost accounting standards

a. are legal standards set by the Institute of Management Accountants for use in all manufacturing and
professional businesses.
b. are set by the Cost Accounting Standards Board and are legally binding on all manufacturers, but not
service organizations.
c. do not exist except for those legal pronouncements for companies bidding or pricing cost-related
contracts with the government.
d. are developed by the Cost Accounting Standards Board, issued by the Institute of Management
Accountants, and are legally binding on CMAs.

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